Impossible Foods Report PDF

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CASE ANALYSIS: IMPOSSIBLE FOODSExecutive Summary -An analysis of the external environment of the company, such as customer analysis, competitor analysis, and market trends analysis. -Provide an analysis of the market opportunities and market/environmental threats faced by the company. Depending on t...

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CASE ANALYSIS: IMPOSSIBLE FOODS Executive Summary An analysis of the external environment of the company, such as customer analysis, competitor analysis, and market trends analysis. Provide an analysis of the market opportunities and market/environmental threats faced by the company. Depending on the situations of the company depicted in the case, you can put more emphasis on either opportunities or threats. Identify TWO most critical "problems" of the focal company (i.e., challenges in dealing with the market opportunities or threats you stated in pt(2) above). For example, the problem should shed light on the resources, knowledge, and capabilities that the focal company needs (but doesn't have yet), preventing it from effectively mitigating market threats/seizing market opportunities. Explain clearly how your analysis leads you to come up with these problems/challenges. - Nicole Propose solutions (strategies) for addressing the identified problems/challenges. For each problem/challenge, please consider two alternative solutions. In other words, you should provide two solutions for each identified problem. Include criteria & metrics to assess the performance of each solution. Evaluate the pros and cons of each solution in terms of their feasibility, effectiveness, resource required, objections from top management etc. Lay out a concrete action plan (tactics) for each solution. That is, how to implement the solution, in terms of timeline, resource used, internal & external parties involved, etc. Spell out the goals and objectives of the action plan. -

TABLE OF CONTENTS

1.0 Executive Summary………………………………………………………………………………3 2.0 External Environment Analysis ………………………………………………………….………4 2.1 Customer Analysis ………………………………………………………….……………4 1

2.2 Competitor Analysis ………………………………………………………………………5 2.3 Market Trend analysis ……………………………………………………………………6 3.0 Market Opportunities & Threats …………………………………………………………………6 3.1 Opportunities ……………………………………………………………….……………..6 3.2 Threats …………………………………………………………………...………………..7 4.0 Two Critical Problems …………………………………………………………….…………….8 4.1 Marketing Planning Problem …………………………………………..…………………9 4.2 Business Planning Problem ………………………………………………………………9 5.0 Solutions ………………………………………………………………………………………..10 5.1 Branding and Positioning ………………………………………………….……………10 5.2 International Marketing Strategy……………………………………...…………………10 5.3 Business Departments and Planning Tools………………………………………………11 5.4 Vertical Integration………………………………………………………………………12 6.0 Pros and Cons …………………………………………………………………………………..12 7.0 Concrete Action Plans ……………………………………………………...…………………..14 8.0 Conclusion ……………………………………………………………………………………..15 9.0 References …………………………………………………………………………..…………16

1.0 EXECUTIVE SUMMARY - NICOLE

Impossible Foods Inc. is an American company that produces plant-based substitutes to meat products, driven by their vision to transform the global food system to be environmentally sustainable utilising disruptive food technology. The organisation was founded in 2011 by Pat Brown, a medical doctor and biochemist whose mission was to reduce the impact of climate change by offering consumers of meat, plantbased alternatives that require less greenhouse gas emissions and encourage sustainable use of natural resources. The organisation’s objective is to reduce society’s impact on the environment through replacing 2

the use of animal products using technology driven food production. The company currently operates across 20, 000 restaurants in the US, Canada and Asian markets (Murphy-Sierra, 2020) and is available in more than 11, 000 grocery stores. Impossible Foods, valued at $2 billion, has raised over $750 million from investors towards the research and development of their products and continues to strive towards the development of other meat substitute products including milk, steak, bacon and fish. Throughout the years, as the market for meat substitutes have drastically increased, Impossible Foods has experienced increased competition from other companies seeking to gain market share of the plant-based industry. Additionally, the organisation has experienced criticism from their consumers due to operational issues such as product shortages and management issues resulting in a lack of competitive strategy, budgeting capabilities and strategic drive. This report will analyse all facets of the organisation's business and marketing aspects including analysis of the external environment consisting of customer, competitor and market trends. Additionally, there will be research conducted regarding market opportunities and threats, identification of two core problems faced by the organisation, formulation and evaluation of solutions that the company can adopt as well as a detailed action plan to successfully implement those strategies.

2.0 ANALYSIS OF EXTERNAL ENVIRONMENT- HAD The analysis of a company’s external environment

oundation and ultimate success of a

business, therefore, there is an immense signifi

ng the factors that influence the internal

operations of the company. Analysis of the e

ment is a pivotal stage within the process of

strategic management in ‘developing strategies of

or that allow the organization to fulfill their mission

and achieve its goals’ (Morgunova & Bolkin, 2021, p. 2). It provides the ability to predict opportunities, prepare for unforeseen circumstances and develop strategies that transform threats into opportunities. The core aspects that determine this are: customers, competition, and market trends. The analysis of these factors 3

break-down the nature of Impossible Foods’ external components, and how it affects strategic business and marketing factors. 2.1 CUSTOMER ANALYSIS Customers possess significant influence within a company, ultimately determining the overall success of an organisation within the market. Impossible Foods formulated their business objective to create plant-based products that emulate the qualities present within animal products to replicate the taste and texture of animal meat produce, requiring no compromise to consumers preferences as well as their dietary needs (ref. to info on page 6, para 3). Divergent to traditional marketing towards vegan and vegetarian consumers, Impossible Foods differentiates their products by specifically marketing their brand towards meat consumers as opposed to plant-based consumers, thus positioning themselves as a competitor within the meat industry. ‘People who love meat are going to keep wanting it, so the way to eliminate the industry is to develop meat from plants that tastes better than meat from animals’ (ref. to info on page 6, para 3). Pat Brown, the founder and CEO of Impossible Foods aims to target the regular meat-eating consumer, a market that is traditionally excluded from plant-based substitute products. Customer segmentation is a valuable tool for marketers seeking to understand the evolving market and consumer needs which are transforming retail and service paradigms (Raudabaugh, 1994, p.36). Significant insights can be formulated through segmentation of the consumer market, particularly within the behavioural profile or psychological profile of the consumer base. This analysis involves identification of consumer buying criteria and purchasing power in customer decisions. Impossible Foods utilises behavioural segmentation, targeting avid meat consumers, cultivating their products to emulate the qualities found in regular meat products, while maintaining similar prices and affordability to that of beef to fulfil the needs of the customer. Impossible Foods conducted thorough research and development strategies to further identify the psychological profile of their consumers through prototyping of their products across multiple avenues, selling their plant-based burger in leading fast-food chains such as Burger King, to conduct a test on the average beef-consuming customer and their reception towards the product. The “Impossible Whopper” and the regular “Whopper” were also close in selling price with a difference of $1.40, price varying in locations (ref. to info on page 9, para 7). Consumer attitudes captured positive behavioural responses towards the

upon the release of their ‘Impossible Burger 2.0’ led to unfavourable consumer perception towards the business with customers experiencing conflicting emotions towards the company. Overall, consumers are continually exposed to the business’s products and services, attracting a larger educated millennial demographic.

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2.2 COMPETITOR ANALYSIS Competitor analysis assists firms in participating in ‘interactive market behaviours, understand firm rivalry, strategies for superior competitive gains, and improve their assessment of competitors’ competencies and the threats they represent’ (Guo et al. 2017, p. 736). The introduction of Impossible Foods in the industry increased competitive behaviours amongst the plant-based meat market, in particular, the attempt to gain market leadership against their largest competitor, Beyond Meat. The competitor analysis consists of critical components including identification, characterisation, evaluation, advantages/ capabilities, anticipation, and formulation of competitor-specific strategies. Beyond Meat was established in 2009, releasing the first plant-based burger option available on the market, which retailed in major retail markets in the U.S. It has since extended its product portfolio with the introduction of plant-based sausages and meatballs across 22,000 retailers. Beyond Meat’s core marketing approach included the endorsements by paid celebrity brand ambassadors, and in 2018, the company received 9.9 billion media impressions with a 287% increase in revenue by 2019 (ref. to info on page 13, para 2). However, despite Beyond Meat’s success, Impossible Foods describe them as rather “an ally than a competitor” (ref. to info on page 13, para 4), with both businesses contributing to the sustainability of the planet. Beyond Meat’s addressable market are targeted towards vegans and vegetarians, whereas Impossible Foods' primary market are meat-consumers. The company is valued at $13 billion, allowing for successful execution of operational and marketing aspects without financial incapability (ref. to info on page 13, para 3). External shareholders continue to contribute to the investments of Beyond Meats through the purchasing of stocks, progressively increase the value of the company. Beyond Meats exhibits a sustainable competitive advantage with greater extent of industry knowledge and a strong brand image. Being the first of its kind, the company has a grander positioning in its expansion of its produce within the global market. The enterprise also possesses greater visibility and exposure than its competitors due to their sustained presence, and experience in the competitive industry. Ultimately, Beyond Meats rivalry with Impossible Foods is a close crusade which requires the most sustainable strategies to achieve maximum growth and success.

2.3 MARKET TRENDS ANALYSIS market trends analysis is a collective evaluation of a business’s position within the industry, and how ors can influence the operations of a company within a certain period. Despite vegans and uring a small segment of an industry at roughly 3% in Western Europe, the growth rate of con

urchasing plant-based substitutes continue to increase annually. Research demonstrates plant-

based milk alternatives, such as almond and soy milk, accounts for 13% of the U.S retail market and increased in 12 months by 6%, with a 3% decline in milk produced from cows (ref. to info on page 4, para 3). Around 60% of consumers are concerned with the implications of climate change, with 27% attempting 5

to reduce meat consumption (ref. to info on page 4, para 4). Through the spike in market trend changes, plant-based products are seen to be the ‘better and healthier’ alternative with an increasing number of customers incorporating sustainable practices into their lifestyles and diets. With the current market trend of healthier options, sustainable production and food substitutes, opportunities for organisations such as Impossible Foods continue to expand. Although, as consumer preferences progressively evolve, it is difficult to predict how sustainable Impossible Foods business strategy will endure within the competitive market of plant-based substitutes. However, environmental changes possess the greatest influence for the alteration in customer behaviour specifically within the food industry. This captures promising growth for Impossible Foods to continue to expand their business offerings and continue to pursue their mission through the creation of sustainable meat alternatives and contribute towards environmental restoration.

3.0 ANALYSIS OF MARKET OPPORTUNITIES AND THREATS- KHAUSILYA Impossible Foods have experienced success within the industry and in order to maintain market share, it is necessary to analyse the market opportunities and threats that directly impact upon their business. Market opportunities can be identified as an unexplored area of potential growth and potential competitive advantage for an organisation and market threats can be considered as external challenges that can negatively impact upon sales and growth of an organisation (Grant, 2021). The market opportunities relevant to Impossible Foods include increasing consumer trends of adopting plant-based products into their lifestyles and development in technology to aid in the production and distribution of their products. The threats of the organisation include criticism from health professionals, increased competition and negative implications of COVID-19.

3.1 OPPORTUNITIES Consumer Trends An increasing number of consumers are changing their lifestyles and diets towards consuming less meat with the increased popularity of ‘flexitarian’ diets ( ref. to info on page 4, para 4). This characterises an opportunity for Impossible Foods as the demand for their products continue to increase. A study conducted by Mintel found that ‘16% of US consumers avoid animal products for environmental reasons’ (Newburger & Lucas, 2019). As information on the detrimental impacts of the meat industry on the environment, many consumers are changing their diets and opting to consuming plant-based meat due to an increase in animal welfare concerns as well as the general discomfort regarding meat production and the desire to increase positive impacts on environment (ref. to info on page 4, para 5). Impossible Burger states that their Impossible Burger 2.0 requires 89% less GHG emissions, 87% less water and 96% less land (ref. to info on page 1, para 3) and thus appeals to environmentally conscious consumers. By taking advantage of the

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increase in demand they can market their products to a wider target market which can lead to higher profitability and the potential to achieve their vision of replacing animal products in the global food system.

Technology Additionally, another prominent opportunity for Impossible Foods is the increasing development of innovative forms of technology. Impossible Foods can strengthen their business operations through integration of technology into all aspects of operations from supply chain to marketing. Product and service technology can be embedded into business operations, with the potential to decrease costs, improve efficiency and allow for timely introduction of innovative products into the market. Additionally, technology has provided the opportunity for the organization to take advantage of social media marketing, utilising digital platforms to increase awareness of their products. Increasing their digital presence will allow for communication of their company vision. Additionally, utilising social media marketing can strengthen the brands image and allow for direct communication with consumers. Finally, Impossible Foods may consider strengthening their digital presence through development of their e-commerce operations as consumers increasingly purchase products online. This can be achieved through reconfiguration of their business operations upon implementing e-commerce strategies as organisations ‘should not only devise an ecommerce strategy but also consider how to transit from its current practices to its desired practices’ (Chen et al. 2014, p. 280).

3.2 THREATS Health Criticism Impossible Foods continues to face criticism from health professionals regarding the nutritional value of their products and health implications of consuming their products. While their products have been approved by the FDA, the Centre for Food Safety has filed a lawsuit against the organisation’s use of an additive used to make ‘Impossible Foods’ plant-based burger appear to ‘bleed’ like real meat’ (Food Safety News, 2021). Other health advocates have also critiqued the organisations use of genetically modified soy protein and heme, labelling their products as unhealthy and genetically modified. Richard Berman, former tobacco founder stated in the Washington Post that ‘fake meat companies happily allow their consumers to assume those benevolent-sounding ingredients are no more than healthy veggies ground down to their constituent proteins’ (ref. to info on page 14, para 2). Additionally, he stated that vegetable proteins are highly processed and lacking in nutrients. This serves as a prominent threat for the organisation as health-conscious consumers are less likely to purchase products that are highly criticised by health experts and portrayed as being

unhealthy.

Increased Competition

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Impossible Foods currently experiences competition in both the meat industry and plant-based substitutes industry, capturing a significant threat to the organisation within two highly competitive markets. In 2019, plant-based meat was estimated to be worth $11.1 billion with a forecasted growth to reach around 35.5 billion in 2027 (Wunsch, 2021). Additionally, consumers are becoming increasingly aware of the detrimental impacts of meat consumption, with veganism at an all-time high according to data from Google Trends (Chefs Pencil, 2020). As demand for plant-based alternatives continue to grow, Impossible Foods is faced with an increasing number of competitors within the industry offering plant-based products in retail stores, fast-food outlets and restaurants. Thus, Impossible Foods is faced with a prominent threat of other organisation’s gaining market share within the industry. In order for Impossible Foods to maintain a competitive advantage over competitors, the organisation must strengthen their relationships with suppliers and heavily invest in marketing operations. Implication of COVID-19 Finally, due to the detrimental impacts of COVD-19 on the global economy, Impossible Foods may be confronted with challenges associated with expansion of their products into international markets. COVID19 has negatively impacted upon business performance such as creating global supply chain delays, product shortages and public health restrictions, leading to restaurant closures and job loss. Roughly around 17% of US restaurants have permanently closed during 2020 due to COVID-19 (Hartmans, 2020) and global markets continue to experience economic decline. Additionally, customers spending patterns and purchasing power have been drastically impacted as unemployment continues to rise. Thus, this is a prominent threat for the organisation as there may be additional barriers of entry into new markets such as creating partnerships with global suppliers and increasing the number of food retailers they distribute their products to. 4.0 TWO MOST CRITICAL "PROBLEMS" OF THE FOCAL COMPANY - NICOLE One of the two leading problems experienced by Impossible Foods involves inadequate execution of both business planning and strategic marketing planning strategies across the organisation's operations, exhibiting a lack of structure and strategic capabilities. This is largely attributed to the leadership style...