BUS104 Strategic Planning For Palmview Pineapples: Case Study For Assessment Task 2 Answer

BUS104 Case Study for Assessment Task 2

Palmview Pineapples has been operating on the Sunshine Coast for almost seventy years. Jack Cooper’s father Errol (Errol passed away in 1975) had moved to Palmview from Brisbane at the end of 1946 looking to establish his own farming operation. Errol had been given land options as part of the Federal Government’s Soldier Settlement Program following his military service. He selected 80 hectares and settled on acreage at Palmview. Errol quickly made progress with successful pineapple crops within five years and before long he was expanding into custard apple and passion fruit crops. He was determined to continuously improve productivity on his farm.

Errol had a belief in the 1950s that the Sunshine Coast should be self-sufficient in their food production. He believed in providing enough food for the growing population so that interstate produce was not required and there would be no need for imported produce from overseas. According to Errol, high quality produce was critical for success in achieving this vision. Errol worked hard developing local networks to distribute his produce on the Sunshine Coast and within a few years had grown to the point where he harnessed local connections to transport excess stock to the Rocklea markets in Brisbane. Jack knew his Father was ahead of his time. Jack admired the way Errol developed relationships with other growers in order to share transport costs and overheads, achieving economies of scale to reach bigger markets. At the same time Errol was fine tuning his techniques for planting, irrigation, pruning, yield management and pest control. Errol knew that these factors had to be continually improved in order to leave behind a sustainable business for his children.

From the veranda Jack gazed out across the orchard ignoring the local paper that was laid out in front of him. He was in a reflective mood - he would be turning 65 next year and was wondering when the time would be right for his children to take over the family operation. There had been many changes since 1975. Errol had laid the foundation and Jack had followed the template. Errol and a couple of his mates had established the Sunshine Coast Food Growers Association in 1955. He had served as President, Vice President or in some Board capacity until the end. Jack had continued the legacy, serving the same roles and networking locally, and was a well-known face at the Rocklea Markets – just like his Dad. Jack’s children were at the right age; they had their business degrees from USC and Jacqui had been working at Palmview Pineapples for three years now. Jacqui had completed a Double Major in Management and Accounting and was following in Jack’s footsteps to become the next General Manager – of that there was no doubt.

Jack had mentored his daughter through the past three years and he was proud of the way she approached challenges in the business. When there had been management decisions to be made – such as plant and land allocation choices in specific months, and when harvesting had got out of alignment due to changes in weather patterns – Jacqui would review the factors, look at alternatives, evaluate the best course and make a decision based on reason and logic. This was the way a business should be run according to Jack. This was an extension of the skills and techniques Errol had taught Jack when he learnt the business.

The Custard Apple and Passion Fruit had been a steady alternative crop over the years, but pineapples were the focus of the business as they are more plentiful. Jack was very pleased that his investment in a range of innovative techniques over the past ten years had smoothed out the high and low yield cycles that are common in the pineapple industry. Pineapple harvests had been doing reasonably well meeting annual production targets in two of the past four years, but Jack sensed changes in the environment. The annual target is currently set at 2000 tonnes and while the annual targets had been trending downward since 1985 (3000 tonnes) there had been many factors in play. The supermarket business in Queensland had become increasingly consolidated, new boutique operators had set up on the Sunshine Coast targeting the local ‘organic’ market with high quality product and receiving a premium price; and then there were the cheap overseas imports. This competitive environment was exacerbated by growers from further north in the state working with food processers to supply expanding juice operators. These forces were driving oversupply of product and lower prices at the farm gate for the local producers like Palmview Pineapples.

Palmview Pineapples had produced the following yield in the last four years:

2014/15: 1850 tonnes

2013/14: 1700 tonnes

2012/13: 2000 tonnes

2011/12: 2300 tonnes

Aside from these competitive forces, the challenge as Jack saw things was the increasing cost of maintaining irrigation equipment and managing mealy bugs and root rot in the plants around the orchard. The summer months seemed to be getting hotter and longer, and this was affecting the size and quality of the pineapples. Jack was concerned at the trend of yields and had seen some of his farming neighbours scaling back production due to rotation and harvesting problems. Jack could see they were not focused on key success factors of nutrition management for the soil, correct irrigation techniques and ensuring the pineapple pickers were well trained in contemporary harvesting techniques. The business was fortunate in some ways – there were alternative choices that could be made due to access to capital resources and skilled personnel.

Jacqui’s brother Elias had majored in Marketing and Creative Industries, moving to Sydney and working for Unilever Australasia for the past three years. Elias had worked on the Flora brand and witnessed first-hand the benefits of focused capability in food processing, packaging and marketing. Elias had returned to Palmview Pineapples now and this was making for an interesting dynamic in the family business. Elias had taken on the role of Business Development Manager, and had communicated to his sister and his Dad, his thoughts in regard to the future. Elias felt that in order for the business to grow the question of ‘what business are we in?’ required deeper consideration. Elias had put forward some ideas in regard to developing or expanding into specialty niche markets such as Macadamias or Kiwi Fruit in order to further increase capacity and yield across the growing seasons. Elias agreed with his Father - the competition from cheap imports was driving down prices and impacting on profits of Pineapples. Elias argued that they were relying too much on this revenue stream and failing to act now would lead to catastrophic outcomes in the future.

Elias had other ideas also – he felt there was opportunity for the business to integrate its own processing facilities and develop new diversification initiatives. Elias had spent a couple of summers working at a small craft beer entity in Brisbane – Chester and Kent. Cousins on his Mother’s side, Chris and Jack Young had established Chester & Kent from scratch and Elias had seen first-hand how popular new flavours of beer are in the hospitality market. Elias had done some research and had established that bringing the flavor of pineapples into a craft beer offering is a significant opportunity. In addition to this other regional producers were working with manufacturers to supply pineapple in different formats - in particular supplying the popular juicing franchises on the coast. If Palmview Pineapples implemented a new integrated beverage strategy successfully they could recruit other local growers as part of a local co-operative and a new hospitality destination could be established at Palmview.

And there was one other idea Elias had. Jack did not want to think about this but wondered to himself if it had merit. Elias suggested it may be time to look at other revenue streams to keep the family business viable for decades to come. Elias had handed his Father an insert from the local paper – it was an information evening hosted by The Sunshine Coast City Council and sponsored by a local Real Estate Agent. They were looking for land holders to attend a seminar to hear industry information in regard to local land development opportunities. The basis for this was the establishment of a new high school and town centre close to Palmview Pineapples. Elias thought that a portion of the farm could be developed for townhouse living. It was evident that the local council would be looking to adjust local zoning laws to make this feasible. Elias said that he could be a potential project manager of the residential development and this would future proof the business in the face of threats to the crop production. Jack glanced down at the local paper spotting the phone number to register for the seminar. His hand rested on his phone and he contemplated whether he should call the real estate agent or you as a management consultant to assist in guiding Palmview Pineapples forward to a successful future.

Introduction: Provide a summary diagnosis of the case and stipulate the best way forward for Palmview Pineapples (200 words)

Question One: Using the PESTEL framework provide a table identifying external environmental forces and narrative discussion and analysis on the two most important factors.

Question Two: In terms of group decision making provide an overview of theory and how it applies to this case as related to your suggestion for the best way forward for Palmview Pineapples.

Question Three: Adapt and apply figure 4.2 (p.92) from Robbins et al. (2019) based on the best way forward you have identified as a management consultant for Palmview Pineapples. Utilise Robbins et al. (2019) pp. 92 – 94 to inform your response.

Conclusion: Compare and contrast tactical and strategic planning and explain how they work together in order to drive a successful outcome for Palmview Pineapples (200 words)