Case Study Analysis for my MKE480 Marketing Strategy class

1. Camposol Case Analysis
By Hoan Ngo, Jackson Aaron, Dylan Updike
MKE480 - Marketing Strategy
Professor Laurent Josien

2. Case
Overview01

3. Case Overview

4. SWOT Analysis
Strengths:
● Location in Peru provides a strong growing
season and results in superior yields.
● Vertically integrated supply chains.
● Camposol main strength is that they are able
to offer produce at a fixed price year-long.
● Diversified product portfolio.
● Global each to largest markets.
Weaknesses:
● No branding to consumer.
● Water infrastructure and Peruvian legislature for
water usage.
● Need for an international third party sourcing to
become a reliable year round supplier.
● Limited branding to consumers.
Opportunities:
● Future growth projected in both major
markets of United States and Asian Pacific.
● Further expansion of their existing fresh
produce and seafood operation.
● Diversify their geographic presence in key
markets.
Threats:
● Need to differentiate their products from the
growing competition in South America.
● Labor security, as Camposol continues to grow
the demand for employees will continue and more
resources must be allocated to employee housing,
recruiting and transportation.

5. Porter’s Five Forces

6. Threat of new entrants
● New entrants can be attracted to the industry because of high profitability
● The ease of entry into the industry is restricted
● There are high barriers to entry
● These are government policies, consumer loyalty, brand differentiation
● Low to negligible switching costs experienced on the part of the consumers and buyers
● Large economies of scale
Threat of new entrants is Low

7. Threat of substitute product
● There are direct or indirect substitutes
● Switching costs for direct substitutes is not very high for
consumers
● The per-unit-volume prices may be higher or lower ⇒ This
makes the threat of substitute high
● Alternatives to the product or substitutes may not be able to
provide the same quality
● Switching costs towards alternatives becomes higher, and
consumers may not switch to substitutes
The threat of substitutes is Low

8. Bargaining power of buyers
● Camposol will not experience switching costs for switching
buyers
● Multiple product offerings by buyers also increase buyer
power
● Products offered by retailers are differentiated based on
several characteristics ⇒ retailers are expected to offer a
wide range of the same product category
● High intensity in the industry competition
Buyer power is Moderate to High

9. Bargaining power of suppliers
● Independent sellers and suppliers can locate
different opportunities and invest in alternative
markets
● Suppliers can integrate forward into the decision
making and business dynamics themselves as well
● Also, to the buyers, the quality of the supplies and
the raw materials is of utmost importance
● High number of suppliers ⇒ Camposol can switch
to different suppliers at any time without
experiencing any costs of the business
Bargaining power of suppliers is Average

10. Industry rivalry
● The market is highly fragmented, which makes it more
competitive
● The market is never too concentrated ⇒ it has players of varying
size of operation
● Producers make use of brand management techniques and
contemporary merchandising
● Purchasers and buyers have a wide range of products to choose
from, with relatively low switching costs
● Players continue to operate in the mass markets at large
● The high fixed costs and the high bargaining power of the
buyers ⇒ lowering of the prices from manufacturers add to the
highly competitive nature of the industry
The overall industry rivalry is High

11. Company
Challenges02

12. Company Challenges
● Labor Security
To meet the demand for the 14,000 and growing employees working at Camposols farm, they spend
about 1 million per year to transport employees, free of charge up to 200 km to and from work
● Water
Camposol is
reliant on Peruvian production of infrastructure to transport water from the Andes watershed east,
back to the western desert.
● Growing Season
Another emerging issue
Camposol is facing is producing a harvest yield large enough to supply foreign markets year-round.
● Emerging in foreign markets
Moving toward market-orientated production

13. Financial
Performance03

14. Financial Overview

15. Financial Overview

16. Financial Overview

17. Proposed
Solutions04

18. Advantages Disadvantages
● An increase in future sales
revenue
● Increase brand awareness
and recognition among
competitors
● Develop a distinct and
distinguished brand image
which is additionally a
premise of differentiation
● Strengthen distributional
relationships with
retailers/buyers
● High market research costs
● Risks of consumer behaviors
● High intensity of competition
● Culture barriers
Consumer Brand Proposition (Hoan)

19. Cost & Revenue Forecast
Year Revenue Growth rate Average growth rate
2014 267,554,000
2015 289,329,000 0.08138543995
2016 276,691,000 -0.0436803777
2017 368,440,000 0.3315937273
2018 455,382,000 0.2359732928 0.1513180206
● Projected sales revenue in 2019 would be $524,289,503
● 10% increase in 2019 sales revenue from new marketing campaign which would result in growth rate
of 0.25 and $569,827,703
● A rough estimate for the new marketing campaign is 6% (equivalent to $34,189,662) of Camposol sales
revenue, including 3% (equal to $17,094,831) will be invested in digital media channels; 2% (equal to
$11,396,554) will be spent on product displays; and 1% (equivalent to $5,698,277) will be used to
packaging changes

20. Third-party Sourcing (Dylan)
Advantages Disadvantages
● Meet the Goal of having a
year round presence in US
retailers
● Stable Pricing
● Gain positive brand
awareness
● Enter emerging markets in
China
● Not cost effective to use
outside sourcing
● Temporary solution
● Sourcing price is demand
dependent

21. Cost & Revenue Forecast
● The average market growth of avocado in the US is +41,000(mt) per year.
● In 2018 Camposol sold 43,211(mt) of avocado globally
● If we increase third party sourcing to 5000 (mt) during Peru’s off season for 2019.
● Growth Rate 11%: Cost of Goods Sold and Costs Associated to Sales will rise due to third party sourcing.
● Expected gross profit $56,125,000

22. Expand Blueberry Production in Peru (Jackson)
Advantages Disadvantages
● Meet of goal of increase direct
sales to grocery retailers in
the United States and China
● Demand of blueberries is
projected to increase If 2008
to 2014, average annual
growth rates continued,
global demand could reach 5.7
million MT by 2024
● Expanding production allows
them to meet demand and
diversify into other blueberry
varieties
● If demand forecast are wrong
the costs are high
● Water problem in Peru could
harm yields of blueberries
● Takes away growing area for
other products like Avocados
or Shrimp farming

23. Cost & Revenue Forecast
● Camposol increased the growing area
from 954 in 2015 to 1,460, producing 12,863
MT, doubling the MT per Has to 8.81, as
well as increasing Gross profit to $61,147
for 2016.
● Using the same growth from 2015 to 2016,
2017 is projected for 2,500 Has that will
generate 41,848 MT at 16.74 MT per Has.
● The cost of increasing production and the
growing fields to 2,500 Has will be
$88,912,670.
● Following the same growth from 2015 to
2016. The Expected 2017 gross profit
$246,351,330.

24. Camposol 2.0
Advantages Disadvantages
● Product differentiation in
terms of quality
● Ability to tackle different
target markets based on
multiple product qualities
● Potential to become a global
blueberry and avocado
suppliers
● A rapid increase in future
sales revenue
● Opportunity to expand
“room” on retailers’ shelves
● Lack of product diversity
● Lost of distribution networks
for discontinued products
● High costs in land conversion

25. Cost & Revenue Forecast
● An increase in 2.670 (ha) of land from the decommission of the Shrimp Ponds and other
growing lands
● Planting 70% in blueberries and 30% in avocados in these lands
● Revenue from Blueberries fields is $135,843,000; Avocado fields is $20,793,000
● Cost of Aquafarm conversion to farmland is $180.55/Ha, resulted in $234,715 investment
● Cost for converting the field for pre-establishment crop production is $162.24 per Ha, required
an $222,268.8 investment
Land from Decommission of Shrimp Facilities
Avocado Blueberry
Land (Ha) 801 1869
Volume (MT) 8811 16465.89
Weighted Avg. price 2.36 8.25
Revenue (000s) $20,793.96 $135,843.59

26. Decision Matrix
Proposed Solutions
Criteria (1-5) Consumer
Brand
Proposition
Outsourcing Blueberry
Production
Expansion
Camposol 2.0
Market
Opportunity (5)
4 4 4 5
Costs (4) 1 2 3 4
Sales
Performance (4)
3 1 3 4
Competition
Level (3)
3 1 2 3

27. Conclusion