Executive Summary Rob Pincombe, purchasing manager at unifine Richardson is responsible for procurement of honey from its suppliers. Unifine purchases one million pounds of honey annually with at 50:50 blend of Chinese and Canadian honey which costs him $1.08 per pound. Unifine, apart from in-house usage of honey, sells 80% of its honey to one large franchise and his customers demand product consistency. With Chinese supply blocked, which is a major supplier of honey to world meeting 20% of honey demand, honey suppliers can demand a high price. Unifine’s purchasing from a single source in the past, exposed its buying strategy to unforeseen risks from sudden fall in market supply, and also proves that Unifine Richardson is no more sustainable than its supply chain. With fall in demand, Unifine is not in a position to bargain price. Its main concern at this time is to ensure uninterrupted supply so that its supply chain is not disrupted. Pincombe should decide to lock a price for Canadian honey to ensure smooth supply as a short term strategy. Long term strategy should include having diverse supplier base and backward integration, buying raw honey from local buyers and pasteurizing to ensure honey availability if this project meets ROI.
Analysis and evaluation: Applying Porter’s five forces analysis for honey market it appears that buyers don’t have much influence on honey market. As honey supply has reduced by 20% in world market, suppliers are at upper hand and control market price. Honey market is influenced by government regulations and controls and CFIA can block supply of honey from any country if it does not meet quality standards put forth by it. So Unifine is at the mercy of honey suppliers for meeting its supply chain demand. Exhibit 1 (Honey Prices) and Exhibit 2 (International Honey Production) also justify suppliers bargaining power in honey’s