Discuss about the Strategic Anayses for Bellamy.
Bellamy is an organic food manufacturer based in Australia. It was started way back in 2004 by Tasmanian family. The main focus of the company is to provide organic alternatives as well as formula products for young children. The organic food they produced are certified and are made from the raw materials obtained locally. The primary market for the range of products that the company produces is the Australian local market, where the company sales their products to the retailers for distribution to customers. Apart from the local market, Bellamy also, sales its products to the Asian countries such as China and South East Asia through distributors as well as the online sale through their portal (Bellamy’s Resource Centre, n.d.). The company believes in providing natural organic food, which is cultivated by ensuring that there is no utilization of artificial manures, pesticides, added substances, and growth and development controllers. Organic nourishment is more advantageous than traditional food and in this way is, the most favoured food nutrients for toddlers and young children with age below five years.
Bellamy organic food limited is the ‘food bowl’ of the Australian as well as Asian market in general. There are several factors that affect their operations and subsequently their success. The macro environment can be better analyzed utilizing the PESTEL analysis. These include external factors that directly or indirectly affect the business operations of Bellamy. The factors are not within the control of the firm. They include political, economic, technological, social, legal and environmental factors.
The factors give a reflection on the governmental influence on the business operation of the firm. The organic food manufactured by Bellamy are directly affected by the Australian government regulations on organic food. This acts as an opportunity to the company as it gives room for them to improve their standards on proper labelling of their products. Bellamy also benefits from the free trade agreements especially with new local locations apart from the overseas markets. This acts as an opportunity which aids the firm in expanding its operations regarding size and customers. The local trade agreements seek to create a market for the local organic food which is certified and banded as safe for consumption. The government will have advertised on their behalf or created easy penetration and entry into new markets.
The high labour standards in Australia is a threat to the company since the company will have to utilize more capital on employing the qualified staff to work on various production sections. This high cost of labour will be reflected on the cost of the end products which will likely be high. Expensive products will mean less turnover because few consumers will afford the firm’s products (Robins, 2015). On the other hand, the labour standards assure the local market on fair employment and labour opportunities which are an opportunity to Bellamy to get qualified staff.
Due to the presence of economic stability in Australia, Bellamy has an opportunity to grow steadily, and satisfy the demands of the local population. The high employment rates in Australia acts as another opportunity to the company. The operations of the firm will flow steadily due to the constant availability of labour. On the other side, the high cost of labour is a threat to the company. The firm will be forced to increase the prices of organic food in their stores to meet the costs of paying the labour, and also remain with significant profits for the company. Bellamy has to develop well-structured strategies to ensure that this threat is neutralized and retain their market share regarding competitive prices of their end products.
These factors define the social characteristics that directly or indirectly influence Bellamy’s employees, investors and their customers. The ever increasing emphasis on the need to stay on a healthy lifestyle is an opportunity to the Bellamy organic food industry. Their ingredients are of high quality, and also, the fact that their products are certified gives the customers peace of mind. Most of the consumers will likely become potential customers for the company due to their need to satisfy their healthy lifestyle class (Aertsens, Verbeke, Mondelaers and Van Huylenbroeck, 2009). Another social opportunity for Bellamy is the ever increasing social diversity in Australia. There are a lot of immigrants in the recent years due to the country’s economic, social and political stability. This cultural diversity is a potential market for the company. The product mix provided by the firm serves the culturally diverse market. The only social threat to the company is the wealth gap, which has been increasing over the recent years. The middle class becomes weak such that, their ability to purchase Bellamy’s products will decrease. Since middle class are the major consumers of the products, the company will likely lose a lot of revenues.
It includes the effects of technology as well as the changes in technology. Bellamy has embraced automation technology in their line of production. Automation increases efficiency in business operation which leads to high production using reduced input costs. This will result in cheap products. Also, Bellamy has mobile and internet technology to market and sell their products. They have a fully operational website (https://www.bellamysorganic.com.au/) which contains all the information about the company, and the products they are producing. Through their portal, the customers can access the information on the various available products and procedures on how to use the individual product (Bellamy’s Organic, n.d.). This is an opportunity to the company since it provides a platform where the firm can reach to a maximum number of potential customers possible.
These are the conditions of the natural environment, which have the capacity to influence the firm directly or indirectly. Changes in climatic conditions for example, is a threat to Bellamy organic industry since the supply of their raw materials directly from the farmers will be affected (Seymour and Ridley, 2005). The productivity will likely decrease. Bellamy can increase their performance in the waste disposal management section. This will boost their sustainability in the market.
It includes the effects of various laws on the business operation. Bellamy has always been adhering to the environmental protection laws and policies. This has greatly boosted their brand image, and thus an opportunity to the firm. There are also, rules and policies that seek to control the production of commercial baby foods (Neales, 2016). These rules may favour or cause a negative effect to Bellamy organic.
The macro environment has a greater impact on Bellamy organic industry operation. The growth of the firm largely depends on the external factors rather than internal factors. Unfavorable external factors may lead to the collapse of the business operation if they are now well analyzed to ensure harmonious interrelationship with the internal operations. The company needs to ensure that their internal operations are always in harmony despite the fluctuations or challenges in the caused by the external environment. Bellamy should always utilize the available opportunities, capitalize on their strengths and minimize their weaknesses through all means possible.
In this analysis, the 5-forces analysis developed by Michael Porter developed will be used to assess the firm’s competitiveness in the market and subsequently generate the strategies accordingly. Through the analysis of five forces, the company can easily determine the profit margins they should expect in a competitive market.
This model helps the firm in the analysis the intensity of competition available within their line of operation. The model cuts across all the industries and markets regarding its effects. These forces will also, determine the length of stay of the company or firm in the competitive market as well as the general growth and profits of the firm (Lombardo, 2017).
If the suppliers have a strong power to bargain, then they will manage to sell the firm’s products at relatively high prices leading to high profits. Also, their high bargaining power may lead to the supply of low-quality inputs into the firm which will result in subsequent low-quality products from the firm. Bellamy has always managed to balance the bargaining powers of their suppliers such that their impacts are minimal and does not affect the firm negatively. Bellamy has a wide range of sources of raw material, and all are from within the local markets. This has greatly reduced the bargaining power of the suppliers. Bellamy is always holding the competitive advantage regarding obtaining the raw material and selling their end products to the consumers. The firm has a good relationship with their suppliers, either for the raw materials or their final products. This has led to increased profits, as well as enabling the firm to thrive in the industry for long despite the competition from their rivals.
Bellamy faces a lot of competition from other organic food industries especially from China and other Asian countries. The only advantage to the firm is their brand image due to their quality and purely organic products. Their products are certified and known to cause no alarming impacts on the infants, who are the main consumers of their products. This has enabled Bellamy to gain a large market share in the organic food industry despite the increasing number of competitors. The rivalry is not that intense because the consumers’ loyalty to the firm’s organic food is high, the exit barriers are low for any firm moving out, and the competitors are not strong. The Bellamy’s online marketing and selling are boosting their turnover of the infant organic food material because of comfort and simplicity of operation. Additionally, expanded web and smart phone accessibility in the rising nations of Asia Pacific has increased the development. Physical shops hold the biggest offer in the market of the infant organic food stuff. Local raw materials are normally sold in grocery stores, as clients lean toward a material experience before purchasing an item. In this manner, clients can guarantee the freshness and nature of the item being purchased. These are some of the competitive advantages that Bellamy has over their rivals in the industry.
If the customers possess a high power to bargain, then they have the capacity to demand either the prices of the products to be reduced or the quality of the products be increased to meet their expectations. If this holds, then the low price of the commodities will result in high turnover but low profits to the firm. On the other hand, the demand for increased quality of products calls for high costs of inputs, therefore, increasing the costs of production.
In this scenario, Bellamy customers have an average bargaining power. The number of customers buying the firm’s products is high in number due to the reputation and brand image of the firm. Their products also are of high quality. Hence, the customers have minimal capacity to demand lower prices for the commodities (Lombardo, 2017). The substitutes of organic food for infants are available, but those substitutes are incomparable with those delivered by Bellamy.
This force determines the ease of entry into the industry. Barriers such as government regulations and capital will determine the entry of new firms into the same line of productions. If the industry is seen to be more profitable, then there will be possible inflows of many entrants into the same line of production.
Producing quality infant organic food requires a lot of capital and major investments regarding labour and other costs. Therefore, new entrants, in this case, are limited due to the competitive nature of the existing companies. Bellamy produces high-quality organic food for its consumers. Most of the population trust the company since it has served for a longer period with no major complaints. This makes hard for new entrants to get into such market since they will be forced to resort to measures such as lowering the prices of their products will significantly affect their turnover.
Government regulations regarding standards required to operate such a business will likely to reduce the threat of new entrants into the organic food industry. Customer loyalty to the existing brands is also another factor that the new entrants are facing. When it comes to commodities such as food stuff, especially for infants and young babies, most of the people are too much sensitive. Most of them are forced to be loyal to the existing brands. People trust experience and value those products that have been proven beyond doubt that they are fit for their consumption.
It is always a greater threat when the existing customers find new alternatives or substitutes of the products that the firm has been selling. If the substitute serves the same purpose, and the prices are relatively low, then the customers are likely to shift into that product causing a serious threat.
Most of Bellamy’s customers are unlikely to switch into other available substitutes due to the good services offered by the firm. The products are competitively priced, and at the same time, their products are of greater quality. This makes most of their customers to remain loyal to the firm’s product (Padel and Foster, 2005). The company has also taken advantage of technology and has gained a lot of customers across the country and Asian countries at large. They advertise, sell, and offer an appropriate guidance on how to use their products.
Basing on the analysis, Bellamy has a greater chance of growing and expanding their market share due to the brand image and quality services they offer. They have all the advantages over their competitors. They are always goal oriented, and ahead of the rest in new developments. Their products meet all the required standards and thus are considered safe. They use no preservatives in manufacturing their products, hence their products have shorter shelf-life, but with a greater advantage on the other side.
The VRIO analysis enables one to analyze the resources of the company and evaluate their competitive advantage.
Value
This is a question regarding the available resources of an organization, as to whether the can fully provide sufficient poser to the company to outdo the forces of their competitors. The available resources and capabilities of the company should be able to neutralize any threat, especially the external threats, to enable the firm gain maximum profits possible.
Bellamy organic food for infants is of greater value, and most of the consumers prefer. The firm uses quality ingredients in manufacturing their various range of products. The certified raw materials as well as the safe output products places the company’s products at a higher position of gaining higher turnover. They ensure that there are no preservatives included, which makes the products have a shorter shelf-life, but a greater customer attraction. These products give Bellamy a higher competitive advantage over their competitors’ products in the market. The products empower the firm to use the available resources to produce more to meet the demands of its clients.
Rare
This issue of rarity refers to a scenario where the availability of the products or the raw materials that the firm uses are limited to only few competing companies. The resources that have been classified as of highest value among several products, and are rare will enable the firm to gain competitive advantage over their rivals in the industry (Cardeal and Antonio, 2012).
The raw materials used by Bellamy are available but the procedure of handling them, all through to the manufacturing process is unique. This makes their products special and admirable to most of the consumers. The greatest advantage that the firm is that, their process of manufacturing their organic food is capital intensive. In this case, the company enjoys this advantage through the production of quality products which has high market acceptance. Were it not for the unique process, the company could be facing more challenges due to the competitive industry where the products are not rare, making it available to most of the firms in the same line of business.
Expensive to imitate or Copy
The products produced by any firm should involve high technicality when it comes to the question of how easy can we produce a similar product. There will be a greater competitive advantage for the firm if their resources are difficult to be copied (Lin, Tsai, Wu and Kiang, 2012). The input resources should be rare and coupled with high value in order to give the firm a lasting competitive advantage, where they can enjoy massive profits for a longer period.
The Bellamy’s products are hard to imitate due to the patent rights, and also they utilize natural means in their manufacturing process. The products are always with no additives or preservatives.
Organization
This seeks to evaluate to extend is the firm organized in terms of obtaining the necessary resources, and utilizing their strengths to maximize profits in the competitive market. The firm should have a better management that organizes the available valuable and rare resources to ensure maximum exploitation and utilization (Falkenberg and Brunsæl, 2011). The maximum exploitation of the available resources will give the firm a higher competitive advantage over the rest of the firms. Bellamy’s organization has always been one of the best in the organic food industry. Their success is as a result of good and qualified management who provides better organization of resources.
References
Aertsens, J., Verbeke, W., Mondelaers, K. and Van Huylenbroeck, G., (2009). Personal determinants of organic food consumption: a review. British Food Journal, 111(10), pp.1140-1167.
Bellamy’s Resource Centre. (n.d.). Organic food: what’s driving Australian consumer habits? – Bellamy’s Organic. [Online] Available at: https://www.bellamysorganic.com.au/blog/organic-food-whats-driving-australian-consumer-habits/ [Accessed 17 Aug. 2017].
Bellamy’s Organic. (n.d.). Home. [Online] Available at: https://www.bellamysorganic.com.au/ [Accessed 17 Aug. 2017].
Cardeal, N. and Antonio, N.S., (2012). Valuable, rare, inimitable resources and organization (VRIO) resources or valuable, rare, inimitable resources (VRI) capabilities: What leads to competitive advantage?.
Chang, H.S. and Zepeda, L., (2005). Consumer perceptions and demand for organic food in Australia: Focus group discussions. Renewable Agriculture and Food Systems, 20(3), pp.155-167.
Falkenberg, J. and Brunsæl, P., (2011). Corporate social responsibility: a strategic advantage or a strategic necessity?. Journal of Business Ethics, 99(1), pp.9-16.
Lin, C., Tsai, H.L., Wu, Y.J. and Kiang, M., (2012). A fuzzy quantitative VRIO-based framework for evaluating organizational activities. Management Decision, 50(8), pp.1396-1411.
Lombardo, J. (2017). Whole Foods Market Five Forces Analysis (Porter’s Model) – Panmore Institute. [online] Panmore Institute. Available at: https://panmore.com/whole-foods-market-five-forces-analysis-porters-model [Accessed 17 Aug. 2017].
Meredith Butcher, L., Rose Chester, M., Michelle Aberle, L., Jo-Ann Bobongie, V., Davies, C., Louise Godrich, S., Alan Keith Milligan, R., Tartaglia, J., Maree Thorne, L. and Begley, A., 2014. Foodbank of Western Australia’s healthy food for all. British Food Journal, 116(9), pp.1490-1505.
Neales, S. (2016). China’s changes a bad formula. [online] Theaustralian.com.au. Available at: https://www.theaustralian.com.au/national-affairs/foreign-affairs/chinas-crackdown-on-foreigners-a-bad-formula-for-bellamys/news-story/654c955c6e7f430cd89995a5bd44fa2a [Accessed 17 Aug. 2017].
Niggli, U., Earley, J. and Ogorzalek, K., (2007). Organic agriculture and the environmental stability of food supply.
Padel, S. and Foster, C., (2005). Exploring the gap between attitudes and behaviour: Understanding why consumers buy or do not buy organic food. British food journal, 107(8), pp.606-625.
Page, K.L., Dalal, R.C., Pringle, M.J., Bell, M., Dang, Y.P., Radford, B. and Bailey, K., (2014). Organic carbon stocks in cropping soils of Queensland, Australia, as affected by tillage management, climate, and soil characteristics. Soil Research, 51(8), pp.596-607.
Robins, B. (2015). Bellamy’s woes self-inflicted, say rivals. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/bellamys-keeps-hanging-in-the-balance-as-it-negotiates-with-suppliers-20161219-gte4ot.html [Accessed 19 Aug. 2017].
Seymour, E.J. and Ridley, A.M., 2005. Toward environmental management systems in Australian agriculture to achieve better environmental outcomes at the catchment scale. Environmental Management, 35(3), pp.311-329.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download