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UNIVERSITY OF CUMBRIA, STRATEGIC MANAGEMENT, MAY 2020 FINAL ASSESSMENT

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UNIVERSITY OF CUMBRIA, STRATEGIC MANAGEMENT, MAY 2020 FINAL ASSESSMENT

Pioneer Food Group Ltd is a South African manufacturer and distributor of food products and beverages. The company was founded in 1996. Pioneer is involved in the production and distribution of rice, beans, pasta, wheat, maize, bakery products, breakfast cereals, dried fruit products, and dried vegetables. Some of the brands developed by the company include Maize Meal, White Star, Imbo, Para, Grande, and Blue Bird Special (Pioneer Foods 2020). Pioneer also produces desserts, nuts, snack bars, condiments, frozen fruits, baking aids, base flours, meals, and salads (Pioneer Foods, 2018). In 2017, it reported operating profit-earning amounting to R800 million (Pioneer Foods 2018). The fast-moving consumer goods (FMCG) company has strong manufacturing capabilities which provide quality products. Recently, the company was acquired by PEPSICO. Pioneer is the second largest FMCG Company in South Africa. The company has 44 manufacturing plants in South Africa. The company uses acquisitions to expand its market presence and to diversify its product portfolio (Pioneer Foods 2020). Pioneer has invested heavily in state-of-the-art technologies in manufacturing and distribution to improve supply chain efficiency. The company is also seeking to benefit from the parent company resources.

Company Vision

The vision of Pioneer is to be the “To be the leading African FMCG company.”

Company Mission

‘We believe in nourishing lives, with trusted, well-loved brands, empowering families to get more out of life.’

Divisions

The essential foods division manufactures wheat, maize, rice, beans, pasta, and dried vegetables. The division also manages the company’s bakery operations. The groceries division is charged with the production of nuts, sweets, processed salads, cake mixes, and fruit mixtures.

SWOT Analysis

StrengthsThreats
Focus on quality

Strong manufacturing capabilities
Brand portfolio

 

 

Intense competition

Government regulation

Covid-19 crisis

South Africa Business Environment

WeaknessesOpportunities
Operational Performance

Traditional business model

Ownership changes

Strategic initiatives

Expansion to African markets

Healthy foods

Growth in the Soft Drinks and Cereals Market

PepsiCo acquisition

Figure One: SWOT Analysis

Strengths

Focus on Quality

The company competes based on the quality of its diverse food products. The focus on quality products ensures consumer confidence. Its products and systems meet international quality standards (Pioneer Foods 2018). An assortment of quality products has enabled the company to build a solid reputation in the FMCG industry. The FMCG industry is intensely competitive. There are a large number of firms competing for the same market share. Firms apply aggressive strategies to outdo their rivals in the market. Besides, the low-switching costs intensify competition among rivals. The fragmented industry structure also intensifies competition.

Strong Manufacturing Capabilities

In the last two decades, the company has improved its manufacturing capacity in order to improve market base. Pioneer has cereal production plants in Clayville, Saldanha, Epping, Wadeville, Johannesburg, Malmesbury, and Atlantis (Pioneer Foods 2018). It also operates bakery production units in Olifantsfontein, Wellingborough, Peterborough, Mokopane, Wellingborough, Krugersdorp and Malmesbury Port Elizabeth, Cape Town, and Bloemfontein (Pioneer Foods 2018). Pioneer has invested heavily in state of the art technologies in order to compete in the FMCG industry. E-business in South Africa has been on the rise in the last few years.

Brand Portfolio

Pioneer has a strong brand portfolio which has enabled the company to become the second largest FMCG Company in South Africa. The company’s brands include Ceres, Champion, Blue Bird, Spekko Rice, Pasta Grande, and White Star. The strong brands have helped the company to enter new markets (Pioneer Foods 2018). It has also helped the company to increase its customer base. A strong brand portfolio is an important source of competitive advantage because it allows the company to charge premium prices for its products. It also enables the company to differentiate its product offerings. Branding plays an important role in addressing the low switching costs in the industry. It helps to manage customer perception in a way which promotes repeat sales.

Weaknesses

Operational Performance

The company’s growth is negatively impacted by weak operational performance. Pioneer has recorded an increase in operating cost expenses. The company’s operating expenses increased from 88.6% in 2016 to 94.4% in 2017(Pioneer Foods 2018). The general and administrative expenses have been on an upward trend. Pioneer is struggling to control its costs in an industry where cost control is important.

Traditional Model

Pioneer has a traditional business model which forces it to engage in head-to-head competition with rivals. The model involves producing quality products at a low cost and gaining market share. The model has constrained the growth and expansion of the company. The company is operating in a Red Ocean market which imposes cut-throat competition. -business in South Africa has been on the rise in the last few years. The industry recorded a 50% rise in online spending in 2019.  However, only 1% of sales are made online. There is great potential for e-commerce growth in the country. Most FMCG companies prefer the traditional brick and mortal supply chain model. Technology is also playing an important role in the production of innovative consumer products.

Ownership Changes

The acquisition by PepsiCo introduces new owners. Acquisitions generally fail because lack of effective integrations between the two entities. PepsiCo might seek to change the mission of the company to suit its own strategic needs. The acquisition might create cultural conflict between the two organizations. PepsiCo has a history of not integrating its acquisitions in a manner which allows for synergistic benefits. Ownership changes can also have an impact on the strategic direction of Pioneer Foods. The organization is in the middle of a transition which could impact its long-term performance.

Opportunities

Strategic Initiatives

The company uses acquisitions to strengthen its market position. Pioneer has a 50% Alpen Food Company South Africa (Pty) Ltd, which it used to start a new biscuit production line. The company also has a 49.9% share in Heinz Foods South Africa, which it used to launch a range of baked beans, soups, and ketchup products (Pioneer Foods 2018). Pioneer used its 50% share in Bowman ingredients to venture into new value-added chicken coatings (Pioneer Foods 2020). The company purchased a 50% market share in Bokom Botswana, which it used to market maize meal and whitened flour (Pioneer Foods 2020). Pioneer has been using its joint ventures to expand its product portfolio in the FMCG industry. The strategic initiatives have played a critical role in improving the competitive positioning of the company.

Expansion to African Markets

Pioneer is a quality producer of popular FMCG products such as maize meal, beans, wheat, and rice. There is a growing market for food products in central and East Africa. Droughts and food shortages have created new marketing opportunities in African markets. Expansion can help to double the company’s earnings for the next several years. The political environment in a country impacts the FGMC industry. In the last few years, South Africa has experienced turmoil and uncertainty. The exit of Jacob Xuma was accompanied by claims of corruption and mismanagement. Popular protests and violence targeting African immigrants have also been a major problem. In addition, inequality is going to restrict the growth of Pioneer in the next few years.

Growth in the Soft Drinks and Cereals Market

The soft drink market in South Africa was valued at US$ 7,560 million in 2016 and is expected to grow at a CAGR rate of 80.8% for the next several years (Ogunlela and Lekhanya 2016). The company owns several brands, including Ceres, Fruit Tree, and Liqui Fruit.

The bakery and cereals market has also been on an upward growth trend. The cereals market has a projected growth rate of 4.4% per year by 2022. The company’s strategic positioning through joint ventures can help to exploit the growing cereals market in South Africa. The company can take advantage of growth opportunities in Europe, the U.S. and Asia-pacific region.

PepsiCo Acquisition of Pioneer Foods

In 2019, Pioneer was acquired by PepsiCo one of the world’s leading food and beverage company. The $1.7 billion deal opened up new opportunities for the South African foods company (Yu 2019). Pioneer Foods product portfolio locally complements that of PepsiCo. The acquisition increased Pioneer’s scale and distribution capabilities. The acquisition also improved Pioneers go-to-market capabilities. PepsiCo’s interest in Pioneer foods was driven by the need to expand to the sub-Saharan region. The region is a fast growing market and an attractive opportunity for the FMCG Company. Besides, being part of PepsiCo will help the company to improve global capabilities and to invest more in agriculture. There are significant opportunities in vertical integration in the foods industry.

Healthy Lifestyle Trend

Pioneer Foods has the opportunity to grow organic foods and market them to an increasingly health-conscious market. A growing number of consumers prefer products which help them to stay healthy and to avoid the chronic diseases associated with obesity. The company has to pay attention to the power of buyers in the industry.  

Threats

Government Regulations

The FMCG market is strictly regulated by the government so as to ensure quality and safety. Complying with the regulations imposes significant operational costs (Ronquest-Ross, Vink, and Sigge 2015). Pioneer spends its resources and time complying with Meat Safety, Agricultural Products Standards Act, Poultry Act, Animal Disease Act, Food Hygiene Management, Animal Protection Act, Agricultural Remedies Act, and Stock Remedies Act. The regulations can impede business growth.

Intense Competition

Pioneer operates in an intensely competitive market. The FMCG industry is intensely competitive because a large number of firms compete for the same market share. Besides, the low switching costs intensify competition among rivals. The fragmented industry structure also intensifies competition.

Its main competitors include Premier Foods, Hillshire Brands Company, and Clover Industries Limited. All the companies have a market focus. In addition, firms apply aggressive strategies to outdo their rivals in the market. They also use quality to develop strong consumer brands (Ogunlela and Lekhanya2016). Intense competition is a threat because all the companies compete for the same market share (Ronquest-Ross, Vink, and Sigge 2015). A company can easily lose traction in market share to an aggressive competitor.

Covid-19 Crisis

The global pandemic has had the most significant impact on the global business environment. Measures to contain the pandemic have disrupted consumer goods manufacturers (Zhang, Hu, and Ji  2020). Most countries have stopped international travel. By and large, Covid-19 has halted the global supply chain.  Moreover, the pandemic has led to a shift in consumer behavior (Baker, Bloom, Davis, and Terry 2020). The ongoing crisis has put pressure on companies to adopt new ways of reaching customers. Social distancing rules and movement restrictions have restricted the intermediary based supply chain (Barua 2020). Companies are under significant pressure to adopt online supply chains. The company will have to develop strategies to help it through the suppressed business environment. It is important that Pioneer plans beyond Covid-19 in order to achieve the goal of becoming the leading FMCG Company.

South Africa Business Environment

South Africa is the southernmost country on the African continent. The developing nation has a population of 58 million (Roux 2016). In the last several years, South Africa has been experiencing economic growth challenges. In 2019, the GDP of South Africa grew by 0.7%. The year before, the GDP grew by 0.8%. South Africa suffers from a high level of inequality caused by the history of apartheid. The country has lost its leading position as Africa’s largest economy to Nigeria (Roux 2016). South Africa has a high unemployment rate of 25 % (Schraten 2020). Youth unemployment is estimated to be 50 % (Schraten 2020). Low levels of job creation characterize the country’s economy. The economy of South Africa is driven by agriculture, mining, and manufacturing. In 2018, the inflation rate was 4.62% (Schraten 2020). The cost of doing business in South Africa is high in comparison to other African countries. One of the main challenges facing South Africa is low education achievement among the youth (Roux 2016). A majority of youth qualify for semi-skilled jobs in the agriculture and service industry, areas of the economy which have focused on reducing their workforce in order to remain competitive. Additionally, low education achievement has caused a skills shortage which affects companies since human resource plays a critical role in competitiveness.

 

 

Figure Two: South African economy on the decline

Fast Moving Consumer Goods (FMCG) Industry in South Africa

Pioneer operates in the Fast Moving Consumer Goods (FMCG) Industry, a significant driver of the South African economy. South Africa has the most advanced food and beverage industry on the African continent (Meyer, Niemann, van Pletzen, and Smit, 2019). In 2019, the industry grew by 5 %(Schraten 2020). The industry has been the target of international investors, including PepsiCo, which purchased Pioneer (Meyer et al., 2019). FMCG companies use innovation to achieve growth and increase market share. Pioneer is the second largest FMCG in the country. The FMCG industry plays a vital role in the economy because it is the largest supplier to the retail sector. Tiger Brands is the leading FMCG Company in Africa. The company aims to be the top company in the industry by expanding its product portfolio and enhancing its scale.

The industry has been facing challenges due to constricted consumer spending caused by high levels of unemployment. FMCG companies in South Africa are engaged in fierce competition in a slow-growth market (Basson, Kilbourn, and Walters 2019). High inflation has also constricted the growth of the industry. Counterfeits are the most significant threat to the growth of the industry (Soon and Manning 2019). The top companies, including Pioneer and Tiger Brands, have reported increasing counterfeits in the last several years. In the post-Covid-19 era, the FMCG is expected to experience growth levels because of increased spending among consumers. Naturally, companies will be engaged in intense competition for market share in order to gain traction.

Pioneer Food Group Ltd: Financial Performance

According to the Pioneer Foods Maketline Report, the company was doing well in the last few years. In 2018, the company reported revenue growth. In 2019, the company posted 11.5% revenue growth.

Literature Review

A blue ocean strategy is used to pursue differentiation and low-cost to create new demand. The strategy involves creating new market space and demand (Eskandari, Miri, and Allahyary 2015). The blue ocean strategy also prioritizes capturing an uncontested market space and, ultimately, making the competition irrelevant (Mi 2015). A blue ocean strategy increases revenue. According to Mi (2015), Cirque used the blue ocean strategy to increase its revenue in an attractive environment. The company used the blue ocean strategy to reinvent itself and to increase its revenue by a factor of 22 (Denning 2017. Cirque also changed the nature of competition by attracting new customers who were previously watching ballet and theatre and were prepared to pay a premium price for a unique entertainment experience. Kim and Mauborgne (2017) maintained that Apple successfully used the blue ocean strategy to create an uncontested market space, which made the competition irrelevant (Au and Tucker 2018). Apple reconstructed the industry boundaries and created a new market space (Eltobgy and Elmoaty 2018). The company created new devices for a new group of customers. Apple entered a new market space by reconfiguring its resources and competencies. Abdolshah, Ahmadzadeh, and Abbaspour (2017) argued that it is possible to plan and achieve an advantage over one’s competitors without necessarily having to engage in fierce competition with rivals. A blue ocean strategy involves systematic, logical thinking, and planning (Saputri and Mulyaningsih 2016) (Hersh and Abusaleem 2016). It is possible for a company to created new demand rather than fight for existing demand (Shukor 2020). A blue ocean strategy creates a new space which is both profitable and rapid (Mebert and Lowe 2017) (Mauborgne and Kim 2017). Apple experienced rapid growth after adopting a blue ocean strategy in 2006.

Figure Three: Apple experienced rapid growth after adopting a blue ocean strategy

Most companies create a blue ocean strategy out of a red ocean strategy by shifting their focus to new customers. Blue Ocean remains the engine of growth for companies which get tired of the limited prospects in existing markets (Aithal and Kumar 2015). Technological advances have made it easier for companies to produce an unprecedented assortment of goods. Companies have been able to launch a blue ocean strategy and immediately enter global markets because of reduced trade barriers and the pervasive influence of the internet (Rahman and Choudhury 2019). Competition makes an industry unattractive. The blue ocean is a more lucrative aspect of strategy because it eliminates most of the challenges associated with the dominants competition landscape (Srinivasan 2018).

Blue Ocean Strategy for Pioneer Foods

Industry boundaries are not rigid and can be reconstructed through actions and strategies. Companies in the FMCG industry have been competing in a red ocean market where the rules of the game are well understood (Kim and Mauborgne 2017). Pioneer and Tiger are competing in an industry where the focus is on beating the competition. Intense competition is caused by the fact that the companies are competing for the same market share and have similar capabilities (Mi 2015). They usually focus on branding and cost reduction. A red ocean strategy focuses on existing demand. Pioneer needs to shift its focus to a blue ocean strategy in order to avoid the limitations that come with the fight for existing market share.

Six Paths Framework

The six-path framework is a strategic tool used to implement a blue ocean strategy. Professor W. Chan Kim and Prof. Renee Mauborgne created the strategy in order to exploit more possibilities (Kim and Mauborgne 2017). In order for Pioneer to succeed, it needs to stop focusing on its rivals. The company needs to reconstruct market boundaries.

 

 

 

Figure Three: Six Paths

Looking Across Industry Alternatives

Companies usually have a narrow focus on the environment.  The first step in the blue ocean strategy is to look for alternative industries to the FMCG industry.  The company should focus on turning product needs into service needs. The company needs to understand that products will only get it so far. Services are the future (Janssen and den Hertog 2016). Pioneer should focus on turning into a service-based business model in order to change the nature of competition in the FMCG industry. Pioneer is in an industry which provides products to customers to solve various problems. For instance, a detergent is not a good but a service which keeps people clean. The pathway to profit is not the product, but the service it provides to consumers (Kindström and Kowalkowski 2015). Pioneer’s products will have new value to customers if they become a service which provides more value. The company should focus on being a food subscription model.

The company should also seek to expand its value to customers. Customers usually buy products within a broader context to meet diverse needs (Evans and Gawer 2016). Pioneer should create new services alongside the products which it sells to consumers. By providing new services, the company will add value to the products it delivers to customers (Bocken, De Pauw, Bakker, and van der Grinten 2016). For instance, the company should provide services which provide education on how to eat healthy. The company should position itself between the FMCG and the lifestyle industries.

Look Across Strategic Groups

In the FMCG there are two hierarchical strategic groups. The premium group includes companies such as Tiger Foods, which focus on premium customers (Tiger Foods 2017). In short, they set their prices higher because they manufacture and market premium consumer goods. In the lower category are companies which sell their products to mass consumers. These are customers who are price-sensitive because they lack resources.

Look across Buyer Groups

Pioneer should shift its focus from buyers who are not the end-users of the product. In the digital age, the company should focus on selling its products directly to consumers rather than using the traditional model (Agnihotri 2016). Intermediate buyers who are traders simply add to the product’s cost because they must make a profit. Selling the products directly to the consumer through online platforms will help the company to unlock new value (Janjevic and Winkenbach 2020).

Look Across Complementary Product and Service Offerings

The company has to think about what happens before, during, and after the products are used by the customers. By focusing on coverage outside the boundary of FCMG products’ usage, the company can identify complementary services which can make the life of the customer easier. The company should strategize based on the fact that demand for one good creates demand for another (Kwak, Kim, and Park 2018). There are goods which tend to sell well together, such as Weet-bix and milk. Such products should be promoted together in a bundling pricing strategy. By bundling such products together, the company will provide additional value to its customers (Zhou 2017). The company should provide support services and enhancements around its product offerings.

Look Across the Functional-Emotional Orientation of the Industry

The company should focus on creating unique, differentiated, and superior products with good value for money. In the FMCG industry, the design of the product has a functional appeal. The company should adopt a human-centered design to ensure that its products have a functional appeal (Eggen, van den Hoven, and Terken 2016). The design should also be customer-centric in order to ensure that designs are stylish and make it easier for the consumer to use the product. Designing for functional appeal requires an understanding of what people desire.

Look Across Time

The FMCG industry is fundamentally influenced by trends. Pioneer should develop response strategies which are meant tom ensure its grip on the pulse of consumer demand. There trends which impact the industry across time. Pioneer should invest in customer relations strategies in order to build its capacity to identify trends which are decisive and impact the industry in the long-term. In this respect, the company should shift from market orientation to a customer-centric focus because it helps to enhance competitiveness ( Ascarza,  Fader,  and Hardie 2017). Responding to trends will open up unprecedented customer utility. One of the trend areas the company should consider is healthy lifestyles. Pioneer’s new product development should be engaged in developing healthier food products because of an anticipated demand increase.

Value Innovation

The blue ocean strategy maintains that the pursuit of differentiation and low cost is attainable. This is unlike Porter’s framework which argues that a company can only pursue differentiation or low cost.

Eliminate Some Factors That the Current Industry Relies Upon

Value innovation is a strategic approach focusing on new market spaces instead of jostling for the same customers with rivals. According to Kim and Renée Mauborgne, value innovation is a core aspect of the market-creating strategy (Leavy 2018). The company has to eliminate some of the factors that the FMCG industry relies upon. The company should eliminate buyers who are not end-users and focus on the end-user (Leavy 2018). The pervasive digitization path to FMCG will help create a new subscription model for the company’s products. There is an increased preference for online consumer goods purchases (Yeo, Goh, and Rezaei 2017). Pioneer should stop viewing the digital channel as the secondary or alternative distribution path. The digital channel should be viewed as the primary channel because the company is trying to create a new space away from its rivals.

The company should eliminate mass customization and focus on personalization. The FMCG Company is defined by the red ocean strategy. It is not strategic for the company to compete in the same way because it limits both growth and profits (Leavy 2018). Smart technologies provide insight into consumer preferences for personalization. The company should develop drinks and snacks that meet the specific tastes and preferences of the consumer. For instance, the company can provide an online platform where consumers can provide ingredients for Fruit juice mixtures, spreads, base flavors, and snack bars. In this line of thought, the company can provide food products that people with allergies can taste by removing problematic ingredients.  Given the growing number of people with allergies, the company will create a new market segment where Tiger Foods and other competitors do not exist. By eliminating mass-customization, the company can create a blue ocean market for its products.

Raise one or More Factors Well above the Industry Standard

Pioneer should increase the health and wellness factor above the industry standard. A competition strategy should be focused on futuristic shifts in consumer behavior (Strategy 2015). Continued growth in health offerings will shift the company away from head-to-head competition with Tiger Foods and other brands. There is no doubt that providing healthier foods and drinks will create further buyer value.

Create One or More New Factors That the Industry Has Never Offered

The industry has never offered customers the opportunity to participate in the production process. Historically, the FMCG industry has been all about providing consumers with the products that they need. An online model will allow consumers to play a role in the production process (Baudrillard 2016). In order for Pioneer to execute an effective blue ocean strategy, the company should take customer-centricity to the next level. As the industry continues to apply traditional production principles, Pioneer will compete on a different level by enabling people to control what they eat.

 

Figure Four: Value Creation

Three Tiers of Noncustomers

In order to properly execute the blue ocean strategy, a company should identify who the noncustomers are. The company should focus on soon to be customers. There are customers who are on the edge waiting to purchase the company’s products. It is important to understand that noncustomers always outnumber customers. “Soon to be” or first-tier customers sit on the edge of an industry waiting for the opportunity to become customers (Agnihotri 2016). The company should be focusing on customers who order their products online. These customers are sitting on the edge waiting to become customers once the company provides them with offers which meet their needs (Aithal 2016). Many customers are too busy to visit the traditional intermediaries. In the era of coronavirus, a growing number of customers prefer to shop online in order to avoid the risk of infection. The company should focus on distributing its products directly to consumers.

Second Tier Customers

Some customers have observed the industry’s offerings as an option to fulfill their needs. Other customers find the products to be unacceptable, perhaps because they are health conscious. The company should integrate technologies which enable customers to avoid allergic reactions. The industry has often ignored customers with allergies and health conditions. Nevertheless, there is a growing consumer base with allergies and illnesses that needs to be served. There are many consumers who have chronic diseases and allergies that do not allow them to consume ordinary food products (Zurzolo et al. 2017). The company has strong marketing capabilities and should develop and market personalized foods which suit the needs of customers with allergies. Customers who suffer from obesity and diabetes can benefit from a personalized food service. Such customers will be willing to pay a premium price for consumer products, which promote their health and safety.

Third Tier Customers

The third tier of customers is characterized as unexplored. There are many customers who may not have the time to cook but do not prefer fast-food. People who work are always on the look-out for a service which provides affordable healthy meals because they do not have time to visit an eatery. Pioneer can provide its food chef-prepared, healthy gourmet meals as a subscription service. Customers can get fresh foods, including groceries delivered to their door (See-Kwong, Soo-Ryue, Shiun-Yi, and Lily 2017). The company can open a cooking show on YouTube in order to teach people how to prepare healthy meals. It can also provide recipes through the home delivery subscription service. People buy food in order to cook it and eat it as a tasty meal. A food service mobile application can be used to promote efficiency (Lee, Lee, and Jeon 2017). The company can provide tasty meals to its customers on demand. By providing a subscription service, the company can avoid direct competition with Tiger Foods. It can also serve the needs of a growing number of single people in urban areas who prefer to order healthy non-fast food products. By serving the needs of an increasingly busy and affluent urban market, the market can create an uncontested market space where it can create growth unrestrained by intense competition.

Tier One

“Soon to be”

Online customers

Tier Two

Allergies and health

conditions

Tier Three

Home delivery subscription service

 

 

 

 

 

 

 

 

Figure Six: Pioneer Noncustomers

The company should focus more on noncustomers.

Conclusion

The blue ocean strategy is the most appropriate framework for Pioneer to grow exponentially and innovatively.  Pioneer operates in an industry where there is limited room for growth. Although the company is in a strong market position, there is a need to focus on future growth. The FMCG industry is intensely competitive as many companies fight for the same market share. There are limited growth opportunities, and companies have to spend more in order to gain market share. A blue ocean strategy can enable the company to create an uncontested market space. The company can turn from a products company to a service-based model. The blue ocean provides an innovation opportunity through the identification of noncustomers. By shifting from a product-oriented company to a food subscription service, Pioneer can triple its revenue. By targeting previously unexplored noncustomers, the company can embed its products into service offerings that have greater value to the customer. Customers will purchase the chef-prepared, healthy gourmet meals. As a service-based model, Pioneer will reshape the boundaries of the FMCG industry. The company can create a new value frontier by selling its foodstuffs as well as prepared meals.

By adopting a blue ocean strategy, Pioneer should position itself between the FMCG and the lifestyle industries. The company will have a more significant impact on the lives of its customers if it chooses to provide them with healthy meals, cooking recipes, and cooking lessons. There are many noncustomers who can eat the company’s foods because it is cheaper than restaurants, healthier and more convenient because it can be delivered to their workplace. The company can also target people with allergies because they ignored by the food industry. The company can thrive in the blue ocean market by revolutionizing the FMCG community.

 

 

 

 

 

 

 

 

 

 

 

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