Discuss about the Strategic Dimensions as Internal Marketing.
Strategic dimension can be defined as the strategic aspect of an organization, which includes organizational composition, management and values (Krzakiewicz & Cyfert, 2014). The organizational chosen for this study is Bulla dairy. It is a major Australian dairy firm, which manufactures dairy products nationally and also exports the products to international market. The study will assess the strategic dimension of the organization through its generic strategies, organizational culture and organizational structure. The study will describe the generic strategies of the organization through cost leadership, differentiation and focus strategy. The study will also describe the organizational culture and structure of Bulla Dairy. Moreover, at the end of the study, it will demonstrate the consistency of each dimension towards the success of the organization.
Bulla Dairy Foods is the major Australian dairy company, which manufactures dairy product in national basis. However, the organization exports its ranges of dairy product to various international markets. The organization exports frozen and chilled dairy products to various leading markets of Middle Eastern and Asian (Bulla.com.au, 2017). It is highly popular for manufacturing and exporting range of dairy products such as table cream, ice cream, sour cream, cheese, yogurt, imitation cream and cottage under different brands. Thomas Sloan established the organization in 1910 and it subsequently became the partnership among three inter-related families (Bulla.com.au, 2017). Moreover, these inter-related families still own and operate the business of the organization. The organization offers family taste in all of its dairy products through thickening the milk. The organization exports to over 20 countries and has annual retail sales of more than $ 300 million (Moir & McCarthy, 2014). As per the survey of 2014, 20% Australians buy the dairy products of Bulla Dairy from the grocery shop of Australia (Referred to Appendix 1). Moreover, most of the customers between the age of 14-24 majorly buy the ice cream product of Bulla Dairy (Referred to Appendix 2).
The primary determinant of an organization’s profitability is the attractiveness of the industry within which it operates. On the other hand, the secondary determinant of an organization’s profitability is its position within the industry (Rad, & Lewis, 2014). Michel Porter has invented this theory of generic strategy for identifying an organization’s position through leveraging its strength. This theory also suggests the way in which an organization can pursue competitive advantage within the industry. There are three dimension with which an organization can pursue competitive advantage within the industry namely cost leadership, differentiation and focus. The generic strategy of Bulla Dairy has been described in the following for demonstrating its competitive advantage.
An organization can sell its products either at average industry price for gaining increasing profit or below the average industry price for gaining increasing market share. However, this generic strategy suggests for low cost producer within the industry against a minimum given quality. In this extent, Bulla Dairy sells its dairy product below the average industry price towards capturing high market share (Purves et al., 2015). The organization offers their products at highly affordable price towards making them affordable for all types of customers. Through this strategy, the organization can maintain some profitability in the price war of highly competitive market (Elgin-Stuczynski & Batterbury, 2014). The cost leadership strategy of the organization target broad markets of Australia and increasing market share in those markets. The organization has acquired cost advantage through improved process efficiencies and gaining unique access to the raw materials. The organization get wide access to the fresh milk produced in the Colac, which is a provincial town located at Western District of Victoria (Thorley, 2014). Therefore, the organization can produce their dairy products at cheaper cost and sells it to the customers at affordable price.
Differentiation strategy suggests for development of products and services, which offers unique attributes. Customers perceive such products having high value and different from other similar products of other organizations. The value added by the organizations in their products allows them to charge premium price for the products (Santhanam-Martin & Nettle, 2014). Bulla Dairy has wide range of dairy product serving to wide variety of customers. Moreover, the customers can have traditional taste in all the dairy products of this organization. Bulla Dairy also offers varieties of flavors in all their ice creams, which attract the kids group (Scarsbrook & Melland, 2015). Furthermore, the low fat dairy products of the organization have also become high popular among the customers. Such low fat and healthy lifestyle products of this organization are frozen yoghurt and cottage cheese. Therefore, this healthy and low fat dairy products having unique taste have allowed the organization to be competitive in the market.
The focus strategy focuses on narrow segment and within that segment endeavor to attain either cost leadership or differentiation. The premise of this strategy is that an organization can better serve the customers by focusing completely on it. The organization has mostly targeted household group for offering milk products. The traditional taste of the dairy foods attracts most of the people having traditional preferences (Schuck et al., 2016). Moreover, the organization has also targeted health conscious people having healthy dairy foods. However, the organization is limited to operate only within the Australia. The organization does not have international expansion and they only export their dairy products in international countries (Caiazza et al., 2016). In this way, Bulla Dairy has become able to gain high level of customer loyalty. This entrenched loyalty of the organization has discouraged other competitors in competing with this organization directly. Moreover, the organization has targeted all income groups from low to high towards meeting the daily needs of the customers.
The culture of Bulla Dairy of highly based on the ideals that self-motivated people work hard rather than having boss micromanaging every step of the employees. The unique structure of the organization allows it to grow and respond more quickly than its other competitors. Bulla Dairy initially grew fast, as decisions were made at the lowest possible level. The corporate culture of the organization is based on open structure, where low level employees can easily approach to top level managers regarding any organizational issues (Hogan & Coote, 2014). Therefore, any organizational issue is resolved at the initial stage. The organizational leaders are extremely supportive to the employees for helping them in doing any complex job. However, some leaders in manufacturing department and designing department are non-cooperative with the employees’ opinions (O’Reilly et al., 2014). Excellence is emphasized as the critical success factor for the organization especially for production of dairy foods.
The culture of the organization involves strict policy of hiring best employees for the organization. The employees are hired for their knowledge, creativity and skills (Büschgens et al., 2013). The organizational culture of Bulla Dairy highlights creativity in the development of dairy products. This culture helps the organization to develop business process as per the business needs as well as organizational needs. Furthermore, innovation is at the core of organizational culture of Bulla Dairy. All the employees are encouraged and trained enough for demonstrating their innovation in their individual performance areas. They are also allowed to share their innovative ideas in the business development process of the organization. On the other hand, the organizational culture of Bulla Dairy highlights moderate combativeness with the workplace. This shows the combative approach of the leaders. In this approach, leaders of the organization constantly challenge the skills and abilities of the employees towards meeting the organizational standards (Tong et al., 2015). This is positive in the sense that it fosters employee innovation. On the hand, it is negative in the sense that it can discourage some employees, who are slow in demonstrating their innovation. Moreover, the organizational culture of Bulla dairy protects business from unenthusiastic influence of employee poaching and corporate espionage.
This level of organizational culture actually reveals the organizational characteristics, which can be easily viewed, felt and heard by the employees collectively. The employees of Bulla Dairy are highly dedicated in their job role and their level of dedication is apparently reflected on their job performance. Moreover, the dedication level of the employees allows the organization to fulfill their innovative mission effectively. The employees of Bulla Dairy are to wear formal dress in their organization and they are extremely polite in communicating with their superiors (Martinez et al., 2015). Moreover, the management of the organization allows the employees to participate in organizational decision making process. Therefore, the employees are highly responsible towards fulfilling their targets and meeting organizational standards.
The managers of Bulla Dairy are extremely cooperative with the employees in performing any complex job. The concerns of the employees are always taken into consideration while framing any organizational policies and procedures. Moreover, the innovative ideas of the employees are highly appreciated by the upper level managers. On the other hand, the employees of the organization always respect their managers and obey their instruction for the betterment of business development (Hogan & Coote, 2014).
The standard and values of the organization are always aligned with the individual needs of the customers. All the male employees and female employees are given equal rights in the workplace. Moreover, female employees are given extra privileges as per their requirements.
From the above figure, it can be found that Bulla Dairy uses functional organizational structure for operating their business. In this structure, the organization has different functional departments operating individually for the success for the business. The reporting relationships of the organization are grouped based on specialty of each department. The organization is divided into separate groups on the basis of their specialized functional areas such as production department, technical department, human resource department, finance centre and customer service department (Joseph et al., 2016). This organizational structure allowed Bulla Dairy to get enhanced functional efficiencies, as the employees having shared knowledge and skills are group together in each department.
In this structure, board decides the strategies for long term business operation and inspects the interim report for the organization towards maintain those strategies. Moreover, they are the heads of the organization and control the business from long term perspectives. On the other hand, the director control each individual department of the organization namely production department to finance centre and human resource department (Erhemjamts et al., 2013). Most of the decisions of Bulla dairy are taken on the top of the hierarchy. The director is responsible to communicate the decisions of the board to each of the departmental heads. However, the consistency of the communication sometimes hampered due to scattered departments within the organization. The director is responsible for maintaining the consistency of the communication within each department for effective implementation of organizational strategies.
The head of production department is responsible for controlling the activities of the employees from production, QA manager, maintenance employees, purchasing and logistics. The quality manager is responsible for maintaining the health standard in each of the dairy products. On the other hand, the head of production department also control the logistics functions. The employees of logistic department are responsible for distributing fresh milk to the inventory and the finished dairy products to the customers’ end. Moreover, the technical department head is responsible for controlling the activities of product design and research and development team. Furthermore, the head of human resource department is responsible for controlling the hiring and maintenance activities of human capital. Bulla dairy is highly concerned about recruiting extremely knowledgeable people and maintaining them through proper training and development Joseph et al., 2016).
Through Bulla dairy is extremely popular in Australia for its high quality dairy foods, still the organization is only limited within Australia. The organization does not operate on international basis. It only exports its products to international market. Limited expansion is ultimately reducing the potentiality of the organization for earning increasing profit. Therefore, the organization should take initiatives for expanding in international market for increasing organizational profit.
The leaders of Bulla Dairy are supportive enough for assisting the employees in performing complex jobs. However, some leaders in production department are not that much supportive to the employees for aligning their skills to organizational success. These leaders are inclined to demonstrate aggression to the employees, which sometimes demoralize the employees. Therefore, these leaders should be high supportive to the employees and assists them to enhance their skills.
In case of functional organizational structure, the communication among each department sometime gets hampered. It can reduce the capability of the organization towards achieving organizational goals. Therefore, the organization should enhance the consistency of the organizational communication.
Conclusion
While concluding the study, it can be said that Bulla Dairy is extremely popular dairy firm in Australia for its unique taste dairy foods. The success of the organization is tightly integrated with its business strategies, organizational structure and organizational structure.
Innovation is at the core of the organization culture in Bulla Dairy. The organization is extremely concerned about providing unique value to the customers. Therefore, the organization is capable of taking the differentiation generic strategy for being competitive in the market. Moreover, the employees are allowed to contribute their innovative ideas for the success of the organization. It allows the organization to focus on new aspect of business through targeting new types of customers. Moreover, there is concrete relationship between the organizational culture and generic strategies of Bulla Dairy.
Organizational structure defines the way of allocating and dividing the task among each of the department of the organization. Moreover, it defines the flow of communication within the organization. Therefore, the nature of organizational culture is highly dependent of the structure of the organization. In case of Bulla Dairy, the board decides the long-term business strategies of the organization. However, the director is responsible for communicating the strategies among each departmental head. Moreover, the directors allow enough authority to the departmental heads for managing their individual department. Therefore, this organizational structure has created open organizational culture, where board does not micromanage each activities of each department.
Organizational strategies set out the roadmap for the organization for meeting organizational goals. On the other hand, organizational structure defines the way in which organizational resources are distributes among each department for achieving organizational goals. Therefore, the structure and strategy of the organization must be woven together for better sustainability in the market. The organizational structure is functional in nature, where the organizational departments are grouped together based on their specialized areas. Therefore, these specialized departments can better contribute their innovative ideas for bringing differentiation in the organization.
References
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