Introduction
Grupo Bimbo founded in 1945, is the largest Mexican owned baking and confectionary company which manufactures over 10,000 products under 100 different brands. Some of their biggest confectionary brands are Barcel, Mrs. Baird's, Entenmann's, and Pullman whose products include chocolate bars, hard candies, gummies, licorice, and many more. Their headquarters are located in Mexico City, but they operate on a global scale with their biggest markets being the Americas, Asia and Europe. Grupo Bimbo employs over 125,000 people across 19 different countries. View Appendix B for a SWOT analysis to get quick view of the company's current standing.
VRI
V- Do resources and capabilities meet a market demand? Do they enable a firm to exploit an external opportunity or neutralize an external threat? Grupo Bimbo definitely has the resources and capabilities to meet market demands hands down. This can be seen with through their numerous brands, products, factories and employees. What they don't have is a solid brand image and brand recognition that will carry its sales like Mars, Hershey and the other major players have.
R- Are they rare? Are they controlled by only a small number of competing firms? I would say that confectionary companies are not rare because there are so many big players already (Hershey, Nestle, Mars, Mondelez). With that being said, it doesn't mean that Grupo Bimbo should just shut down, just means they definitely need to be able to come up with good strategy and be able to execute well enough.
I- Is it difficult for competitors to successfully imitate or substitute? Do firms without the resource/capability face a cost disadvantage in obtaining or developing it? In the confectionary industry there are an...
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A Second Look at Company Performance
Grupo Bimbo is quietly creeping up the food chain in the confectionary industry. They are building a solid international market foundation through acquisitions and mergers which is only going to get bigger. Acquisitions and penetrating international markets is an expensive operation to execute, thus some of the financial debt they are facing which could have greatly impacted their performance. At the end of the day it is a very necessary investment which will broaden their horizon. After looking at the strategies with a closer eye the firm's performance is most definitely only going to get better. They are going to intensify their expansion goals through more acquisitions which will increase their competiveness and profit margins. Grupo Bimbo is most definitely a company that you will be hearing a lot more from in the future.
Senior Management of PepsiCo is evaluating the potential acquisition of two companies – Carts of Colorado and California Pizza Kitchen – in order to expand the company’s restaurant business. If indeed PepsiCo decides to pursue the acquisition of one or both, they must decide how to align each of these business units in its historically decentralized management approach and how to forge relationships between the acquired business units and existing business units. In their evaluation, Senior Management is faced with the question of whether the necessary capital investment in order to purchase one or both of the businesses can be profitable for each of the acquired business units, but must also take into consideration that the additional business units will not hinder the profitability of the existing business units.
I did some research on the Altria Group, Inc. and found that they are using a growth strategy known as conglomerate diversification. What this means is that the industry they are currently in is unrelated to the industry they have entered, through diversification. With this strategy, managers are more concerned with financial concerns such as cash flows. This is usually due to a company's current industry achieving maximum growth and has to enter into other industries to gain more opportunities for future growth. Altria is a parenting company who parents Kraft Foods, Philip Morris International, Philip Morris USA, and Philip Morris Capital Corporation (Altria, 2008). What products they produce are tobacco, packaged food, beverages, and financial services. The USA and Europe are their primary producers.
Competition is strong and dynamic in most markets. So it is essential for a firm to keep developing new products-as well as modifying its current products-to meet changing customers needs and competitors’ actions (Perreault, 281). Taco Bell continually is experimenting with new food product lines.
• Discussing the two forces of competition, which are threat of new entrants and threat of substitutes, and identifying the most significant of those forces for McDonald’s Corporation.
Hershey’s takes advantage of many different types of advertising. Television commercials and ads are very common. Sponsorships is also another very common way Hershey advertises. Hershey sponsors everything from ice skating shows, to racecars. The Hershey Food Corporation is very competitive so they need this type of advertising. However, the only other major corporation to compete with is Mars. The chocolate industry is diffidently not pure competition. Mars and Hershey’s form an oligopoly. Hershey’s has so many different kind of products that they have a lot of competition. The company has branched out to where they’re not only competing against other chocolates but also for fruit candies, and baking chocolate and chocolate drinks as well. The fact that so many products are offered, extends the corporation to different divisions. Mexico and Canada have manufacturing plants. Seventeen manufacturing plants include Hershey, Pa (Hershey plant, Reese plant, West Hershey plant0, Hazleton, PA, Lancaster, PA, Memphis, Tenn., Naugatuck, Conn., New Brunswick, NJ, Oakedale, CA, Palmyra, PA, Reading, PA, Robinson, Ill., Stuarts Draft, VA, Wheatridge, CO, Dartmouth, Nova Scotia, Montreal, Quebec, Smiths Falls, Ontario, and Guadalajara, Mexico.
The four companies shown above have very different business models. Inditex owned much of the production and most of its stores. Inditex is thus a vertically integrated company. This made Inditex gain a competitive advantage, which is quick response to the market requirements. On the other hand, The Gap and H&M have a different business model. They owned most of the stores, but outsourced all the production. Benetton had a third business model. It invested heavily in the production, but licensees ran its stores.
Resources are being classified into tangible and intangibles assets as the followings: *Resources of *Virgin Group Tangible Resources Intangible Resources Capabilities of Virgin Group are established by the integrated resources that assisted it to stay competitive and to outdo its competitors. Valuable capabilities will aid Virgin Group to effectively tap and explore spotted opportunities as well as to minimize threats in the external environment. Should capabilities are consistently and effectively utilized, they will turn significant and be difficult to be imitated or substituted. With the resources discussed above, 3 capabilities of Virgin Group are identified as follows: - *Capabilities 1: Unique C*ulture of *"Making difference and creating uniqueness"* (*Contributed Resources: *Financial, Organizational, Human, Innovation*, Technological*) Creativity, Innovation are the foundations to Virgin and Richard Branson’s success! Technology push is the spine for innovation and likely to simulate process innovation in how service is provided when looking into Virgin. Technology is more likely to simulate process innovation. Every turn and businesses Branson venture has been with some kind of innovation or creativity element if not something unique, something that has not been seen or heard of before in the relevant market. Virgin Group has achieved a competitive advantage among its competitors by uniformly followed its culture in all business in serving good value and service to the customers in different ways. The basic and the core competence of all Virgin Group's business ventures are to do things just a little bit differently from the rest. And also they always tried to add value by adding a little fun to the business. By differentiating in strategy itself to fit of the activities and the ways of doing business have also differentiated itself from the rivals and make it difficult to imitate Virgin’s strategy. Hence, they have established their business to an untouchable position. How would you characterize the corporate strategy of Branson's Virgin Group? The answer to that question will not be so different from the ones above. However to better understanding we can characterize the corporate strategy of Virgin Group as "Making difference and creating uniqueness" in any kind of customers' service. They are not stuck to any business field so that makes them flexible of thinking and creating new ideas for their customers and the whole consumers around the world who need (or will need) Virgin's service.
Frito-Lay controlled 40% of the USA-market assuring high volume production by increasing internal coordination with PepsiCo developing the Power of One strategy consisting in mixing snacks with beverages and sauces produced by Peps...
I have selected Mc Donald’s as an organization on which I would be making this report. I would be discussing Mc Donald’s competitive advantages over other organizations by applying a Resource based view of strategy. This report would highlight the resources and capabilities Mc Donald’s has and how can it utilize those resources to gain competitive advantage over its rivals.
Its market is ruled by four powerful brands: The Hershey Company, Mars, Incorporated, Nestle S.A., and Russel Stover Candies Inc. They control the 85% of the total confectionery market, being The Herhsey Company the most important of this sector with a share of 40.2% of the market´s value; Mars Inc. with 30,7%; Nestle with 9.3%, and Russel Stover Candies with
has grown into a $49.7 billion corporation by clearly focusing on the goal of enabling commerce around the globe.
It is one of the largest hypermarket chains in the world, the second largest retail group in the world in terms of revenue, and the third in profit.
The company’s name got changed in 1968 to Hershey Food Corporation and it expanded its operations with different product lines, in addition to this, the company acquired other companies that manufactured similar products. The company is currently the leader in production of both non-chocolate and chocolate confectionery products all over North America. The company’s products are known and enjoyed in several countries around the world; the company is still committed to its vision and values and it continues to produce new products.
Question 1: Critically analyze the growth strategy adopted by the Aditya Birla Group. What are your views on the business portfolio adopted by the group? (7 marks)
This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).