Discuss about the Business Environment & Strategic Management for Apollo Food Berhad.
Bargaining power of suppliers: The bargaining power of suppliers is medium for Apollo Food and London Biscuit. These companies operate in bakery and confectionary business. There are a large number of suppliers that provides raw materials to companies in this sector. The companies are dependent on the suppliers to get quality raw material. Therefore, it can be said that the bargaining power of suppliers is medium in this industry. It is expected that the number of suppliers would further increase in the market and it should further reduce the existing bargaining power of supplies (Cross & Belich, 2015).
Bargaining power of buyers: The bargaining power of buyers is high in this industry. The competition is high in this industry and the players like Apollo Food compete with several other players. The end customers have the options to choose from various companies. Therefore, the bargaining power of buyers in this industry. The buyers or the consumers would often want to try the food from different vendors. It is expected that the bargaining power of buyers would further increase with time. With the increased penetration of e-commerce, the consumers have got more choice. It is expected that the bargaining power of buyers would further increase as the customers would have more options to choose from (Anders & Schiendorfer, 2015).
Threat of substitutes: The threat of substitutes is high in this industry. The food industry is a dynamic industry where customer loyalty is usually low. The customers would easily change their taste and preferences from bakery to some other food. Therefore, it can be said that the threat of substitutes is high in this industry. The threat of substitutes is also high as people do not feel any cost to switch from one player to another. Moreover, there are number of food options to choose from. The people would often get bored from the same type of food. Therefore, there would be a natural desire in people to change their food preferences.
Threat of new entrants: The threat of new entrants is also high in this industry. The organization in this industry does not have to make any huge initial investment. Therefore, companies would easily enter the market and exit the market. The low barriers to entry and low barriers to exist make the threat of new entrants high. The Malaysian market is a growing market and it is expected that the threat of new entrants would further increase in the market. Going forward, there would be more and more domestic and international players that would enter the market (Bhattacharjee & Berger, 2014).
Industry rivalry: The existing industry rivalry is high in this industry. There are a large number of players in the market that compete among themselves for customers’ share of mind and wallet. The companies would often expand to increase their business. It would further increase the existing industry rivalry. In recent times, the industry rivalry has also increased due to entry of various international players. In the current business environment, both domestic and international players compete together (Berthon & Pitt, 2015).
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STRENGTH 1. The brand name of the company is its biggest strength. Apollo is a reputed name in Malaysia and global market (Huang & Sarigollu, 2014). It provides a unique strength to company The legacy and the experience of the company is another key strength of Apollo Food Holdings. The company has the experience in food industry in not only in the local Malaysian market but at international level. Apollo Food Holdings has several patents on its names. This is also one of the key strength of the company. There are few products of the company that competitors cannot imitate. Therefore, the company is able to charge the premium prices for its products. The company is able to keep its prices low and this has been possible with an efficient and effective supply chain (Lewis & Siu, 2015). |
WEAKNESSES The employees of the company have limited say in the company strategy making. They don’t feel that their employees should have a say so when it comes to executive decisions, therefore management makes all the decisions based on what is best for the company rather than the employees themselves. Another weakness of the company is that it has a closed system in place. consist of a large number of heterogeneous agents that are embedded in a dynamic and potentially hostile environment. Since the agents’ behavior and objectives are possibly not under the control of the system designer or other agents, only few assumptions can be made about them” (p. 3). This statement succinctly summarizes one problem that could arise from this type of system. It is often difficult to ensure collaboration and cooperation among diverse entities. At times, two departments or environmental agents may actually be working against each other, rather than working together for the good of the organization. |
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THREATS The biggest threat for Apollo Food Holdings is the threat from competition. There are several players in the market that compete among themselves for customers’ share of mind and wallet. In recent times, the industry rivalry has also increased due to entry of various international players. In the current business environment, both domestic and international players compete together. There also exists threat from various external factors like government regulations and environmental factors. The manufacturing of the products and food items requires large volume of Palm oil. It pollutes the environment and there is a possibility that the government intervention would increase to use the clean form of energy. |
OPPORTUNITIES The good thing for Apollo Food Holdings is that the FMCG (Fast Moving Consumer Goods) industry is a growing industry in Malaysia and internationally. It is expected that the industry would continue to grow at a CAGR (Compounded Annual Growth Rate) of 7% to 8%. It means that the company would have various avenues and target market to explore in domestic and international market. There is also an opportunity for the company to increase its reach. In recent times, there has been an increase in the disposable income of consumers and this possess a huge opportunity for Apollo Food Holdings (Rocker & Homburg, 2016). |
SWOT Analysis: London Biscuit Food Holdings
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STRENGTH The biggest strength of London Biscuit is its brand equity. People consider London Biscuit as a premium brand. The company has been really successful to improve its brand image and brand perception. The organization has a unique way and unique formulae to manufacture the biscuits. There are a large number of people that are fan of the existing products of London Biscuits. The use of Information Technology and ERP systems to manage its supply chain is also a big strength for Apollo Holdings. With the Supply Chain Management System, the company is able to optimize its cost. |
WEAKNESSES One of the weaknesses of the company is lack of HR policies in the organization. When managers receive feedback internally and externally, it is important to analyze the information in order to make informed decisions about future actions. When there is a vast amount of information available to managers, they should try to implement filters so that information is disseminated to the proper channels to be utilized in helpful ways. Daft (2016) mentioned that the use of liaisons can be helpful to filter and communicate changes with teams in order to keep everyone aligned toward specific goals. |
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THREATS The biggest threat for London Biscuit is the threat from competition. There are several players in the market that compete among themselves for customers’ share of mind and wallet. In recent times, the industry rivalry has also increased due to entry of various international players. In the current business environment, both domestic and international players compete together (Vargo & Lusch, 2014). There also exists threat from various external factors like government regulations and environmental factors. The manufacturing of the products and food items requires large volume of Palm oil. It pollutes the environment and there is a possibility that the government intervention would increase to use the clean form of energy |
OPPORTUNITIES The growing demand in the market and increasing growth rate of food industry is biggest opportunity for London Biscuits. The market would continue to grow at a good growth rate and it would create more market possibilities for London Biscuits. There is an opportunity for company to improve its leadership skills and abilities. When a leader is dedicated to serving others, it only helps to improve the employees’ knowledge, abilities, and performance. While culture may vary from one country or religion the qualities of desiring to serve others comes from within. |
References
Anders, G., Schiendorfer, A., Siefert, F., Steghoffer, J, & Reif, W., (2015).Cooperative resource allocation in open systems of systems. ACM Transaction on Autonomous and Adaptive Systems, 10(2), 1-44. doi:10.1145/2700323
Bhattacharjee, A., Berger, J., & Menon, G. (2014). When identity marketing backfires: consumer agency in identity expression. Journal of Consumer Research, 41(2), 294-309.
Berthon, P., & Pitt, L. F. (2015). Marketing and Human Resource Managers: Differences in Perception and Decision-Making. In Proceedings of the 1995 Academy of Marketing Science (AMS) Annual Conference (pp. 63-63). Springer International Publishing.
Cross, J. C., Belich, T. J., & Rudelius, W. (2015). How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer International Publishing.
Huang, R., & Sarigollu, E. (2014). How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.
Lewis, L. F., & Siu, W. S. (2015). Corporate Entrepreneurship and Ethical Decision-Making of Marketing Managers. In Proceedings of the 1997 World Marketing Congress (pp. 646-655). Springer International Publishing.
Rocker, L., Homburg, C., & Vomberg, A. (2016). Which Characteristics Make a Difference? Comparing Successful Managers in Marketing and Sales.
Vargo, S. L., & Lusch, R. F. (2014). Service-dominant logic. What it is not, What it.
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