Hemp Foods Australia:
Hemp Foods Australia which is located in pristine bungalow nsw Hemp Foods Australia is a subsidiary of a larger global firm called Elixinol Global Limited (Elixinol Global, XXXXXXXXXXElixinol Global Limited specializes in researching, producing, and dealing in CBD products that are derived from hemp (Elixinol Global, XXXXXXXXXXHemp Food Australia was founded in 1999 (Hemp Foods Australia, n.d). The company deals in wholesale, retail, production and export of hemp-based food products in Australia (Hemp Foods Australia, n.d). Paul Benhaim is the founder and CEO of Hemp Foods Australia and has a great role in the inception and subsequent rise of the company in the Australian market (Hemp Foods Australia, n.d). This company is one of the very first hemp-related food businesses in Australia and has established itself as the largest manufacturer of food products based on hemp in Australia. Paul initially worked in Europe on hemp food products and helped to manufacture the very first hemp-based snack bar which was sold in the larger legalized markets of Europe (Benhaim, XXXXXXXXXXThis snack bar was made from Hungarian hemp seeds and was widely accepted in the European market (Benhaim, 2000).
When Paul came to Australia he saw a great opportunity in the untapped market of hemp food products (Benhaim, XXXXXXXXXXHe completed thorough research on the hemp food products in the Australian market and concluded that most of the companies dealing with hemp products were completely disregarding the quality feature of products (Benhaim, XXXXXXXXXXMost of the already produced hemp products contained great amounts of unwanted and harmful constituents like bacteria and molds. The founder of Hemp Food Australia, with a vision to provide high quality, sustainable and safe to use hemp products launched the company (Benhaim, XXXXXXXXXXAll the product range of Hemp Foods Australia is based on locally produced high-quality hemp seeds (Benhaim, 2019).
Recently, in the last year, Fe
uary the parent firm Elixion Global signed approved the selling of the company to a Chinese pharmaceutical giant called Yunnan Lvxin Biological Pharmaceutical Co which is led by its parent organization called Shanghai Shunho New Material Technology (Ogg, XXXXXXXXXXThe global firm through this selling signed an additional contract with the Chinese firm to produce and distribute Elixinol’s hemp-based products in China, Hong Kong, and Macau (Ogg, XXXXXXXXXXHowever, a few months later the acquisition was reversed and the firm held on to Hemp Foods Australia (Simcock, XXXXXXXXXXThe major reason was the COVID -19 pandemic that reversed the acquisition (Simcock, XXXXXXXXXXThe Elixinol is now considering further enhancing the operational and distributional capacity of Hemp Foods Australia. Through these steps, the company aims to achieve higher revenue growth through a highly profitable product range at the subsidiary (Simcock, 2020).
PESTLE Analysis:
The political factors for long have had implications on hemp-based products in the past. In 2002, the founder of Hemp Foods Australia, Paul Benhaim, researched extensively and formulated a detailed application su
ounding hemp products (Benhaim & Marosseky, XXXXXXXXXXThe application was then submitted to the Australian Government in order to lift the ban from edible usage of hemp products in Australia (Benhaim & Marosseky, XXXXXXXXXXThe government on this application ca
ied out a detailed investigation. The investigation came to the conclusion that Hemp products are not only safe but a great nutritional alternative food. This research garnered great support from the government (Morgan, XXXXXXXXXXBut the then prime minister using his political influence simply threw the application and research findings out of the window and kept the prohibition of edible usage of hemp-based products intact (Morgan, XXXXXXXXXXHemp Foods Australia during this period of time had to initially categorize its product range as external body care (Morgan, XXXXXXXXXXHowever, this prohibition from a merely political standpoint has
ought the political debate regarding hemp products to the forefront (Morgan, XXXXXXXXXXDue to constant debates in the political paradigm based on the research evidence’s inclination towards the safe and beneficial nature of the use of hemp the prohibition was lifted in 2017 (Food Standards Australia New Zealand, XXXXXXXXXXVarious political parties like Australian Greens and Help End Marijuana Prohibition (HEMP) helped to create a conducive political environment for hemp-based food products in Australia (Price & Munckton, 2018).
Since the lifting of the ban on hemp-based products, a plethora of economic opportunities has come into existence in the overall market of Australia for Hemp Foods. The decades of unmatched experience of the parent company in manufacturing and dealing with hemp-based products has provided the company with a great competitive edge in the market. It has been listed on the Australian Stock Exchange to further strengthen its position in the Australian market (Hemp Foods Australia, 2018).
The sociological debates su
ounding hemp products in the recent past have presented a great number of opportunities for hemp-based food products. The social stigma encircling hemp has now diminished on a larger scale (Sinclair et al., XXXXXXXXXXThe research and debate have changed the public perception of hemp and therefore, people have at large accepted the efficacy of hemp-based food products (Sinclair et al., 2020).
The legal battles have been an important facet of Hemp Foods Australia’s subsequent rise as the market leader. The Food Standards Australia New Zealand develops the laws and standards pertaining to food-related matters. Basically, this authority submitted its report on the safe usage of low THC hemp-based products various times to the incumbent governments. Their recommendations were finally accepted and enacted into law by the ministers in 2017 (Food Standards Australia New Zealand, XXXXXXXXXXThis legal dimension of consumption of Hemp products has helped to improve the company its product range. Moreover, the legal affirmation has paved the way for the company to produce high-quality edible hemp-based products (Catt, 2019).
The high advancement in technological aspects has a direct potential impact on the growth of Hemp Foods Australia. The company has time and again used technological interventions to improve the production of hemp on its own farms. Moreover, the company has a designated R&D department based on the state of the art technological facilities to improve the product range (Benhaim, XXXXXXXXXXThe technology has also helped better monitoring of the quality of products (Benhaim, XXXXXXXXXXMoreover, the increasing use of e-commerce platforms like Amazon has improved the accessibility of products for consumers (Catt, 2019).
The mantra of Hemp Foods Australia is based on sustainability. Therefore, the entire process is environmentally friendly and is based on the natural processing of raw materials (Crini et al., XXXXXXXXXXAll the food products are based on natural resources produced on the farms owned by the company.
Porter’s Five Forces:  Â
Competitive Rivalry
There are various competitors of Hemp Foods Australia including local and global companies dealing in hemp food products in Australia. One of the global companies operating in Australia is Manitoba Harvest (Li, XXXXXXXXXXSome of the other competitors include Nutiva, Vega, Thompson’s, and health lab (Black, XXXXXXXXXXThough Hemp Foods is cu
ently leading the market share, in order to maintain its market share, the company has to respond appropriately to the threats posed by the competitors (Elixinol Global, XXXXXXXXXXIn coming years the company needs to utilize its global experiences and spend more in research and development to keep up with the pace of global companies. The company also needs to expand its product range in order to maintain its relevance in the market.
Bargaining Power of Suppliers
In Hemp Foods case the bargaining power of the suppliers is almost non-existent because most of the hemp used in the production cycle is produced on the farms owned by the company itself. The large-scale organic farming of hemp by the company diminishes the need for external suppliers (Schremmer & Hough, 2021).
Bargaining Power of Customers
The consumer market of hemp food products is thriving in Australia. Therefore, the bargaining power of customers is a huge driver for Hemp Foods Australia to look for opportunities to not only maintain its high quality but also place the product pricing adequate for the customers in order to maintain a loyal customer base (Schremmer & Hough, 2021).
Threat of substitution
The global leader of hemp products, Manitoba Harvest poses the biggest threat of substitution to Hemp Foods Australia. This is because of the fact that the resources at their disposal are far more than that of Hemp Foods Australia (X Herald, 2020).
The threat of New Entry
The relaxation of laws in hemp production and hemp products in recent years in Australia has paved way for a conducive environment for companies in the hemp industry. Many competitors have stepped into the Australian market, and there is still room for more global and local competitors to step into the market. New entrants in the market with a small but innovative hemp product range can seriously impact Hemp Food Australia’s, market share (X Herald, XXXXXXXXXXMoreover, low pricing models by new entrants can further deteriorate the positioning of Hemp Food Australia (X Herald, 2020).
Summary:
The recent legal authorization of consumption of hemp-based food products has completely transformed the hemp industry of Australia. Moreover, the removal of social stigmas su
ounding hemp usage has also impacted the hemp-based food industry. This has opened multiple doors of business opportunities for Hemp Foods Australia. The company has so far undisputedly established itself as the market leader in Australia due to its high quality and exceptional experience in the said domain. But in order to maintain its share, it would have to keep improving the product range and keep the cost for consumers friendly, otherwise, the thriving hemp industry has various competitors which pose a constant threat to its market share. Â
PART B
Marks:Â 35 marks
Due Date:Â 21 May, 11.30pm
Word Count:Â 4000 words excluding references, in-text tables and attachments.
Group size:Â (The same members as in Part A)
Task:
Your task now is to build on Part A and analyze the remaining 5C's; company, competitors, customers and collaborators. To synthesize all this information you will do a SWOT, and then a TOWS before deciding which particular business strategy your company should adopt. You will conclude with recommendations and an implementation plan.Â
Structure your assignment as follows:
1. Company's history, development, and growth.
Add the work you did in your Part A here.
2. Â External environment.
Add the work you did on the PESTLE and 5 forces here and continue the external analysis by focusing on competitors and customers. After you have collected, synthesized and analyzed this information you can complete your list of opportunities and threats. Again, make sure you include cu
ent and credible information from our databases and industry reports.Â
3. Internal environmentÂ
The next step is to analyze the strengths and weaknesses of the company you are focusing on. Some companies have strong research and development capabilities while others may be particularly good in sales and marketing. To guide your company analysis you should use Porter’s Value Chain and the VIRO model. You should also consider partnership / collaborative