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Criteria and Options + Recommendations Decision Criteria

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Submitted By Dotun
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ZESPRI
CRITERIA AND OPTIONS + RECOMMENDATIONS
DECISION CRITERIA
The decision criterion for Zespri is how it can expand its presence on a global scale, and what other applications for the Kiwifruit there can be. With Zespri’s presence as marketing firm that markets premium kiwifruits that have been subject to several quality standards to ensure consumer’s satisfaction; its product line is limited to only four products. Its expansion can be derived by targeting and engaging in emerging markets like Iran, building its presence through was such as engaging in community outreach, as well as strategic partnerships in different markets in different countries.
The decision is based on the fact that there are many uses and benefits of the kiwifruit, and it has the potential and rewards that appeal to certain markets that it does not have a presence in.
One potential for expansion in Canada and the United States and markets that have not yet been touched in Europe, and in emerging markets like India and Indonesia is through their juice and smoothie markets, and enhanced flavor water with Kiwifruit flavor. The juice and Smoothie Bars industry has been steadily growing as a relatively new niche industry yielding revenues of $2.4 billion in the American market(http://planetsmoothiefranchise.com/learn-planet-smoothie/big-smoothie-industry/); it still shows capacity to grow. A way to enter that industry is to use smoothie bars, or incline themselves with established organizations like Tim Hortons and Starbucks. These are area restaurants and café bake shops chain situated across Canada and the United States. They offer in summer smoothies made up of a mix of different fruits that meet the need of health conscious North Americans and provide refreshments. Zespri can use that to their advantage to push their products to North America. With either Tim Hortons or Starbucks including Zespri’s kiwi fruit in their smoothies, they are able to add a product mix to their brand, and it has mutual benefits to both companies as well because Zespri would be able to increase the markets it operates in, as well as add value to the restaurants by offering variety to consumers in the competitive market they operate.
Another potential option to consider is expanding into the Beauty and Personal Care Industry. The vast global industry is said to be worth $421.2 billion, and includes several segments (http://www.smitherspira.com/news/2014/january/personal-care-packaging-industry-forecast-to-2018). The segments that would have the most appeal to target by Zespri are the skin and sun care, hair care, and bath and shower. Through expansion into the Beauty and Personal Care Industry, the benefits of the kiwifruit can be advantageous, as it rejuvenates the skin with nutrients like vitamin C, regenerates cells in the body through the presence of vitamin E, and prevents skin diseases through the presence of omega-3 fatty acids in the kiwifruit.
To expand into the Beauty and Personal Care Industry, Zespri would have a strategic alliance with the market through a partnership with a firm that operates in this industry. An example of a company is Unilever. Through the alliance with Unilever, Zespri hastens its integration into a new market, and with the combined effort with Unilever, it can create new products based on a mix of expertise from the companies, as well as Research and Development, and gain access to various countries’ markets.
The best potential option for Zespri is to expand in the Beauty and Personal Care Industry. The expansion would allow Zespri to have a greater reach across markets, and develop new expertise and is a strategy that is simple. However, there may be complications that can limit the access to markets Zespri is trying to achieve.

Financial evaluation Year | Current Ratio | Quick Ratio | Debt-to-equity | 2010 | 1.3 | 1.143 | 3.756 | 2009 | 1.29 | 1.149 | 3.547 | 2008 | 1.59 | 1.541 | 1.526 | 2007 | 1.57 | 1.535 | 1.582 | 2006 | 1.81 | 1.784 | 1.098 |

Current Ratio= current assets/ current liabilities
Quick Ratio= current assets- inventory/current liabilities
Debt-to-equity= total liabilities/ total stakeholder’s equity | 2009/10 | 2008/09 | 2007/08 | 2006/07 | 2005/06 | Gross Margin | 70.322 | 68.729 | 69.170 | 71.045 | 70.924 | Operating Margin | 4.213 | 3.667 | 3.317 | 4.877 | 4.766 | Profit Margin | 2.076 | 1.859 | 1.841 | 2.135 | 2.832 |

Gross Margin= (Revenue- Cost of goods sold/ Revenue)*100%
Operating Margin= (Operating Income/Net sales)* 100%
Profit Margin= (Net profit/sales)*100%

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