In this report a detailed analysis is made to identify the business model of Angus dairy along with discussion of their value proposition for their internal and external stakeholders. This analysis is based on theory to demonstrate better understanding on primary aspects of value proposition.
According to Michelini and Fiorentino (2012) the business model is a plan that is utilised by firms to generate revenue and gain profits and it illustrates a firms product or services that is manufactured and marketed, expenses incurred and the manner these are done to create profits and attain business goals. The business model is a systematic outline of course of actions undertaken by a firm for profitably running its business operations in identified markets. Like Angus Dairy uses a diverse business model to support overall profit generation for both business and for their farming members community to meet respective goals and interests. Angus Dairy uses different strategic approach within their business model to meet needs of business and members by understanding and delivering value propositions. A value proposition is an outline of products or services and the added benefits that are met through a firm’s offering to give value to prospective customers, members, suppliers etc ideally in a manner that distinct the firm from their rivals (Fielt 2013). The core activities of Angus Dairy are processing, manufacturing and selling of dairy products as well as supporting their farmer members in a manner to get highly competitive farming operating gains through milk prices, dividends and reinvestments in their owned co-operatives with help of guidance and advice of Angus Dairy.
Fig: Value delivery model language framework
Source: Research gate (2018)
As opined by Spieth, Schneckenberg and Matzler (2016) to deliver value proposition to farmer members and their owned co-operatives Angus Dairy undertaken close and inclusive human resource strategic directions to develop the farmers and co-operatives business with advanced opportunities for training and development that is offered to members and employees of Angus Dairy. The prime focus of these strategic approaches is to add value to employees and members through training and development programs that undersees best practices specifically for Workplace Health and Safety dimensions across business units of Angus dairy as well as co-operative business units of members. Another objective of these training and development programs of Angus Dairy is to provide individual development session to professional and farmer members to enrich their skills and expertise and add value proposition through better knowledge and learning environment for sustained and continued development both professionally and individually to drive profitability. In the year 2017-18, Angus Dairy reached a revenue generation of 3.2 bn USD through their operations and their profits also continued to rise at 11% annually. 100% of overall profits generated by business units of Angus Dairy during the year 2017-18 were shared among farmer members to support their growth and add value propositions with generation of better and continued profitability and distribution of dividends earned across the business annually.
According to S Carvalho and Jonker (2015) one of the most important aspects of marketing interpretations is to communicate and provide products or services that offer utility to consumers to add value and meet their needs and expectations. Also the best approach to understand markets and marketing is through logic of value proposition which is one of the most suitable and strong alternative to add long term value through viability of product or services offered or through viability of marketing of these offerings to consumers. Many firms have changed their focus from being only product orientation view to alternative approach of creating value addition through services with approach towards value production. Firms have shifted focus to value proposition and experiences of consumers by exhibiting wider and superior knowledge of their products to customers to add value base rather than solely focusing on product as main resources. Based on this product knowledge the idea of firms is to leverage new value adding services tied to products that helps to add more value proposition to consumers. As such firms have evolved by enabling value addition to meet customer expectations and needs.
The goods dominant (G-D) logic as such has changed to service dominant (S-D) logic to add better value proposition with change in focus from products to services. The most vital contrast between S-D and G-D logic theory is based on exchange where G-D logic theory emphasise focus on exchange of operand resources such as goods manufactured while S-D logic theory focuses on actions of operant resources such as exchange of value proposition resources (Olexova and Kubickova 2014). Also in G-D logic theory “value” is identified in exchange while in S-D logic theory “value” is identified in use. This means that in G-D logic theory the idea of economic exchange is to develop and distribute goods to be sold and value is integrated into the product that is manufactured by the firm during its manufacturing process and the value of product is signified by market prices or the rate that consumers are willing to pay. As such according to Mele, Colurcio and Russo-Spena (2014) from G-D logic theory maximum effectiveness and profit is generated with standardization and economy of scale. In G-D logic theory there is difference between manufacturer and consumer and their value systems and value is developed in step by step within a linear manner.
Contrary to this in S-D logic theory all exchanges are based on service where value is delivered through intangible benefits or characteristics that are involved with product or service operations and after sales delivery or application of resources to offer value proposition to consumers. In S-D logic theory primary resource for competitive edge is knowledge and expertise and the theory indicates that value is at all times co-created with consumers (Karpen, Bove, Lukas and Zyphur (2015) in S-D logic theory the value is added through beneficial usage of operant resources which are occasionally offered through operand resources or products. Hence from S-D logic theory the value proposition is co-created through mutual contributions of firms, employees, customers, stakeholders, government and other entities associated to any given exchange but is invariably decided by the receiver or customer.
Hence through the context of S-D logic theory of value proposition being applied to Angus Dairy it can be analysed that Angus Dairy promotes value proposition through their organisational structure and design by using a unified understanding of their purpose and nature of business to add value to their markets, farmer members as well as employees. Angus Dairy basically meets value proposition with exchange and application of knowledge and skills for the advantage of farmer members through giving them training and advice which is also the foundation proposition of S-D logic theory that states adding benefit to parties like consumers, society or employees in exchange of services (Liu, Ming-Chao, Yi-Hsien Tu and Chu-Ching (2014) in line with S-D logic theory Angus Dairy practices marketing approaches and aspects that is founded on service logic, principle and theory by following service marketing to add value proposition breaking free their focus from solely manufacturing of range of dairy products and marketing them. In accordance with S-D logic theory Angus Dairy embraces a business model that promotes value in use and co-creation of value instead of value in exchange and embedded value concepts. Hence rather than marketing only the dairy products to consumers the focus of Angus Dairy is to promote support to their farmer members and employees in context to knowledge and skills and co-creation of value network so as to help in delivering better service marketing and experiences for customers.
Structure: the structure of Angus Dairy clearly specifies functional distribution of business operations across the firm based on tasks that helps employees clearly understand and relate their tasks with functions and others in the structure. The line of reporting and command are intended for betterment and support employees in delivering the tasks which helps to add value proposition at Angus Dairy with clear improvement intentions and duties of business (Payne and Frow 2014). Also organisational design of Angus Dairy has clear leadership that demonstrates plans on the manner the firm should operate to perform better and their organisational design is focused on all resources and inventory needed for tasks, functions and goals and are developed in a manner through grouping of job portfolio, departments and employees that helps to attain most effectiveness possible across all levels for delivering value proposition to employees and to customers with better understanding of functions and power relationship.
People management: Angus Dairy focuses on employee value proposition (EVP) to improve people management practices as it helps to develop a strong and unique competitive edge and helps to appeal employees by improving their commitments and encouraging minimisation of employee turnover with better distribution of premium and dividends to employees. Angus dairy maintains strong influence over their employees to add value proposition with three direct dimension such as job enrichment where Angus Dairy makes considerable efforts to improve satisfaction of their employees not only through offering pay and benefits but by also giving them open communication and sharing platform where they can self-direct and take decisions related to their tasks to meet performance benchmarks (Grönroos and Gummerus 2014). Also Angus Dairy offer their employees scope for professional development and career growth that is fulfilling and stimulating.
The other dimension is structure where Angus Dairy offers supportive organisational systems, process and resources/infrastructure to employees to make sure that employees have work life flexibility and feel empowered to perform their tasks well as desired. The third dimension is interpersonal which embraces employee’s dealings with management of Angus dairy and immediate teams with help of effective organisational culture and brand that helps to deeply embed and add real value to employees through adequate recognition system, empowerment and work life flexibility (Yuan and Hsu 2017). Also in context to partners i.e. farmer members of Angus Dairy the team of Farm Advisory helps in delivering expertise skills in different aspects of dairying involving pasture and forage production, herd nutrition, reproduction and health, business management and business growth to support aspects of people management of partner networks. The standards and specification and integration of world class technology and systems helps farmer cooperatives in production to add value with more milk production for local and global markets.
Marketing: the marketing, advertising and promotional practices of Angus Dairy for their dairy products within Australia are outsourced and to add value in these dimensions the outsourcing partner undertakes various consumer research on behalf of co-operatives to help in better decision making and informed approaches towards advertising and marketing campaigns that support to meet marketing strategies and product development goals of Angus dairy. Moreover value proposition is added through research and development practices and approaches for Australian and developing markets of Angus Dairy where informed market research is carried out by their advertisement partners and through in-house employees (Jääskeläinen and Laihonen 2013). Also to add value in marketing aspects Angus Dairy also focuses on dairy farming sustainability that helps them work closely in areas other than just milk manufacture, production and profit toward environment and sustainability with approaches targeted for environmental stewardship, animal well being and by making sure that dairy community has a living standard that is in alignment with basics of modern living of society. These approaches helps to add value proposition.
Financial management: Angus dairy works not only in dairy manufacture but also in contract manufacture for reputed brands, retailers and other firms in national and global level which helps them to add value to their financial goals. To support their financial goals and better management the teams of Angus Dairy working closely with their expertise and efficiency in creating targeted products for client specific needs and even responds to the demand from export customers which helps them fulfil financial growth and operating profitability (Brozovic, Nordin and Kindström 2016). Like in year 2017-18 Angus Dairy earned revenues of around 3.2 bn USD with operating profits growth at 11% which helped them attain not only business growth but growth for their stakeholders like employees, partners etc where Angus Dairy paid a strong dividend to their stakeholders to leverage financial stability and management.
However the identified issue in the process and practices of Angus Dairy’s value proposition dimensions is lack of articulated value proposition business archetype goals that would help them add more clarity, consistency of objectives and communication across functions and cross business units and cross product lines to add more capabilities for developing and offering long term business value. According to Johansson, Olsson and Andersson (2017) a detailed business value proposition archetype will help Angus dairy deliver real value by realisation of value enablers and types so that various business dimensions and roles of employees and partners can be leveraged effectively for making investment for better development of practices and operations that can synergise relationship among strategies and business dimensions to support sustained value propositions.
Conclusion
Hence it can be concluded that for delivering value propositions and attain satisfaction level for employees and partners a firm should express their process and practices that adds value offerings either through external value proposition approach such as effective strategy development and management or through internal value proposition by driving initiatives that supports better culture and decisions. A business value proposition archetype can help firm’s to make informed decisions to add better value propositions through recognition of capability gaps, misalignment between value dimensions and distribution mediums so such mapping process helps in sustained delivery of value propositions.
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