Hubbard Foods Case study

Company Background:

Hubbard foods ltd was established in 1988. Primarily it was named Winner Foods but later in 1990, it changes its name to Hubbard Foods. Dick Hubbard is the founder of Hubbard’s Foods Limited. The company is privately owned by its shareholders, Dick and Diana Hubbard, and since early 2001 has been governed by a Board of Directors.

The company is a cereal manufacturer located in Mangere, Auckland. The company has grown its employee numbers from 4 then to 150 now. It has a current (2001) turnover of approximately NZ$27 million. The company is a cereal manufacturer located in Mangere, Auckland. The cereals manufactured in the company are distributed all over New Zealand and also get exported to Asia, Australia, and the UK.

About the CEO:

The profile of its CEO and founder, Dick Hubbard has been synonymous with social responsibility in New Zealand for a variety of years. This has earned the company a solid, positive reputation. Dick Hubbard has also been instrumental in the company’s membership and representation on the executive of NZ Businesses for Social Responsibility and therefore the New Zealand Business Council for Sustainable Development. Hubbard’s has grown from a micro-business into a large business while maintaining a family-based culture. Dick is well known for taking all 100 employees on an overseas trip as a bonus.

Products:

Hubbard’s produces a range of 23 breakfast kinds of cereal that are targeted towards the mid-high price ranges in the cereal market. The range of food products offered by the company is oats, fruit, Bran, and Muesli. It is a section that comes within the brand name of Hubbard. A variety of cereals are sold by the company such as clever clusters, berry nice, fruitful lite, fruitful breakfast, etc. Also, they manufacture products such as sugar is gone in which the products are manufactured for diabetic patients. While the main output from the operation is high-quality cereals under Hubbard’s brand, the company also manufactures some product lines for a range of supermarket private labels.

Demand for breakfast cereal products has a slight seasonal variation. In summer months, consumption is approximately 10% higher than in winter months.

Competitors:

Hubbard holds a share of 18.5% in the cereal market of New Zealand in 2001. It makes them the third-largest player in the market. There are many competitors of Hubbard’s available in the NZ market but the tough and strong ones are Kellogg’s, Uncle Toby’s, and Sanatarium

Sanatarium is a company based in New Zealand situated in the suburb of Auckland. If either Sanatarium or Hubbard’s runs out of an ingredient, the other will supply it if they have it available.  Sanitarium Health Foods was established over 100 years ago by the seventh-day Adventist bakers. He owns strong philosophies on vegetarianism and healthy living. Their major breakfast cereal products are Cornflakes and Weetbix and they have entered the cereal bar market as well as the breakfast drink market.

Vision statement:

Providing sustenance to the soul, body, and mind is the vision of Hubbard Foods Ltd. The body means a commitment to manufacturing breakfast cereals and where appropriate, other food products that are innovative, nutritionally responsible, and responsibly priced.

Also, the corporate cares about social and other people’s responsibilities, planet and environmental responsibility, and profits and financial responsibilities. Therefore, they pride themselves on innovation and embracing new technology and concept, and communication with their customer is of utmost significance to them.

External threats:

Seasonal Variation:

There is less consumption of approx 10% in winter months as compared to summer months. The muesli style of cereal is becoming more demanding because of its convenience as compared to other traditional cereals.

Strong Competitors:

Uncle Toby’s and Kellogg’s are two major competitors.

External opportunities:

Capture in an Untapped Market: The untapped market has been captured by the company. This is due to the high growth in 1993 and increasing demand in the future.

Internal strengths:

Outdated workflow: The company is weak in technology as the manufacturing process is still manual and some mixings are still done manually. The machine needs to be redesigned to save time in production. There is no standard flow in the company.

Did not be the Strategic Follower:

The company did not be the strategic follower may lose the position in the market because it did not follow Uncle Tobys and Kellogg’s to produce cereal bars.

Lack of Advertising:

The thinking of the company is that heavy advertisements might result in social pollution. It is not the best option for cost-saving.

Major driving force:

Majorly Hubbard’s exported its product to Australia. Only a few of the products were exported to Hong Kong, Singapore, United Kingdom.

The company cannot perform as its competitors because of its size. Its market share is smaller than its competitor. Without having a well-designed production line, the company is not able to export out of the country due to not having ht enough product. There is a direct connection between the export rate and the production line.

The company can enter into the larger market as it is expanding. It is entering into the new market by a new wholly-owned subsidiary, acquisition, strategic alliances, licensing, and exporting. Using the exporting way and went into the U.K., Singapore, and Hong Kong, it can try to use the strategic alliances with the global supermarket first, because of one of their competitors.

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