Incomplete KEY MANAGEMENT ISSUES Shimla Dairy is not among the current leading players in the market. The market leader's (Britannia) production capacity per day is almost 50 times that of Simla Dairy. With nearly 29 varieties of products, Shimla is now trying to increase the product line further. The company currently has 2 plants one at Shimla and the other at Kiarighat with a total capacity of 10000 litres of milk processing. With the Cheese industry slanting towards the growth phase, there is expected to be high increase in the competition, both from the domestic and the foreign players. This gives rise to number issues which concern the management. Which are as stated below: Currently, the company lacks of focus as it has a diverse product line with too many varieties of cheese products. With so many products it cannot be sure to decide as to which market segment to target in order to take the advantage of the growing market. The current Production Capacity is Low to face the upcoming competition-The dairy currently produces 10000 liters of milk per day even after 30 years of presence in the market. This will certainly affect the chances to take advantage of the current growing market and to manage the consumption cycles of the industry. The question of whether to decide on the expansion of production capacity: With an incredible growth expected in the industry, the issue that the management faces now is, whether to increase the production capacity or not. This is very much needed as the expansion of production capacity will equip the company to supply and cater to the demand as well as attain economies of scale, which can be used as a competitive advantage against the new entrants. However, this calls for capital investments on the assets required for expansion. Another key issue here is to decide which market segments to target and enter into as Shimla Diary should now needs to focus its efforts on certain market segments and cater to their needs based on the level of profitability and attractiveness that segment offers. Another issue which needs to be addressed is to Build the Brand Equity of the company: The company is very small and not figure among the top players in the industry. It had never invested on any marketing expenditure to promote itself and just relied on word of mouth. The company had published some flyers and a brochure recently and also started providing refrigerators with the name Shimla Dairy highlighted to stores which most of the big players were practicing it ever since.
Nevertheless, it must “defend” its current market share if not increase it, by maintaining premium quality and develop innovative products. The marketing mix strategies will effectively achieve targeted revenue and profitability in the near future.
Ice-Fili is a traditional Russian manufactured who has been the market leader in the Russian ice-cream industry but over the years the supremacy and competitive edge has been declining. Due to its traditional competency it has a lot of capacity, much of which is lying unutilized. Out of its capacity of 200 tons/day, it is utilizing only about 25% (with an annual production 16000 tons, assuming 300 working days).
The Specialty Cheese Company is a dynamic, small company that has thought about its future. The company has been around since 1839. It has survived when there were over 4000 cheese companies, The Great Depression and over 150 years of leadership. With less than 150 cheese companies in the United States, the Specialty Cheese Company has three United States Department of Agriculture approved functioning companies.
Food industry can be chartered by low margin industry, while along with the shift of power from the manufacturer to the purchaser, the price and demand became flexible, and the product variety increased.
Saroj (2001) supports the fact now a days factors that cause change to occur are unpredictable, Bega Cheese however appears to be in a continual state of change. Change is driven by forces which make a firm unique to able to achieve strategic goal of company. These forces can either be internal of external. External forces that have driven Bega Cheese to prompt change include social and political pressure is another force due to customers, suppliers’ needs wants to be unsteady, fore which, managers at Bega Cheese implement participative leadership (Rawat 2001). As Bega Cheese export cheese worldwide, therefore, many social and political concerns arises, however, Bega Cheese has valued and acknowledged high quality to be exported through applying legal conformity such as Halal accredited to Middle East countries. Moreover, it has gained competitive advantage to establish high value of its customers and employees as well as superior profits for itself (Micheal 1998).
Caroline and Jennifer said that ‘Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or set of buyers which would then become targets for the company’s marketing plans.’ (Tynan and Drayton, 1987) There are many ways to segment the market, such as age, region, environment, psychology and wages (Hall, Jones and Raffo, 2010).
...he market and lack of an all-round business plan covering all aspects. For the company’s discussed it will be very easy to achieve the goals and be one of the successful company’s in the country and global wise.
Fonterra will always prioritizes New Zealand milk so they need to maintain the active and dynamic business going. To be more efficient, there have been projects mobilizing out to make improvements to the company’s assets in New Land i.e. supply chain and manufacturing plants.
This will not only maximize the company’s operational expenses by concentrating only to a particular segment of the age bracket of consumers by providing them product lines that will suite their taste and demands it will also allow the company to set the trend as to what is the next big exciting thing this season. In this case, the company’s resources will be used properly and is expected to increase its market share continuously leaving the competitors far behind. (Starbucks,
With the rise of the economy, consumers have become more and more knowledgeable on selecting their favourable product as a result the organization cannot focus on what it sells but on the side focus on what the customer wants to buy.
Finally, I have suggested some recommendations for the issues that I have mentioned above. In reference to the first issue, it will be profitable for the company to change to level monthly production.
The packaged milk category was originated in 1981 by (quaintly named) Milk Pak, which pioneered tetra pack milk in Pakistan. The supply chain involved collecting milk from rural areas across Punjab, processing the milk through UHT (Ultra-High Temperature Processing) treatment, and selling it to consumers in uniquely colored triangular and rectangular packs designed to prolong the milk’s quality. Milk Pak’s “Milk Packs” were very well-received and the brand soon became synonymous with quality milk. Its first real competition came in the form of Haleeb, which introduced distinctively blue tetra packs to the market in 1986.
After looking at trends in the market and seeing that consumers are becoming more health conscious and the need for food that is easy to prepare it was decide that this product would do well in a consumer market made up of mid and upper mid income families and individuals.
There are many elements affecting to the success of a launching. The basic factor is to develop product that satisfies consumers’ demands and maintain the brand promise. However, consumers are not only looking for the quality of product but also concerning about the price, the promotion and so on.
...leader in its selected markets through creativity and superior customer service. The Group is continuing to focus many efforts to expand its presence in global food and ingredients markets and its consumer foods businesses in Europe and abroad.