Blue Diamond Almond Growers Term Paper

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Blue Diamond Almond Growers

Positioned on a market with high revenues and even higher potential, the Blue Diamond Growers of California has made a business out of harvesting almonds in California. The stage itself is excellent: California is one of the few areas in the world where almonds are actually cultivated. This brings about significant advantages, as the only real competitor at country level is Spain, but where almonds are considered a secondary crop and where imports from California itself provide for much of the country's demand (Western Europe remains the main import market for American almonds in 2004). If we look at the figures alone, the U.S. has provided for 88% of overall global supply of almonds in 2004, a significant figure, considering much of it comes from Californian harvests.

The encouraging fact in the almond market is that the overall global demand seems to have been on the rise as well. This is not only related to the positive qualities of almonds themselves (nutritional and taste, to which we will refer when discussing the 4Ps), but to the alternative use for almonds that have been increasing rapidly in the last years. We need to refer, for example, to the alternative products that use almonds, such as candies or snack foods, product where demand has been constantly increasing over the last years.

The main strategy at this point for the company would be to increase its market share. Indeed, this implies several different issues. First of all, an increase in market share would men a better positioning on the market, with all the positive consequences that may derive here from, including the ability to partially determine and create market trends.

Second of all, an increase market share would also impact the company's volume of sales, with a direct influence on the company's overall revenues and profits. This could finance, in the future, further mechanization and the acquisition of new technology within the company. Part of the future increased profits could be used to settle any labor disputes that may appear as the result of unions being formed.

The issue is how to bring this strategy into simple tactical forms so as to produce the best results in the shortest period of time. The company can speculate several important characteristics of the market and of the product it is commercializing. As we will see below when referring to the product, price, place and promotion issues, almonds sell well and demand for the product is on the rise. This means that, if the company remains stable and no particular problems occur, it should enjoy a smooth rise in the years to come.

There are two potential problems that may damage the company's stability. One is internal, the other external. The internal problem refers to the creation of unions and the overall move towards unionization that has been experienced on the market and in the company itself. A union is a potential source of problems for the company, because it may lead to other things that could damage production (strikes, collective bargaining etc.).

As far as the company is concerned, the union is not necessarily a problem that should be dealt with in terms of elimination, but it is a problem that should be dealt with in terms of isolation. In my opinion, the relationship with the company's employees should be so good that the employees would never actually turn to the union's help for their problems. For low costs and investments, the company can ensure that the workers remain happy and efficient.

The second problem refers to competitors. While being well-positioned on the market, the company still has to fear competitors in California. In my opinion, it may have to fear European ones as well, despite the enormous absolute value difference between U.S. And European productions. The danger from Europe comes in the form of the economic facilities that come about with the European Union. This may, perhaps, in the future increase the importance of the European market in terms of production.

The tactics the company adopts should keep in mind these two aspects and will include a moderate pricing, so as not to stir other competitors, and a strong promotional campaign, underlining the benefits of almonds (see below). Additionally, the company should prospect other related markets as well, especially those of substitute products (nuts or pistachios, for example). This will counterbalance any possible fluctuations in almond demand in the future.

Product, Price, Place, Promotion

In terms of product, two important issue need to be pointed out, as the main characteristics of almonds and the main pointers to be followed in the company's strategy. The first is the nutritional and positive health effects that almonds have. As it has been pointed out during the last years, almonds seem to have a natural effect on improving breathing or on reducing the risk of heart attacks by improving heart conditions.

The second issues that needs to be pointed out is the fact that almonds tend to bring a note of class and distinction to any dish they are being served with. If in the beginning we were only dealing with an individual almond consumption, in the sense that they were not associated with other products, more and more nowadays we have dishes, especially salads, where almonds "make a welcome appearance at every part of a meal." This is something tat can be well speculated as well.

The price strategy that the company should be advised to follow in the future is somewhat difficult to determine, mainly because of all the positive aspects that the market and company presents so far. Indeed, as we have previously seen, the demand in the market has been on an ascending trend for a period of time now and there are no signs that this will stop in the near future.

Additionally, the Blue Diamond Growers benefit from the fact that they are operating in the area with the largest production of almonds in the world, which means lower production costs. Finally, because most of the work is mechanized, the company has successfully managed to create economies of scale, which, again, lead to lower costs of production.

All this arguments would probably lead in favor of an aggressive price strategy for the future, which would mean a gradual (or less gradual) increase in the prices that the company practices. On the other hand, we need to take into consideration the existing competition on the almond market and the threat coming from other companies. A price war on the market could only cause negative repercussions on the business.

In this sense, I would suggest a constant price strategy, which may even mean that the company could develop a price competitiveness over the possible threats on the market and could thus increase its volume of sales.

In terms of promotion, as previously pointed out, this is closely linked to the product and its characteristics. The two most important characteristics that need to be emphasized are the positive health aspects and the nutritional benefits, as well as the simple fact that it can be properly used in different dishes (the taste characteristic). In this sense, a promotional campaign that would target the first characteristic (health issues) should be directed towards the main health journals and nutritional magazines in the U.S. This would mean weekly or monthly columns on the properties of almonds, on the new discoveries that show how good almonds are for health (the role of almonds in preventing or curing heart diseases or the role that almonds can play in a healthy diet) or any latest nutritional news.

The second characteristic would be included in a promotional campaign that would target food magazines, but also TV shows on culinary diets, cooking books, etc. The company itself can edit a cooking book with dishes that contain almonds and sell it around the U.S.

As pointed out previously, it is important that the promotional campaigns that the company intends for the future should include these two different aspects that make almonds a special product.

In terms of place, as shown before, the company benefits from operating in California, the heart of global almond production, which has significant overall benefits. As for the market positioning, in my opinion, the Blue Diamond Growers should opt for a moderate position, without practicing excessive pricing that would affect current stability with the other competitors.

As we have seen from this analysis, the Blue Diamond Growers seems to be well-positioned on the market, with hopes of increasing its market share in the future. The strategic actions to be taken in the future has been defined as growing the market share.

In this sense, specific measures to be taken will include, first of all, consolidating its position on the almond market. There are several tactical moves to achieve this. Promotion plays an important part of it and needs to include relevant aspects for almonds: excellent products in nutritional diets, increases the chances of escaping a heart attack,… [END OF PREVIEW]

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