Mission Produce Assay

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By being a vertical integrated company, Mission was able to build a infrastructure that allowed them to access other markets more efficient than their competitors.

- Describe the five forces for the avocado industry. What force(s) is (are) most important?

- Threat of new entry: this threat was low at industry level but different level at different countries. Government policy around importing avocado posed a barrier.

- Rivalry among existing competitors was moderate. They had one main competitor, Calavo with 19% market share.

- Bargaining power of customer: buyer information, customer would choose avocados that were ripe and low price and also new customer need to be educated on ripening process of fruit and new cuisines.

- Barging power of suppliers was the most important for Mission Produce. They took advantage of vertical integration to reduce production cost, supply superior product and create brand identity.

- Threat of substitutes was low because avocado is unique fruits, consumer can find different one but the taste might not be the same.

- Is Mission’s industry attractive? Why?

Mission’s industry is attractive because it is growing business and many opportunities for growth. In addition, Mission had a strong market share position and only one main competitor. In the case mentioned, “Mission sale increase from $87 million in 2000 to $462 million in 2013”

- What is Mission’s major generic strategy?

Mission tried to differentiate their products by deliver ripe avocado to their customers. As the same time they were reducing cost by growing avocado in Peru. As the case mentioned “we can get product from Peru to California or New Jersey for $14 a lug. The market today is in the low $30…”

- How is Mission doing in terms of international competitive advantage and the four factors of Porter’s diamond?

Mission was investing internationally by building growing production capability in Peru and possible elsewhere. This included building infrastructure, building relationship, and developing skill workforce.

- Describe Mission’s core competency (or competencies).

Mission know well and have a passion for avocado industry.

- Is it a Hyper-competitor?

Mission was a strong competitor to compare with other companies, but it was not a hyper-competitors. Mission focus on organic growth and building vertically integrated company. Mission Produce was trying to build their strength and building complete supply chain.

- Is it engaging in any form of disruptive technology or is it being affected by the innovator’s dilemma in any way?

Building ripening center was a form of disruptive technology. They were new, innovated and differentiated them from their competition.

- Based on your analysis, what is Mission’s major competitive advantage?

The Mission’s major competitive advantage was the company got an early jump on the competition for ripening centers. According to the case, Barnard saw the ripening centers as a strong competitive advantage. In 2013, Mission operated seven ripening centers in the U.S and one in Canada. Almost 40% of Mission’s U.S. avocado sales were ripened product. Barnard had said “Retailers are clamoring for ripened fruit. Restaurants love it as well because we make it easy for them. Many chains have added avocados as a permanent menu item. We are five-to seven years ahead of everyone else. Today Calavo [Mission’s top U.S. competitor] has only three ripe centers to service the entire country.”

- What business is Mission in?

Mission produce is a international importer, processor and distributor of avocados. The company has operation in the U.S., Mexico and Peru.

- How might the firm grow in the future?

Mission produce might expand more business model into new geographic markets. Barnard was convinced that avocado farming in low-cost countries was a significant opportunity to secure more value. Peru was especially attractive. The climate was favorable to agriculture production and particular food for avocados. Land was relative in expensive. The government was supporting agriculture development and encouraged foreign investment. Free trade agreement was in place with all major trading partners. Also in the case mentioned “Besides inexpensive land, Peru offered significant growing advantages. Avocado trees reached full production in four years instead of the normal five to six years.” Also Peru orchards produced more fruit per year.” Beside growing avocados, Mission could use available land to invent into different varieties such as table grape.

Mission could replicate Peru model in other part of the world for instance in Africa to supply avocado for Europe.

Mission also could expend processing facilities near Peru farms. This would allow it to turn damaged or excess fruit into fresh or frozen guacamole.

On the other hand, Mission Produce could invest more into international market development or continues expending distribution and sale network to Europe.

Other growth opportunity would be using avocado model for other crops once they had more experience as an vertical integrated producer.