The launch of a Graze savoury snacks brand into Indonesia.
I. PEST analysis (Minh)
- Political factor: Indonesia is a democratic country and maintains very good foreign relations with the
neighboring countries.
- Economic factor: Indonesia is a developing country. The biggest industries in the country are
agriculture, oil and gas, mining, hospitality, automotive,... It mainly imports and exports many
commodities with Asian countries
- Social factor: Indonesia is the Muslim country, and huge population 275.1 millions. Indonesia is one
of the world’s largest diverse countries, ethnically and linguistically. The common language is
Indonesian.
- Technology factor: Television is the main medium of mass communication; however, the use of social
media is also noteworthy. As Indonesia is located in the ocean, there are many posts and a developed
transport system.
- Environment factor: Indonesia has a chain of thousands of islands, so it can offer to both local and
international tourists. The tropical weather is ideal for agriculture.
- Legal factor: Indonesian laws protect the rights of employees, and provide adequate basic benefits for
the workforce + stringent environmental law and tax system
Opportunities and threats:
● Opportunities:
- Online channel
- Constant innovation
- Gain experience in foreign markets
- Approaching the country with a huge market
● Threats:
- Emerging among current competitors in Indonesia
- Indonesians have different preferences in taste in contrast with the US and UK
- Substitute products
Analysis for market growth or decline:
Overall, Indonesian people love snacks. With that in hand, we could safely say that Indonesia’s snacking
habits have been seen consistently throughout any age and any demographic. Thus making this industry
a more prevailing industry than the food and beverages industry. Modern grocery stores are expanding
in Indonesia and also helped lead the snack bar sale with a share of more than 70% in the distribution
channel. Supermarkets and convenience stores are one of the fastest growing sales channels.
II. CAGE analysis (Thư)
● Cultural differences:
Islam, Hinduism, Christianity, Confucianism, Buddhism are the popular religions to the local
people that affect on the development of food culture. According to the data estimated in 2010,
Muslim accounts for 87.2%, Protestant 7%, Roman Catholic 2.9%, Hindu 1.7%, Buddhist and
Confucian 0.9%, and unspecified 0.4%. Especially, the prohibited term “eating porks” is
religious belief of Muslim that cannot be found in the traditional dishes. Besides, Hinduism is
the predominant religion that the followers are not allowed to eat beef. For these reasons, Graze
cannot produce the snacks with beef and pork flavors because of the influence of religion on
Indonesian food culture. Moreover, the colors of products are characterized as they symbolize
unique aspects by delivering different values. For example, yellow is the color representing
loyalty and metal development. Therefore, if the firms follow these features, it will attract more
customers when producing in Indo.
● Administrative Differences
Food Labels and Advertisement play an important role in producing and importing for trade of
Food Regulations. The detailed information should include these key terms: the nutritional
ingredients, the date of expiration, the net weight, the name of the product, the language
requirements, coherent instructions, and so on. These figures have to be clear and easy to
understand. Therefore, the company needs to notice these compulsory requirements in order to
reduce the risk of returning items purchased online/offline.
● Geographical Differences
Indonesia is well-known for tropical climate and high humidity so that the conditions are
supporting diverse values of natural resources such as volcanoes, tropical forests, wildlife.
Under this perspective, Graze can easily take advantage of fresh seasonal fruits with different
fruits including mangoes, papaya, pineapple, peanuts, tamarind, palm sugar, and so on to get
the materials from domestic suppliers. Thus, the firm can manufacture protein products - gluten
free peanut butter & chocolate oat boosts, salt & pepper veggie protein power multipacks with
lower prices to increase the revenues.
● Economic Differences
Indonesia is a potential market in which international enterprises (small and medium-sized
companies) have a chance to extend their business and achieve remarkable accomplishments.
Low labor costs are the key characteristics that put the country in a great position for enhancing
economic development. Therefore, the firm can increase profitability and maintain
competitiveness with other companies because of cheap materials, cheap labor costs, affordable
fees of facilities and equipment.
III. Industry/value chain vs 5 Porter’s factors (2 người) - KHANH, Thảo
1. Industry chain
2. Value Chain
2.1. Research and development:
- Technology:
+ This is central to the success of Graze, and something the company has done well right
from the start. It has been the basis for its success and ability to innovate more rapidly
than other FMCG firms.
+ Graze has a tech-enabled factory in West London, which enables it to make rapid
product decisions. For example, Graze can change things like packaging remotely, so
new designs can be applied instantly to the production line. Thus the cost of innovation
and failure is close to zero.
+ Another way Graze creates value is via its strong tech team that manages everything
from the website, CRM, manufacturing and even planning and logistics – an aspect that
allows the company to create, package and market new offerings quickly, sometimes
within 24 hours.
- Research
+ Graze uses as many data sources as it can to learn from customer behavior and improve
its products.
+ Feedback and reviews of the snacks they receive in their subscription box give them
amazing insights into the snacks market and help them predict future trends.
- Graze can see data and make decisions in response very quickly.
- The company utilizes data and consumption ratings as a launch model for innovation. Quick
feedback on products also enables Graze to de-risk the innovation process.
- Product quality: Graze delivers a very high quality selection of snacks, and snacks contain no
GMOs, no artificial flavors or colors, no high fructose corn syrup, and no trans fats. Graze is a
healthy option as it is typically made with fresh, natural, and sustainable ingredients.
https://www.foodnavigator.com/Article/2019/03/22/Healthy-snacking-brand-Graze-uses-data-
to-speed-innovation
2.2. Production
- Graze develops its own recipes based on customer inputs. This allows the company to provide
healthier snacking options that are free of genetically modified ingredients, or artificial
sweeteners.
https://d3.harvard.edu/platform-digit/submission/graze-using-data-to-provide-the-perfect-
snack-box/
- Production capacity: Has 2 offices in New Jersey and New York
- Productivity: The company is able to create, package and market new offerings quickly,
sometimes within 24 hours.
- Production technology: All the mixing, jumbling and packing are run on 100% renewable
electricity.
- Quality management: all ingredients from suppliers are ensured to meet our standards
2.3. Marketing
- Packaging:
+ Its packaging strongly reflected the graze brand that online customers were familiar
with and it could hold its own on supermarket shelves – keeping the trademark Kraftpak
box look and feel by importing a Kraft sleeve.
+ Nutritional labeling as transparent as possible so grazers can make informed choices
- Distribution: online shop and offline store
- Prices: $6.99 for multipack and $4.99 for gift box
- Communication: Listen to grazers to understand what they care about and expect from
deliciously healthy snacks. Share all feedback, good and bad, to feed ideas and help the Graze
team improve how they do things for their grazers. We have monthly sessions to share trends,
reviews, feedback - and to work out what we’re going to do about it.
2.4. Sales and service
- Graze started off as an online subscription based food retailer providing a range of over 100
nutritious snacks in a customized box.
- Special Delivery: Graze produces boxes that fits conveniently in the mailbox and the
experience of getting a graze box in the mail is something people appreciate
https://produceprocessing.net/article/a-new-way-to-graze/
- Transportation: use low-emission transport
- Payment: online transactions with Paypal
- Customer service: Ensure average customer service response time is no longer than 48 hours
and achieve 4.5 stars customer satisfaction rating.
3. 5 Porter’s factors - analyzing competitive environment
a. Rivalry among Competitor is Low
- Domestic Competitors
There are three brands that have a large portion in the savory snack market in Indonesia which are
Garudafood Group, Dua Kelinci, Indofood. All these brands are domestic and popular brands in
Indonesia.
To be specific, Garuda is a famous brand name mainly for its brands Garuda (nuts) and Pilus (puffed
snacks).
Similarity, Dua Kelinci is also a famous nut snack brand in Indonesia with the objective to bring healthy
snacks for customers. Cheetos is a savory crunches snack produced by Indofood that is made from
cornflour and gives you a flavorful rich taste. Moreover, according to the development of e-commerce,
besides traditional distribution, these brands also have stores in popular ecommerce platforms in
Indonesia which are Tokopedia, Shopee,...
- Foreign Competitors
In the savory market, there are many attractive products from foreign competitors, especially from
MNCs companies like Pepsico, Mondelez, Jack 'n' Jill (JG Summit Holdings Inc). These competitors
contribute the large value in the growth trend of savory snacks from 2018 - 2021. However, their ranking
is much lower than the domestic brand name.
https://ec.europa.eu/chafea/agri/sites/default/files/handbook-indonesia-2018_en.pdf
b. Threat of new entrants is Low
- Threat of new entrants is Low. Indonesia has a restricted number of institutions or companies
capable of giving certificates related to processed foods, hence the authority must be granted
by the Indonesian government.
- For example: the success of the new entrance - tortilla chips, the new product and players that
entered the savory market brings benefits for their development.
c. Threat of Substitute is Medium
- Besides the competitors, most Indonesians are Muslims, some companies see halal certification
as particularly crucial.
d. Bargaining Power of Buyer is Medium
While almost all famous companies join in the Indonesia snack market as MNCs, buyers can bring a
higher pressure on medium and small enterprises to produce products with high qualification and
cheaper price.
e. Bargaining Power of Supplier is Low
- Variety agriculture products
- Human resources can be considered as suppliers
https://brightindonesia.net/2022/08/11/the-opportunities-of-the-indonesian-snack-industry/
https://snapcart.global/indonesians-and-their-snacking-habits/
IV. CSA (Anh)
Factor condition:
- The infrastructure includes the physical as well as the technological network that has allowed
The Food and Beverage Industry to successfully complete and carry out operations.
- In some case, lacking of workerrs due to the very low wage.
- Limited market knowledge on strategy responsiveness and mkt research
- Most of the business have its ownership on infrastructure.
Supporting and related industry
- The suppliers needs development on sustainable resource management implementation
- There is low of technology development in Indonesia
- There is high cost on and hard accessibility manufacturing assets management
- There is stainable and easy access to distribution supporting industries
- There is increasing of media exposure to F&B
Firm Strategy, Structure, and Rivalry
- Low competition level within domesticbrivalry
- There are also international brands that penetrated domestic marker
- Low level of innovation
Demand Condition
- The business-to-consumer segment shows prominent growth
- Increasing interest and understanding of healthy and qualified products among market
- There are growth among home demand market
- Low internationalization of Indonesian market
Government
- Developing unsustainable program for limited impact to business
- High interest in developing the industry
Chances:
- Growing middle-economic class in Indonesia
- Women are willing to spend more than men, especially healthy snack.
https://www.essay48.com/case/40656-The-Food-and-Beverage-Industry-Porters-Diamond-Model
V. FSA (Nhi)
Advantages that are specific to Graze savory snacks brand:
- UK’s leading healthy snacking brand and be acquired by Unilever. This is sustainable and can be
transferred because Indonesians are familiar with Unilever or have already heard about the Graze brand
from well known international influencers or friends living abroad.
- Superior technology systems: DARWIN (Decision Algorithm Rating What Ingredient is Next), which
allows consumers to rate the snacks and get them according to their specific preferences. This is
sustainable and can not be transferable as this is a competitive advantage of Graze.
- Strong Network Marketing strategy is successful in the US and U.K. This is not sustainable because
it needs to adapt with the constant changing of consumer taste. But it can be transferable in Indonesia
because these have some cultural similarities.
- Every snack has a nutritionist-approved badge. This is transferable as all products from Graze are
qualified to the world standard.
- Convenient to take to work because it is delivered directly to consumers in a box that contains
individual packages. This is sustainable and transferable because of its convenience.
- “Fail fast” approach using super-fast innovation methodology to create completely new snacks in less
than 48 hours. This is sustainable and can not be transferable as this is a competitive advantage of Graze.
- Monitors stock levels and tracks the location of workers on the factory floor. This is sustainable and
transferable because this is successful management.
→ GIVE CONCLUSION
