ABM 437

Strategic Plan
Zespri Corp
Jeremy Pagel, Zak Kretchman, Robbie Schuler, Andrew Braun, Larry Jacques
4/30/2012

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 Executive Summary
The current strategy that comprises Zespri is one that attempts to maximize its strengths and
minimize its weakness. However there are some changes that we believe should be applied to
the current strategy of Zespri to allow to take advantage of more opportunities for profits. The
following is an analysis our strategic plan for Zespri:
Strategic Vision/Mission:
 Zespri should grow in the specialty fruit markets, in particular star fruit
 Overall Zespri should strive to be a category leader in kiwi fruit; focus on consumer
demands while developing new fruit cultivars to maintain customer satisfaction and
meet customer demands
Core Strategy
 Niche strategy as a highly valued producer of kiwi fruit
 Adopt this strategy as Zespri acquires the star fruit line
 Leverage marketing strengths like strong marketing abilities, and familiarity within the
specialty fruit markets
Industry Role:
 First mover accompanied by a continued proactive leader approach in the kiwi fruit
market
 Star into the star fruit market as a challenger to gain market share
 Maintain the brand equity and consumer perception of value enlisted in Zespri
Strategic Scope
 Zespri should move from a single fruit product and diversify itself into other fruit
markets
 Continuation of sources and selling of Zespri fruit products worldwide
 Adoption of new fruit products into the Zespri name
Strategic Initiative
 Growth through continued market penetration and new kiwi cultivar development
 Superior advertising to market to consumers at a premium price in order to generate
the necessary revenue to add the new star fruit line
 Tight logistical control of fruit and market monitoring
 Maintain two way communication between Zespri fruit growers and Zespri corporate
Vertical Coordination
 Start an equity based alliance with a star fruit grower
 Maintain the vertical integration that it currently has with its kiwi fruit growers

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Action Plan for Star fruit
 Identify regions that have a high probability of success for marketing a new fruit product
 Identify Star fruit cultivars that exceed expectations and which Zespri will greatly profit
from
 Explore trade barriers and other obstacles that would prevent Zespri from successfully
introducing a new line of specialty fruit

Table of Contents
Executive Summary....................................................................................................................................... 2
Strategic Analysis .......................................................................................................................................... 4
Strategic Vision ............................................................................................................................................. 4
Products and values .................................................................................................................................. 4
Mission Statement .................................................................................................................................... 5
Objectives ................................................................................................................................................. 5
Core Strategy ............................................................................................................................................ 6
Strategic Initiative ..................................................................................................................................... 7
Strategic Scope.......................................................................................................................................... 9
Industry Role ........................................................................................................................................... 10
Vertical Coordination .......................................................................................................................... 11
Resource Needs ...................................................................................................................................... 12
Action Plan Kiwi ...................................................................................................................................... 13
Action Plan Star fruit ............................................................................................................................... 13
Appendix A .................................................................................................................................................. 15
Performance Assessment ....................................................................................................................... 15
External Analysis ..................................................................................................................................... 16
Internal Analysis ...................................................................................................................................... 18
Financial .............................................................................................................................................. 18
Human Resources ............................................................................................................................... 18
Operations .......................................................................................................................................... 18
Management ....................................................................................................................................... 19
Organizational Resources ................................................................................................................... 19
Information Resources ........................................................................................................................ 19

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 Future Scenarios ..................................................................................................................................... 19

Strategic Analysis
Based on our analysis of Zespri we determined that their strengths in marketing, operations and more,

far outweighed their weaknesses of declining financial ratios. In our next step we determined that their

opportunities in both the kiwifruit and other global fruit industries far outweighs their threats to their

current position, therefore we placed Zespri in the “offensive quadrant of the change grid. For more on

the internal and external analysis including porters 5 forces analysis and some key scenarios see

Appendix A.

Through the completion of our analysis we determined three key issues that Zespri must focus on when

moving forward these are as follows: (1) How is Zespri going to gain a better understanding of foreign

markets in order to better capitalize on current market growth? (2) How is Zespri going to increase its

supply of premium kiwifruit in order to meet this growing demand? (3) How is Zespri going to lower its

risk by diversification into other fruit markets? Throughout our strategic plan we will focus on solving

these key issues.

Strategic Vision

Products and values

Zespri’s strategic vision is based on many factors including the products Zespri sells and Zespri’s value

system. Zespri’s current products include the marketing and sourcing of green and golden kiwifruit. For

future growth we would like Zespri to broaden its product line by first continuing development of

kiwifruit cultivars but also (then second or then next) going into new specialty fruits such as the

Carambola also known as the Star Fruit.

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Zespri’s values should always remain constant and they include: Good customer relations, grower

development, global supply, environmental sustainability, corporate responsibility and food safety.

These values are essential to keep Zespri’s reputation of being a quality fruit producer.

Mission Statement
Having a current, up-to-date mission statement is essential for any business to succeed in today’s tough

economy, because of this we have decided to update Zespri’s current mission statement which read: To

be the ‘acknowledged world leader in kiwifruit’ and the retail category leader in kiwifruit: To be the

retail category leader in kiwifruit, Zespri provides unrivalled excellence in: (1) Brand-based consumer

focus. (2) Customer relationships and innovation. (3) Cost-effective sourcing of superior fruit globally.

We decided to make several changes to this mission to make it more in line with the new product focus

while still maintaining Zespri’s core values. The new mission statement should read as follows: To be

the world leader in kiwifruit in both quality and price, and work to introduce new fruits to the world

market: (1) Continue development of kiwifruit in order to create a better more sustainable fruit to the

world on a year round basis. (2) Focus on consumer demands to provide the most desired product to the

end user. (3) Develop new fruits to introduce to the world market. This new mission statement will

serve as a guidepost for the new direction of Zespri.

Objectives
Along with the new mission statement we have developed several objectives to help guide the company

to achieve its long term goals these objectives are as follows: Improve customer service by, growing

consumer knowledge of kiwifruit in order to broaden possible customer basis and use current

communication channels to introduce new fruits to the world market. Improve our ability to do better

than the competition by, using current marketing channels to inform consumers as to the high quality of

Zespri’s kiwifruit and work with growers around the world to encourage cooperation in order to create a

more sustainable global year round supply. Improve productivity by, continuing research in new

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cultivars in order to create more efficient and productive cultivars and develop distribution channels

that are more reliable and product less carbon pollution. Improve profitability by diversifying

production into areas with lower cost production. Improve employee performance and satisfaction by,

developing incentive based plans in order to encourage global cooperation between managers and

provide access to a global network of employee resources that allows employees to create and share

new ideas and developments. Finally create innovation by encouraging all employees to supply input on

ways to better the company and provide rewards to employees that develop new business models.

Core Strategy
Zespri uses a niche strategy as a world class provider of kiwifruit. The kiwifruit is exported around the

world and demand is driven by their high quality, year-round availability, sweet taste, health benefits

and product variety. This strategy will also apply to star fruit as its attributes are similar to kiwifruit.

Zespri obtains its objectives through the niche strategy to out provide & outperform the competition,

increase profitability, expand their markets, innovate all well providing quality jobs with opportunities to

diversify. As they are in the category of healthy specialty fruit the act of adding star fruit helps resolve

some of the issues that they had been facing such as understanding foreign markets, increasing supply

of products, and decreasing risk through diversification. They can do these things by leveraging some of

their strengths such as their strong marketing abilities, and familiarity in specialty fruit. They are also

leveraging their abilities to share information, provide very efficient refrigeration, and use their world-

wide in store relationships. Potentially, as star fruit comes online they may find some other

opportunities such as bundling the rejected fruits from both categories to create new juices or other

non-fresh market products. They will also be looking to as quickly as possible create and patent new

star fruit cultivars that could set them apart from the industry. As they expand their line to include star

fruit they will find that many benefits will occur from the expansion of their markets and from the

reduction in risk associated with a sole crop. This will, however, incur some costs as they are unfamiliar

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with the star fruit industry and current players and in addition there are major investment costs in

equipment and training. Despite the risks and costs Zespri will find that the addition of star fruit will

align with their objectives, expand their current resources, and mimic their current structure and lines of

communication.

Strategic Initiative
Current Strategic Initiative- Zespri is currently utilizing the growth strategic initiative by trying to gain

increased market penetration through new kiwi cultivar development.

Recommended Strategic Initiative- We recommend growth through continuing market penetration and

new kiwi cultivar development, as well as, finding new customers in star fruit markets. Zespri’s strategic

vision/mission will be attained through growth by “introducing new fruits to the market”.

Resolution of Strategic Issues- By expanding Zespri’s business to another market, the strategic issue of

supply risk of relying on kiwifruit will be reduced. Risk in its business will be spread to another fruit

market, and Zespri will not be solely reliant on kiwi sales to achieve profitability. Also, through

continuing to grow and develop new kiwi cultivars, Zespri will be able to help meet growing demand for

a variety of kiwi fruit and gain more penetration in other foreign markets.

Marketing- This strategy must utilize superior advertising to get consumers to pay a premium and to

eventually price setter in the star fruit market. This has been a successful strategy in kiwi fruit and

should be utilized in this new endeavor. Also, Zespri should continue to build and maintain relationships

by dealing directly with large retailers and distributors to keep transaction costs down.

Human resources- The past experience of the sales staff with the fruit marketing industry will be

essential in promoting new products. This sales force will be able to adapt and gain new knowledge of

the star fruit industry along with the new expert employees that are hired.

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Operations- Tight logistical control of fruit and market monitoring will continue to be used in star fruit

markets to promote success. A 12 month supply and offshore sales support are vital to be carried over

to star fruit marketing based on the success of these tactics in kiwi fruit marketing. This must also be

continued and improved in kiwi marketing endeavors to gain market penetration in foreign markets.

Organization- Zespri must maintain a solid public image in star fruits branded by Zespri. Brand equity is

what makes consumers pay a premium for the Zespri brand, and the same image must been realized by

consumers of Zespri branded star fruit.

Information- There will continue to be two way communications between growers of kiwi fruit and star

fruit with Zespri about production and other issues like new technology or improved growing

techniques.

External Opportunities- Because there is increased globalization it is feasible and necessary for Zespri to

keep a 12 month supply of kiwi fruit and expand this to the star fruit in order to keep shelf space at

retail outlets full for consumers all year. Additionally, there is a growing consumer demand for health

benefits of nutrient dense fruit. This will be captured through the increased cultivar development of kiwi

and star fruits that Zespri will market.

Benefits of Growth/Diversify- Zespri will be able to reduce the reliance on kiwi as sole source of income.

(Spread risk) It will gain the possibility of greatly increasing overall profitability in the long run. Although

Zespri already has a strong brand, it can increase brand loyalty and awareness by supplying consumers

with a new variety of quality kiwi and star fruit products.

Costs/Risks of Growth/Diversify- There will be a large capital investment to spread scope of the business

and grow into other markets. It will be costly to hire experts in other markets. (Diversify marketing

force) Zespri faces the risk of losing focus and extending past its core competencies in unfamiliar

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markets. When attempting to start and police licensing of other fruit, Zespri could have issues handling

the volume of work that needs to be accomplished. In this instance, Zespri could start to lose quality

control and the brand image.

Strategic Scope
Zespri’s current scope is single business oriented around the kiwifruit, they are globally orientated in

both sales and product procurement and primarily focus on internal development of talent through

education and training. We would suggest that they change a few parts of this plan. First, they should

change to a slightly less broad scope of single business dominated, this way they will be able to expand

into new fruits to reduce risk and increase potential profits. They should continue to globally source and

sell their products but also look to possible mergers in order to gain knowledge of the new fruit. This

decision helps to attain the mission of introducing new fruits by broadening the scope, also by keeping a

broad global scope Zespri will be able to utilize and grow current market and supply channels. Our

choice to continue global sales and sourcing also helps to resolve the strategic issues of gaining better

understanding of global markets and continued year round supply. Expanding the business scope to

include new fruits also helps to alleviate the issue of reducing risk through diversification.

The new strategic scope exploits many of the company’s current strengths including: Exploiting Zespri’s

fruit marketing strength by adding a new fruit and exploiting Zespri’s brand strength by putting the new

fruit under their brand. The new strategy will also take advantage of many market opportunities

including: New fruit market growth, and increased globalization.

Some benefits of this direction include; reducing risk while still staying focused on limited and similar

product lines. The global scope allows for continually increasing market potential and year round

sourcing. Finally the possible merger can increase market knowledge and introduce new efficiencies.

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These benefits also come with new costs and new risks. Some new costs include the cost to introduce

new fruits to the market. Zespri must build up a new knowledge base on the fruit they intend to

introduce and develop new marketing strategies as well as the ability to source the product. Also they

will continue to add new costs with their continued globalization. Some of the new risks included with

the new plan include the limitations of a new fruit, whether or not it will grab public attention the same

way that kiwifruit did. If the fruit has issues it could damage Zespri’s brand name.

Industry Role
The current industry role Zespri assumes is the proactive leader role. They have the largest market

share, and have been the first mover in many products such as the gold kiwi they came out with. The

industry role we strive for will be to continue in the proactive leader role. We want to continue to be the

market leader and continue to gain market share. We also want to take use of the first mover advantage

as we have done in the past with Zespri Gold. We can take that same strategy as we roll out our new

products such as the two red kiwi fruit varieties currently being worked on. We will assume a lot of the

risk in the market doing this, but with the high risk comes a high reward with the first mover advantage,

getting a premium price on new products before others enter into the market.

As we expand into other fruit markets such as the star fruit market we will take on a different industry

role compared to our kiwi fruit production. We want to enter the star fruit market as a challenger. We

will not start off as the as the market leader, but could move to that in the future. As a challenger we do

not need to have as much as the initial capital investment as we would if we were the leader. We can

test the market and see if we can be successful before we try to gain more market share. Another

advantage to being the challenger is we can learn from what the others are doing in the market and

copy what they are doing well, and improving on their weaknesses. Our experience in marketing kiwi

fruit will also help us to be a better challenger, because we can transfer what we had learned with kiwi

fruit to the star fruit. The marketing aspect is one of Zespri’s core competencies and they can use that in

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the star fruit. Also the brand of Zespri is well known and recognized as a good quality product so

bringing that into the star fruit market will help us penetrate the market and challenge the leaders of

the industry.

Vertical Coordination
Currently Zespri has a market relationship with its kiwi growers and we believe that they should

continue this method in order to keep a constant supply of kiwi’s moving towards Zespri’s final kiwi

consumers. Additionally, Zespri is currently vertically integrated with the farmers that supply them with

kiwi fruit, which allows them to control and monitor production costs, and maintain high quality

standards. While this strategy is currently working, Zespri is facing a lot of risk from rising costs of kiwi

production, an increasing risk of lower cost substitute products, and an overall change in consumer

preferences to lower cost fruits. With this in mind, Zespri should strive to create and equity-based

alliance with another specialty fruit product such as a star fruit company that would give them the

option to acquire other fruit products or brands and sell them under the Zespri name on a small scale in

a niche market. Additionally, by creating an equity based alliance with a star fruit company Zespri would

have the opportunity to develop their own cultivars of star fruit, and sell licensing fees to their allies and

collect capital for having the Zespri name on the final product. In doing this Zespri would not only

decrease its risk of having only one product to market, but they would also have less investment risk

into researching and developing a new value added fruit for their customers. Also because the Zespri

name is a well-known branded product, this new fruit product would appeal to existing customers who

had previously purchased Zespri kiwi fruit. This form of vertical integration would also make it possible

for Zespri to enter existing star fruit markets because they would be relying on the star fruit company

that they are aligned with to supply the customers. This would be a possible source of risk for Zespri to

vertically coordinate in this manner because if the star fruit product does not perform well Zespri may

lose some brand equity due to decreasing customer perception of feature/benefits. If the alliance fails

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Zespri will also be liable for the capital it invested in the venture and because of the margins that Zespri

operates with they cannot afford to lose a lot of capital at this point in time. Overall an equity alliance

would be a great avenue for Zespri to pursue in order to diversify themselves (eliminating risk), and

enter into the star fruit market (taking advantage of the opportunity for additional customers and

revenue) while maintaining their mission/vision goals.

Resource Needs
Core Competencies- Zespri must utilize similar product control and marketing competencies it has used

to excel in the kiwi market while achieving expertise in the star fruit market. To attack the need of

better understanding foreign markets, Zespri must expand and improve upon market research of global

preferences of taste for kiwi and star fruits.

Technology- Zespri should acquire the skills to develop new cultivars for star fruit and continue new

cultivar development of kiwi fruit. New development of technology has kept Zespri profitable in the kiwi

fruit industry and this should be spread to the star fruit market to promote success in marketing the

product to consumers. Zespri should also improve the communication technology used to monitor and

track an additional market segment of fruit to handle increased volume of the need for product control.

(Improved data tracking systems)

Human Resources- Experts in the star fruit marketing field must be acquired to determine how to license

star fruit growers and gain market penetration in this field. Technical database employees should be

hired to develop a new functional tracking and communication system and train Zespri employees in its

use for the star fruit market. Also star fruit cultivar development experts will need to be employed to

gain a challenger position in the star fruit market.

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Financial Resources- License fees from licensed star fruit growers must be collected to help finance the

marketing of the new product and new cultivar development of this segment of business. A start up loan

from a financial institution may be needed to cover initial costs of procuring the new licensing,

information, control, cultivar development, and marketing systems if retained earnings prove to be

insufficient.

Action Plan Kiwi

One of our goals for Zespri is to continue to expand our market share by expanding into new

geographic markets. The plan we have for this is to expand and get more growers in Chile, China, and

the United States. All these countries are among the top in kiwi production, but Zespri does not have a

strong presents in these countries. We believe we can bring the growers from these areas to work with

us. This will benefit both the grower and us; the grower will have a consistent way of selling their

product through us, and receive premium prices using the Zespri name. This will also benefit us because

we can increase our year round supply allowing us to gain market share. We will also focus on marketing

in other areas such as the United States, Europe, and China, because these are relatively untapped

markets, and we see a lot of potential for future sales. We can get these countries to start consuming

our products though in-store taste tests, and marketing the health benefits which will be very attractive

to the Europe and U.S. markets.

Action Plan Star fruit

In order to bring star fruit online as a challenger product we will need to obtain a few goals first. The

first thing Zespri will need to identify is regions globally that have a high probability of success. Within

those regions we will be looking for cultivars with higher than average qualities, great yields, and

hardiness against disease and weather extremes. Next we will be looking to Identify and train growers

that are willing to provide fruit to our specifications. Zespri will need to coordinate transportation and

refrigeration services. They should also explore what trade barriers they may encounter such as import

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policies, intellectual property rights protection, investment barriers, anti-competitive practices, etc.

They will also need to communicate the changes with grocers and start a new marketing campaign to

introduce our line expansion to existing and new consumers. All of this should be done at a slow and

safe pace paying extra attention to our methods as future expansion of healthy specialty fruits should

follow a similar model. Zespri should immediately work internally towards creation of new Star fruit

cultivars as they could potentially capture more value from the fruit in the same manner they do with

the gold variety kiwifruits.

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 Appendix A
Performance Assessment
This Performance Assessment of Customer Satisfaction, Competitiveness, Productivity,
Profitability, and Customer Satisfaction will provide insight to Zespri’s actions in a world economy. In
customer satisfaction Zespri ranks high due to four main factors. The first factor, “Branding” links the
product to quality, country of origin, and variety which helps create customer pull. The second factor,
“Customer Segmentation” is the process of varying products for a variety of demands which helps capture
a higher percentage of the consumer surplus. The third factor, “Sweeter Cultivars” sets the leading
standard, which result in deterred competition. The fourth factor, “Year Round Accessibility” maintains
retail space, enhances demand, and strengthens distributor relationships. Zespri is a competitive player in
the world kiwi market. The company is highly integrated and cuts information asymmetry and costs by
freely sharing information throughout the company. As a cooperative they also experience benefits of
purchasing power. However, there are three main concerns regarding competiveness on the world market
which include labor costs, fluctuating currencies, and potential emerging competitors. The current
competitor on the world market is Chili as their exports and yields have recently been gaining on New
Zealand, while China and Italy hardly export and their yields are either unknown or far beneath New
Zealand’s. (See fig.1). Zespri still leads the world in both kiwi yield and in profitability (See fig. 2) due
to their ability to capitalize on their resources, and on their capabilities as a company. The resources are
highlighted by their strong investment in human capital, strong financial backing as a cooperative, and
their reputation as a quality driven company. The capabilities that set them apart from the competition
include; investing heavily in research and development, managing their supply chain in a way that assures
year-round availability and premium quality, and the ability to market the kiwis globally. This
assessment indicates that Zespri has a strong ability to satisfy their consumers by offering a superior, safer
kiwi fruit worldwide in a competitive manner, while remaining a leader in both productivity and
profitability.

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External Analysis
5 Forces Analysis
1. Threat of New entrants: Weak
a. High barriers to entry
i. Zespri has a large experience advantage
1. New Zealand has been exporting kiwifruit since 1952
2. 1970 Kiwifruit Export Promotion Committee formed to promote exports,
would lay groundwork for Zespri brand
ii. Zespri owns patents on new kiwifruit cultivars
1. Limits other companies access to newer technologies
iii. Brand Equity – Zespri has been known for high quality kiwifruit
b. Kiwi fruit is still a competitively small market therefore there are not many newcomers
interested
2. Threat of Substitutes: Strong
a. Kiwifruit is very new, many people know little about it
b. Other fruits such as oranges and apples are already a part of many people’s diets
c. Other fruits are very competitive and often priced lower
3. Bargaining power of Suppliers: Weak
a. Zespri is owned by kiwi growers
i. No bargaining for supply of kiwi
b. Bargaining for inputs for kiwi growers: weak to Medium
i. Develop their own cultivars for new varieties
ii. Fertilizer and sprays are commodities
iii. Competition for land is increasing causing more bargaining power for suppliers
of land
c. Zespri can threaten to integrate backwards
4. Bargaining power of buyers: Low
a. Zespri sells to many countries around the world
b. Zespri offers differentiated products based on quality and innovation

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 c. Since Zespri is formed by a large number of producers the number of producers that are
able to sell to buyers is relatively small
5. Rivalry: Medium
a. Zespri doesn’t compete for lowest price
b. Constantly working to improve quality
c. Lots of advertising/sales promotion
i. Not to fight competition but to raise awareness of kiwifruit

Opportunities Analysis
1. Change in buyer demand:
a. Kiwifruit is still a niche product
b. Large markets in Europe, China and Japan
i. New markets in China account for 1/3rd of Zespri’s growth
c. Not catching on yet in US and other western countries
d. Introduction of Golden kiwi
i. More of a new niche than the original green
e. New customers brought in by health benefits
2. Information technology
a. Introduction and use of wide spread information technologies helps in marketing and
demand figures
b. Ability to track shipments helps to ensure traceability and quality management
c. New scanner data information from retailers keeps real time demand information and
reorder needs
3. Shipping and storage technology
a. Faster shipping methods
i. Helps product have more life once it makes it to the specified market
b. More efficient cooling houses for storing fruit
4. Increasing globalization
a. Use of worldwide production to ensure year round fresh supply
b. Ability to ship all around the world enables access to all markets

Threats Analysis
1. Food safety
a. Constant scrutiny from consumers and press
i. One illness related to kiwi fruit could affect entire world demand
b. Increasing concerns over kinds of fertilizers and pesticides used on fruit could limit their
use
2. Government regulations and taxes

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 a. Local governments sales tax and regulations on exports can always increase
b. Over 60 foreign markets
i. Makes foreign policy difficult to maintain
ii. 60 different import policies, tariffs and other regulations
iii. Subject to change from year to year
iv. Different consumer behavior in each market
3. South American kiwifruit
a. Sell for up to half the price of Zespri at wholesale
b. Potential for market domination
c. Currently lower quality however may improve to compete on standards as well as price
4. Other Kiwifruit growers
a. Italy and China produce large amounts of kiwifruit
b. Majority is consumed within the country
c. Does not have very much effect on Zespri’s world market.

Internal Analysis
Strengths
Zespri is a marketing firm; its sole focus is on marketing 3 varieties of kiwifruit. The main source of
Zespri’s success is through its ability to provoke consumers to pay a “premium” for their branded product. The
company uses billboards, print, and digital signs on cabs and busses to gain brand recognition with consumers.
Zespri also utilizes television advertising, and it is one of very few fruit marketers to use this mode of
communication because of the large expense. The industry average spending on advertising is .7% of total
revenue, but Zespri spends 6% of its total revenue on Promotion. Zespri is a price setter, not a price taker in the
marketplace. It sells its whole sale product 50 to 100 percent above the prices of its Chilean competitors.
Zespri also offer grower tours so growers can see where their product ends up. Also, retailers, distributers, and
wholesalers are brought to Zespri licensed farms to see the operation first hand. They return to their companies
as ambassadors to the Zespri brand. Zespri works directly with retailers and distributors and builds local
offices to support sales in large markets to ensure customer satisfaction in these vital areas. In store tastings
boosted Zespri sales as much as 93% for up to three weeks following the program.

Financial
Zespri is a very profitable company. In 2010 the net profit after tax was almost 26 million. Also,
partly due to the large scope and nature of the company, Zespri has a large portion of its current assets in a
liquid form. ROI is over 50 percent on average from 2006-2010.

Human Resources
The employees at Zespri are very skilled at communicating with growers and customers. There are
117 staff members offshore to accommodate needs of customers.

Operations
It has tight logistical control; kiwi is only accepted after it is inspected, loaded and on a ship to its
destination. Each kiwi can be traced back to a packing plant and farm it came from. There is also tight control
on licensing to produce the brand. The Gold variety is very profitable for growers. The facilities built near
large sales areas are essential to the effective operation of Zespri. During the growing season, Zespri closely

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monitors each market’s performance and re-optimizes product allocation when necessary. Zespri provides a 12
month supply of kiwis is to keep market share in this market.

Management
The CEO has a unique set of skills to have to communicate effectively with growers all the time.
Many CEO’s do not have an effective skill set to accomplish this.

Organizational Resources
Zespri’s public image is strong, and this is reflected in the consumer willingness to pay a premium for
the product. Local Sales people are available to better carry out their tasks for the customer in large markets.

Information Resources
Zespri practices two way communications through call centers and the internet with its growers to get
them the best info to enhance production practices as much as possible. It funds market research studies to
understand consumer kiwi buying habits.

Weaknesses
We took a look at the financial statements produced by Zespri Group, and dissected the balance sheet and
income statement, and found some weaknesses in Zespri Group. The current ration over the past two years
averaged 1.29, which may look good initially, the three years previous to it had an average current ratio of
1.64. The current ratio shows the current assets over the current liabilities, which if the trend continues and the
ratio drops bellow one Zespri Group could have trouble paying off short term debt. The debt to asset ratio in
2010 is .79, and has been consistently rising from the .52 in 2006. As this ratio increases, so does the concern
of creditors, and could cause problems for the company if they are unable to get loans as the ratio increases.
The total asset turnover ratio has been decreasing considerably over the past 5 years. In 2006 they had a TAT
ratio of 6.60, and in 2010 the ratio dropped to 4.16. The ratio shows that in 2006 for every dollar they invested,
they would make $6.60, and now in 2010 they are only getting $4.16 from each invested dollar. This is a
weakness because they are not earning as much per their investment in the company as they were in years past.
Although some of the ratios may not look like weaknesses initially, looking at the history of Zespri Group and
seeing how they have gotten worse over time we found these are problems that should be fixed.

Future Scenarios
Decline:
Any supply shortage issue or negative change of consumer preferences of kiwis Zespri may incur will
be detrimental to its survival. This loss of revenue will spiral into fewer and lower compensated employees
which will decrease employee quality in the long run. A lower Quality marketing force may be unable to
overcome the challenges of giving Zespri a new direction in unfamiliar waters.

Same but Better:

Zespri could continue to develop new cultivars of kiwis to maintain consumer interest, and it could
continue to utilize its marketing and sales strategy. To have a gradual incline, Zespri should add more than its
current 117 offshore sales people since it operates in 60 countries.

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Fundamental Change:
Zespri could realize the opportunity to spread to other fruit markets to reduce the risk of supply or
consumer demand issues of kiwis. Zespri already has impeccable marketing strength with kiwis, so it should
have less of a learning curve in spreading to other markets. This will make Zespri grow by leaps and bounds in
the long run.

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