Case Study 30 - Paradise Farm Organics.

Authors Avatar

Assignment One

Case Study 30 – Paradise Farm Organics


Question 1:

  1. Threat of New Entrants – The organic farm/organic food industry is filled with lots of small companies trying to make it big, the barriers of entry to this industry are enough to put off all but very serious farmer, companies and individuals. Organic food producers require large amounts of funding to finance the purchase or growing of organic base foods, production plants, packaging and distribution.  Large well established companies are therefore advantaged.  However, there is evidence that there are changes within the organic food industry, smaller organic food companies are forming alliances with larger more established firms and conventional food organisations for the distribution of their products.
  2. Power of Suppliers  - The organic food industry is dominated by a small number of larger suppliers.  These suppliers have vertically integrated their businesses.  This vertical integration has significant impact on a businesses position in its industry with respect to cost, differentiation and distribution.  Supermarkets have also developed the organic food market and supply sources, and in doing so encouraged the growth of  small independent specialists which are now offering a similar one-stop-shop approach for oranic products.
  3. Power of Buyers – Organic food and drink is now one of the biggest growth area of the  food retail market.  As well as catering to consumers' increasing demand for good quality, unadulterated food, it ties in with lifestyle and leisure patterns concerned with health and well being which makes it a distinctive food sector1.   The succession of recent food crises (for example genetically modified foods) has seen the increased demand for organic foods. However, there is some sign of an organic backlash with certain groups and media questioning, not only the validity of the term organic, but whether there can ever be sufficient volume production to rival conventional production2.
  4. Availability of Substitutes – The only substitute for organic food is conventional food.  Conventional food is readily available through many distribution outlets and can be obtained at cheaper prices than organic foods.  Conventional foods will continue to be more appealing to the masses even though there has been exponential growth in the consumption of organic foods in recent years.  
  5. Competitive Rivalry – The large growth in the organic food industry in recent years means that more and more firms are trying to enter this growth market. Private firms are seeking to buyout other small to mid-size firms.  Larger food companies are also likely to produce organic food lines buy purchasing smaller companies.  Sales have also moved into the mainstream retail trade, and the convential food industry is becoming increasingly involved. The rivalry in this industry is intense and will continue to be so whilst the demand for organic foods increases.
Join now!

Question 2:

One of the greatest strengths of Paradise Farm Organics is the ability to adapt to the ever-changing global market. With increased worldwide demand for  foods, Paradise Farm recognised the need for the company to be true to its roots as a top  quality organic food producer.  It has continued to produce an extensive range of foods not only for the traditional organic food consumers but for the general population. As the general American population spends less and less time preparing meals “44 percent of weekday meals were prepared in 30 minutes or less.”, Paradise Farms has provided ...

This is a preview of the whole essay