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Assignment 1
New Zealand Institute of Education
NDB7 601 Marketing Planning and Control

Author Harshul Patel

Supervisor: Lokesh Kumar
Due date 26 August 2016

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Table of Contents
Executive Summary....................................................................................................3
Introduction.................................................................................................................4
Internal Environment Analysis..................................................................................5
Resources........................................................................................................... 5
Capabilities........................................................................................................ 10

External Environment Analysis...............................................................................15

Customer Analysis............................................................................................. 15
Competitive Analysis......................................................................................... 15
Market Analysis................................................................................................. 16
Environmental Analysis...................................................................................... 16

Business Philosophy...............................................................................................17
Conclusion................................................................................................................18

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Executive Summary
This paper provides an analysis and evaluation of companies current organisations
internal and external environment to understand its capabilities and business
environment. The data included has been taken from the dependable sources which
reflects the resources and capabilities of the organisation.
Foodstuffs North Island (FSNI) is the largest company in terms of revenue and
second in terms of employment. FSNI has over 600 member stores which operate all
over the country.
FSNIs position holds strong position in New Zealand grocery and liquor market.
They share over more than half of the market shares about 55.5%. Also FSNI has
there own distribution centres, transport and logistics department which makes the
company on the top in terms of the market share.

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Introduction
Foodstuffs was formed by J Heaton Barker 6 July 1922 in Auckland who called
together members of the Auckland Master Grocers' Association so that they can
discuss the plans for the formation of the new cooperative buying group
(Foodstuffs NZ Ltd, 2016 ).
Foodstuffs is the largest and biggest grocery supplier chain and largest organisation
of New Zealand. The organisation is proudly 100% kiwi owned and employees over
30000 people nationwide.
It is divided into two cooperatives:

Foodstuffs North Island Limited,

Foodstuffs South Island Limited.

The above cooperatives are owned by the retail owners and both of them operates
differently with different board and management. The cooperatives have no common
members or shareholders (Foodstuffs NZ Ltd, 2016).
Foodstuffs North and South Island Limited jointly owns the Foodstuffs Limited, a
small non trading entity. This plays a vital role in representing both cooperatives
interest on issues of grocery importance and also expanding the role of the
organisation.

Figure 1.1
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Internal Environment Analysis

Resources

1. Profitability:
In current competitive marketplace, an organisation must achieve a satisfactory
level of profitability. The operating profit for the Foodstuffs North Island Limited
(FSNI) for the 53 week period of $219.3m was up 3.1% ($6.7m) on a reported
basis and 1.2% ($2.6m) on a comparable basis. Slightly lower total gross margins
reflect the greater proportion of deliveries made direct to store rather than
through FSNI Distribution Centres. This effective profitability strategy for FSNI
can be determined by assisting its fellow merger groups and also they coined
areas of their financial strategy which are needed to be improved (Foodstuffs NZ
Ltd, 2016 ).

Figure 1.2
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2. Sales:
Sales plays a very important role in determining the FSNIs profitability. If we talk
about the revenue for the 53-week period of $6,439m increased 3.2% ($199.7m)
on a reported basis and 1.3% ($79.7m) on the comparable 53 week trading
period for the year 2016.
Foodstuffs is committed to constantly updating their offer to ensure customers get
the best possible supermarket experience which affects the sales of the
cooperatives (Foodstuffs NZ Ltd, 2010).

Figure1.3

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3. Product Quality Brand Association:
The attributes which come into customers mind when the brand is talked about
are the brand association. Foodstuffs Food for Thought Education Trust has
continued to support the communities through their free nutrition education
programme Food for Thought.
The Food for Thought programme is delivered by four Nutritionists (three North
Island and one South Island based) in conjunction with Heart Foundation Health
Promotion Co-ordinators (HPCs). This collaboration with the Heart Foundation
allows the programme to reach a greater number of schools and students
(Foodstuffs NZ Ltd, 2016).

Figure 1.4

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4. Existing Overall Brand:

The Foodstuffs as a brand consists of three different regionally based
cooperatives which trade in grocery and liquor sector of the New Zealand
economy. The turnover of the brand exceeds $7 billion which makes Foodstuffs
organisation the largest grocery distributor and the second largest trading group
in New Zealand by turnover (Foodstuffs NZ Ltd, 2016).

FSNI is100% New Zealand owned and locally operated, and through their 350
stores they serve over 1.3 million customers every week. New Zealanders trust
FSNI as part of their everyday lives and thats why they have a responsibility to
serve our customers when, where and how they choose to shop (Foodstuffs NZ
Ltd, 2016).

Figure 1.5

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5. Employee Capabilities
FSNI has an inclusive approach for developing the capability of their employees,
with their training and development programmes which involves about 1,400
students across from the cooperative. Developing talented people and teams has
always made the difference in the business.
More than 250 butchery and bakery apprentices enrolled in a trade skills
qualification. Entries to the Baker of the Year competition doubled to 90, and the
top 20 bakers competed over two days for the Supreme Award which shows that
the employees are talented and have good capabilities (Foodstuffs NZ Ltd,
2016).

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Figure 1.6

Capabilities
1. Effectiveness in motivating and coordinating business units:
Strong Co-operative principles and behaviours have served Food Stuffs North
Island customers and generations of grocers well for more than 90 years. The
organisation has a Paramount Principle to work for the mutual benefit of all its
Members. To perpetuate and promote the Co-operative, the Board and
Leadership Team has been reaffirmed shoulder-to-shoulder on the need for
powerful alignment across Foodstuffs North Island.
The brand is coordinated by the executive team which includes Chief Executive
officer, Chief Information officer, Chief Financial officer and many more
(Foodstuffs NZ Ltd, 2016).

Figure 1.7

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2. Financial Capabilities
FSNI remains in a strong financial position with total assets of $2,586 million.
Significant capital expenditure was made to develop and refurbish the store
network (including a property capex of $61.6m), and to fund the transformational
roll out of new IT systems. Group revenue for the 53-week period of $6,439m
increased 3.2% ($199.7m) on a reported basis. Cash and cash equivalents at
end of period of 2015 was $44,071,000 (Foodstuffs NZ Ltd, 2016 ).

Figure 1.8

3. Market trends:
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FSNI is effective in understanding the new market trends and it is very quick in
the response to the market trends. FSNI has planned a Commercial Operating
Model which will deliver sustainable competitive advantage. The new model will
be good for the Co-operative and its longer term future. It will bring greater
efficiency and transparency, and guide buying behaviour in a way that will reap
benefits for the current market trends.
FSNI always strive to be where their customers want to be, and a growing
number of them want them to be online. The organisation has made a rapid
progress towards the launch of their online offer, and also the exciting prospect of
a New World Clubcard to provide meaningful and relevant rewards, and
invaluable customers insights to FSNI (Foodstuffs NZ Ltd, 2016).

Figure 1.9
4. Effectiveness in promoting and executing sales
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FSNI has made strides to develop quick solutions for their stores and offer the
best value to their customers, whilst operating profitable and efficient business.
Below are some promotions which are highlighted that includes:
Released a new ordering app Cheeky Charlie to Four Square
stores to simplify and speed up their ordering process.
Adapted components from the Cheeky Charlie app to support
PAKnSAVEs SHOPnGO in the lower North Island and begin
the development of our online offering.
Completed the roll out of the touchscreen Point of Sale to all
upper North Island stores. This enabled the introduction of
loyalty rewards for regular customers.
Deployment is underway of an Internet-based IT infrastructure
as part of Store Technical Readiness in the lower North Island (Foodstuffs NZ
Ltd, 2016).

Figure 1.10
5. Effectiveness in promoting and executing research capabilities
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FSNI has its own department who does research and development for the
organisation. They organisation is highly concerned with promoting and executing
their research capabilities. FSNI has worked closely with Foodstuffs South Island
(FSSI) to develop the Foodstuffs National Product Information Management
(PIM) system as part of the One Data Project. The National PIM will act as a
common repository for all product information submitted and updated by
suppliers via the National Product Catalogue and Product Flow or Foodstuffs
Data Express. This will provide the stores across the New Zealand with the
timely access and more transparency of new products offering and changes
made by the suppliers (Foodstuffs NZ Ltd, 2016).

Figure 1.11

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External Environment Analysis

Customer Analysis

Segments:
FSNIs main

targeted

segments

are

based

on

Geography, Demography,

Psychographic, and Behavioural. The segmentation helps the organisation to

understand how their products or services appeal to the customer across the above
four segments (The Manage Mentor Org, 2016).
FSNI identifies main consumer needs and apparently take measures to introduce the
product in their stores with sufficient quantities. Also the organisation takes account
of the price as it so that particular segment is not affected and also the price should
be competitive.

Figure 1.12

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Motivation:
FSNIs new strategy being customer insight driven is very motivating and to
continue to strengthen the understanding of their customers, the Co-operative is
launching the New World Clubcard in the North Island later in 2016; a loyalty
programme to reward customers for shopping with New World. Also the Co-operative
has introduced the reward program with Fly buys card which rewards the customer
with the collected points (Foodstuffs NZ Ltd, 2016).

Figure 1.13

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Unmet needs:
With 74% of New Zealanders are already buying something online at least once a
month, which is a large opportunity for FSNI. However, FSNI has still not yet launch
any website for the online shopping in spite of the current customer market which is
of $400 million. New Zealanders love their cars, so supermarkets are needed to be
located on the most popular driving routes. This means a click-and-collect service
can meet a lot of our customers needs, although a delivery service is also important
(Foodstuffs North Island Limited, 2015).

Figure 1.14

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Competitive Analysis

Performance:
FSNIs performance is improving each year in terms of sales and revenue. The only
competitor is Progressive Enterprise holds 40% of the total New Zealands market
share and has the profit of about $4.9 million which is quite low then the FSNI which
was about 6.5 million for the past year and is continuing (Foodstuffs NZ Ltd, 2016 ).
Image:
FSNI is 100% New Zealand owned and locally operated. While the Progressive
Enterprise is Australian owned company. The Progressive Enterprise has relatively
less number of stores in rural areas while the Foodstuffs cooperatives have stores in
rural communities all over New Zealand (Foodstuffs NZ Ltd, 2016).
Objectives:
FSNIs objective is Making sure New Zealanders get more out of life. Through
FSNIs brands and each of their unique customer propositions, they deliver a wide
range of experiences and value. While the competitors objective is to provide range,
value, convenience and quality to people of New Zealand (Progressive Enterprise,
2016).
Strategies:
FSNI has a clear multi-brand strategy which is getting more out of life. The Cooperative is growing a culture based on values and high performance that takes
customer-inspired actions which is very different from its competitors whose strategy
is to gain most part of market share in New Zealand (Mullins & Christy, Strategy,
Corporate Resposibility And Ethics, 2016).
Culture:
FSNI believes in A Culture of Well-being and Safety which is very different from its
competitor The Progressive Enterprise. The Co-operative has the ability to develop,
nurture and grow the team talent and make sure they have the best grocer for every
store which is their culture (Mullins & Christy, Organisational Culture, 2016).
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Strengths:
The main strength for the FSNI is its brand name and most important the financial
backing. This financial strength of the Foodstuffs cooperative stands behind every
Foodstuffs member since it is the cooperative group that guarantees the members
borrowings and pays suppliers (Foodstuffs NZ Ltd, 2016 ).
Weakness:
The only weakness FSNI has is that there is no particular organisational structure.
As the Co-operative is very huge there should be a proper organisational structure
so that things are governed and work properly (Foodstuffs NZ Ltd, 2016).

Market Analysis
Overall market size:
The current grocery and liquor market size is about the $18000 million which is quite
big and the FSNI has about 55.5% of the above market share (Foodstuffs NZ Ltd,
2010).
Projected Growth and Profitability:
FSNI is planning to open 12 more stores in the upcoming year which will increase
the total revenue by 1.5% more which in return will increase the sales and profit
margin by 2% (Foodstuffs North Island Limited, 2015).
Cost Structure:
FSNI issues the same pricing structure for all its member store as it is one of the
compliances which all stores have to follow under licencing agreement (Foodstuffs
NZ Ltd, 2010).
Distribution System:

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FSNI has six distribution centres; four in upper north region and two in lower north
region. Also FSNI has its own transport and freight system which delivers the
products directly from the warehouse to the stores (Foodstuffs NZ Ltd, 2016).

Trends:
Market trends are likely to be in favour as people are now shopping more in the
supermarkets therefore the market share and profitability will increase in upcoming
years.

Key Success Factors:

The main key success factors for FSNI is that they have there own distribution
centres, there own transport and freight system, and product identification system
which contributes to the success of the organisation.

Environmental Analysis
Micro

Customer: Loyalty is very high as FSNI is most trusted brand. Different

customer segments are taken into consideration by the organisation to control
the market share.
The basis of the grocery and liquor business is directly influenced by the
customer; therefore, FSNI gives importance and takes into the consideration
the feedbacks from the customers.

Competitor: Competition influences the organisation in terms of the market

share, price, quality and availability of products.
The only competition for the FSNI is Progressive Enterprise which pushes

FSNI for the best operational excellence.

Suppliers: Suppliers are very vital for any retail industry as they directly
provides the products and can directly influence the customer base.
FSNI has suppliers partnership which provides the product to its

own

warehouse distribution centres. This suppliers are under the legal agreement
and need to follow compliances issued by the co-operative.

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Media: Media is widely spread is only one which influences the customer
base. FSNI extensively uses social media for marketing their products which
increase there sales by 10% also there promotional emails give customers

discount on products.
Internal Relationship: Factors like the of support the top management enjoys
from its shareholders, employees and the executive team affects the smooth
functioning of the business.
FSNI has support and cooperation among all the members which has brought
the organisation to the topmost level in terms of employment, market share,
and sales.

Macro

Political: This factor is directly depended on the public affairs and their impact
on the business.
FSNI has directly depends on the

public

affairs as the country is more

volatile in terms of politics.

Socio-culture: This factors include the community and society alongside its
priorities and preferences like their buying and consumption patterns which
affects the business.
FSNI is 100% New Zealand owned and

is spread all over the country

covering rural areas and communities which has support for the brand by the

communities.
Technological: The marketability of a product is highly influenced by the latest
technology thus in turn affects the business.
FSNI spends millions in developing and bringing in the latest technology to all
its stores so that their business is benefited.

Economical: Economic environment includes both the economic conditions

and economic policies which are consider as economical factors. The factors
includes growth rate, inflation and trade practices which directly influences
the business.
FSNI has better growth rate, better trade practices as it is economically well

rooted into New Zealand.

Environmental: This factors influences the business directly as the working
conditions and the environment for that particular business.

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FSNI has the best environment to work with which develops their people and
their potentials.

Business Philosophy
Leading with purpose
FSNI has a clear purpose for their business- Making sure New Zealanders get more
out of life. With a clear multi brand strategy, they deliver a wide range of experiences
and value.
Connection, Clarity and Action
FSNI believes that high performance of organisation starts with connection, clarity
and action; which means listening and making

sure that the members and

customers are heard and the insights which they capture are acted upon.
Our People, Our Difference
FSNI develops, nurtures and grow their team talent to make sure that they have the
best grocer in each of their stores. Collaboration is at the heart of the organisational
high performing culture and FSNI believes it

enables agility in the

whole

co-

operative.
Being Competitive
Being able to compete operational excellence is very important for FSNI. They
manage their costs at their centres, and focus on supply chains so that the products
are always available on their shelves for customers.
Decision to Benefit Customers
FSNI has a strategy Being Customer Insight Driven which is very critical and is
continued to strengthen their understanding about the customers. The co-operative
has launched New Wold Clubcard as a part of the customer loyalty programme so
that their customer rewarded.
Valuable Partnering with Suppliers

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FSNI need their supply partner to deliver best value for their customers with
consistent service delivery excellence, constant innovation of the New Zealanders
and a joint commitment to safety (Foodstuffs NZ Ltd, 2016 ).

FSNI believe that the strength of a successful co-operative is to pass better cooperative to the future generations with commitments. FSNI has Paramount
Principle which benefits the mutual members. They also introduced Commercial
Operating Model which delivers sustainable competitive advantage to the firm for
the upcoming years.
They have launched New World Club card and fly buys point to reward the
customers as part of loyalty programme. As corporate social responsibility FSNI has
launched a program Food for thought which delivers food to 218 schools. This
programme is deliver by four nutritionists in conjunction with Heart Foundation
Health Promotions Coordinators (HPCs) which allows the organisation to reach the
greater number of schools.
To be competitive the Co-operative has decided to deliver operational excellence to
all the business aspects. Which is about improving the business continuously as
usual and to increase agility and efficiency everyday by putting right capabilities in
right place.

Conclusion
Foodstuffs is the second largest employer in New Zealand, with over 30,000
employees working across the regional co-operatives and retail stores throughout
the country. Foodstuff is all about the retail business with over 680 owner-operated
full service supermarkets, retail food outlets, liquor stores and more. They also
support business through transport, logistics and by providing distribution centres.
Foodstuffs share about 55.5% of total market share of New Zealand which is
almost over half of the grocery and liquor sales. The combined group revenue of the
firm increased by 3.2% for the year 2016 with a substantial rise in sales.
Foodstuffs is 100% New Zealand owned which is spread all over the New Zealand
helping communities and rural areas.

References
Foodstuffs North Island Limited. (2015). 2015 Concise Annual Report. Auckland:
Foodstuffs North Island Limited.
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Foodstuffs NZ Ltd. (2010, January). The Statutory Framework For Financial
Reporting. Retrieved from Ministry of Business, Innovation & Employment:
http://www.mbie.govt.nz/info-services/business/business-law/financialreporting-framework-review/submissions-on-the-financial-reportingframework-discussion-document/documents-images/075-Foodstuffs-NZLtd.PDF
Foodstuffs NZ Ltd. (2016 ). 2016 Foodstuffs North Island Annual Report 2016.
Auckland: Foodstuffs NZ Ltd.
Foodstuffs NZ Ltd. (2016). Annual Reports. Retrieved from Foodstuffs NZ Ltd Web
site: https://www.foodstuffs.co.nz/about-foodstuffs/annual-reports/
Foodstuffs NZ Ltd. (2016). Company Information. Retrieved from Foodstuffs NZ Ltd
Web site: https://www.foodstuffs.co.nz/about-foodstuffs/company-information/
Foodstuffs NZ Ltd. (2016). Foodstuffs South Island Annual Report 2016.
Christchurch: Foodstuffs NZ Ltd.
Foodstuffs NZ Ltd. (2016). Media. Retrieved from Foodstuffs NZ Ltd Web site:
https://www.foodstuffs.co.nz/media-centre/news-media/
Foodstuffs NZ Ltd. (2016). Our Operations. Retrieved from Foodstuffs NZ Ltd Web
site: https://www.foodstuffs.co.nz/about-foodstuffs/our-operations/
Foodstuffs NZ Ltd. (2016). Our People. Retrieved from Foodstuffs NZ Ltd Web site:
https://www.foodstuffs.co.nz/about-foodstuffs/our-people/
Foodstuffs NZ Ltd. (2016). Prerequisites for Supply. Retrieved from Foodstuffs NZ
Ltd Web site: http://suppliers.foodstuffs.co.nz/national-guidelines/traderequirements.aspx
Foodstuffs NZ Ltd. (2016). Who We Are. Retrieved from Foodstuffs NZ Web site:
https://www.foodstuffs.co.nz/about-foodstuffs/who-we-are/
Mullins, L., & Christy, G. (2016). Organisational Culture. In Management &
Organisational Behaviour (p. 537). Harlow: Pearson Education Limited.
Mullins, L., & Christy, G. (2016). Strategy, Corporate Resposibility And Ethics. In
Management & Organisational Behaviour (pp. 504-513). Harlow: Pearson
Education Limited.
Progressive Enterprise. (2016). Our Company. Retrieved from Progressive
Enterprise Ltd Web site: http://www.progressive.co.nz/our-company/ourhistory
The Manage Mentor Org. (2016). Enlightenmentor Areas. Retrieved from The
Manage Mentor Web site:
http://www.themanagementor.com/EnlightenmentorAreas/sm/imgs/diamond1.
gif

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