Business Management and Strategic Management
Strategic management is the formulation of effective organizational goals and objectives through identifying the external and internal environment of an organization (Daspit et al., 2017). Such goals and objectives are actually directed towards high level of organizational success. This presentation will analyze the strategic management of Dairy Product Australia in the Australian dairy industry. The presentation will present various issues faced by the firm. The presentation will also present a situational analysis of the firm. Apart from that, the presentation will discuss the corporate level objectives and functional level objectives of the firm along with functional strategies and business level strategies. Furthermore, some contingencies and strategic constraints of the firm will also be discussed in this presentation. Finally, the presentation will also set some suitable recommendation to be presented to the board of directors.
The company is targeted towards making a well-established market in Australia through providing delicious dairy products. It offers wide variety of dairy products including ice cream, sour cream, table cream, yogurt, cottage cheese and many others. The market share of the company in Australian diary industry is quite commendable. The company is situated in Central Queensland of Sydney in Australia. It is restricted only within Sydney in terms of business operation. However, the dairy firm is quite capable of maintaining its strong hierarchical framework for communicating with its stakeholders.
Bettis et al., (2016) pointed out that the market players in Australian dairy industry are facing tough competition among themselves in terms of grabbing commendable market share. Therefore, this competitive issue is also affecting this dairy firm. On the other hand, Chen et al., (2015) opined that the competitive companies are also offering also same quality products with affordable prices. In such situation, this dairy firm poorly diversified products, low market penetration and poor discounts and offers. Hence, the company is facing tough competitive pressure in Australian dairy industry. Furthermore, the organization has lack of technically advanced equipment, which is actually limiting the production capability of the firm. Furthermore, the company also has some availability issue due to poor distribution, lack of official website and poor marketing and promotion strategies.
According to Durand et al., (2017), PESTLE analysis explores the external business factors, which have major impact on business performance. Moreover, organizations do not have much control over the external factors, which are explored through PESTLE analysis tool. On the other hand, Trigeorgis and Reuer, (2017) opined that PESTLE tool explores the external market environment factors like political, economic, social, technical, legal and environmental factors. While assessing the external market environment of this diary firm, it can be seen that stable political condition of Australia is highly favorable for its business operation. Growing economic condition of Australia has also increased the profit potentiality of the dairy firm with increased return on investment. Australians are more likely to purchase healthy and fat free dairy foods. This trend has increased the sales volume of fat free dairy products of this firm. The dairy firm uses advanced technology, which has improved its production system. On the other hand, the firm always adheres to the consumer and employee law of Australia.
According to Mitchell and Leiponen, (2016), SWOT analysis assists in establishing competitive merit unit of an existing firm. Moreover, this analytical tool assesses the internal strength and weakness and external threats and opportunities of an organization. On the other hand, Bergh et al., (2014) opined that SWOT analysis assesses the potentiality of growth in market share, scope in international market, financial capability, human resource strength and technical strength and others. While assessing the internal market environment of Diary Product Australia, it has been found that the organization is highly popular for its high quality products. The firm also has strong technical equipments for improved manufacturing process. However, the organization has inadequate number of skilled sales staffs, which hamper the sales volume of the dairy firm. Apart from that, the increasing brand value can provide huge opportunities to the dairy firm towards international expansion. However, the hike in tax rate and changing regulatory legislation of Australia can hamper the business process of the dairy form. Furthermore, the dairy firm is also facing tough competition from the major market players like Bulla Dairy, Baskin Robbins Australia and others.
It can be said that the organization provides good quality products at average pricing. According to Vogel and Güttel, (2013), when products are offered in lower price then it creates a sense of poor product value among the consumers. Therefore, only a certain a class of consumers are satisfied. On the other hand, Simon et al., (2014) pointed out that if categorized products are sold in different pricing strategy, then both high class and middle-class people are targeted. This eventually increases sales. For Dairy Product Australia, it is quite similar as it is selling good quality in low price, which is reducing its brand value. Bulla Dairy is found to be the top competitor, and therefore, if price of products are increased then more sales will be possible.
The prime objective of the firm is to expand its market both locally as well as internationally. It will enhance its sales volume both in its existing market as well as new markets. Apart from that, the dairy firm is also targeted towards diversifying its product brands. Fulfillment of this objective will assist the dairy firm in gaining competitive advantage over the competitors in the market. In order to maintain strong customer relationship, it is extremely important to frequently communicate with the customers. Therefore, the organization is targeted to achieve the objective of increased customer engagement through social media sites. It will help the firm in maintaining consistent engagement with the customers. Furthermore, the objective of the organization is also to design and implement innovative and unique marketing framework for enhanced marketing and promotion of the brands.
According to Greco et al., (2013), functional areas define the departments, which serve to the specific purpose in an organization towards attaining its overall objectives. These purposes are like sales, purchase, administrative, manufacturing and human resource department. On the other hand, Kenworthy and Verbeke, (2015) opined that functional areas operate interdependently towards steering an organization in achieving its overall goals and objectives in systematic manner. The prime functional objective of the firm is to work in synergy towards actualizing its general company objectives. It will help the firm in maintaining consistent performance towards effectively achieving its overall goals and objectives. Furthermore, the functional objectives of the dairy firm also include enhancing its operational capacities. This functional objective will help the firm in enhancing its operational effectiveness towards achieving its overall goals and objectives. Furthermore, another functional objective of the firm is to enhance the skills level of technical expertise and increase the usage of skills resources.
Zietsma et al., (2014) pointed out that functional area strategies provide road map to an organization towards reaching at its desired position. Moreover, the purpose of this strategic plan is to change the company direction, accelerate growth, enhance profitability and allocate resources to the functional areas, which have best potential towards achieving the overall organizational goals and objectives. On the other hand, Karadag, (2015) opined that the strategies of functional areas are directed towards achieving the ultimate goals and objectives of an organization. Dairy Product Australia will set personnel strategy of hiring, recognizing and growing the most efficacious staff. Furthermore, the firm will also consider technical strategy through adopting suitable technology towards enhancing overall operational efficacy. The firm will also develop product diversification strategy and infrastructure strategy for gaining competitive advantage in the market. Apart from that, the firm will also set the standard for implementing the chief internal and external opportunities.
According to Theriou, (2015), animal welfare must be the prime aspect in the dairy industry and therefore no artificial injections must be applied. On the other hand, Demir et al., (2017) pointed out that ethics depends on the amount an organization pollutes environment from its daily operation. Considering Dairy Product Australia, it can be said that the organization does not deal with any sort of artificial injection that might stimulate animal hormone. Also, the organization uses fine quality plastic and tin packaging so that toxicity is at the least level. The organization also tries to reduce carbon emission by recycling its waste.
According to Stead and Stead, (2013), business level strategies indicate the detailed actions, which are undertaken to provide unique value to the customers and gain competitive advantage by exploiting the core competencies of an organization. On the other hand, Simon et al., (2014) opined that business level strategies are the detailed outlined plan towards delivering unique value to the customers. Dairy Product Australia has also set some effective business level strategy for gaining competitive advantage over the rival companies. Moreover, the dairy firm has set some Business Level Strategies to be fulfilled within 2017-2020. The firm will enhance the level of staff engagement for enhancing the productivity and quality of the organizational products. Moreover, the firm will enhance their staff engagement level through interactive working policies, initiating reward and recognition and enhance employee participation level. Apart from that, the company will also enhance their branding effectiveness through increased market presence and promotion through social media. It will assist in effective promotion of the brands in the market
According to Chen et al., (2015), contingency defines an imminent situation or event, which can occur at any time in business operation, but its predictability is quite uncertain. Moreover, the situation can be anticipated organizations, which are quite adverse for the business success. However, Trigeorgis and Reuer, (2017) opined that management of an organization often fail to predict this situation with absolute certainty. Therefore, such uncertain events hamper the success level of an organization. Most common contingencies for an organization are changing government regulation, union pressure, customer changing preferences, suppliers’ power, technological changes and others. In case of Dairy Product Australia, the organization is more likely to face the contingencies in terms of technological changes in global basis.
Bettis et al., (2016) pointed out that strategic constraints actually hinder the success of a planned strategy through creating various hindrances. Therefore, such strategic constraints should always be identified towards addressing them and bringing the success level of the strategies. In case of Dairy Product Australia, the organization can face the strategic constraint in terms of lack of top management’s engagement in implementing the strategies and leading its success. Furthermore, the firm can also have the strategies constraints in regards to inadequate resource allocation to the prime aspect of the strategies. Apart from that, the strategic planner of the dairy firm can also face the strategic constraints in terms of budget constraints towards proper implementation of the strategies.
Conclusion
While concluding, it can be said that Dairy Product Australia is operating at satisfactory level but it needs to expand more in future. Financially the organization is strong but in terms of product variety it is quite poor. Also, Dairy Product Australia lacks in marketing and sales and therefore distribution of its products is limited geographically. It has the opportunity to extend in international market through new product placement using high price. In future, the organization will surely create huge competition if more products, more factory bases and high pricing strategy are followed.
Dairy Product Australia should diversify its product portfolio towards gaining competitive edge in the market. Moreover, the firm should place new products in the market. The firm should also hire new and talented marketing and sales supervisors for enhancing the product value in the market and increasing sales volume. Furthermore, the organization should use competitive pricing in developed market and offer discounts in the new market towards increasing business profit level. Acquisition of new emerging dairy firms will reduce its fierce competition level in the market. On the other hand, the dairy firm should also concentrate on its social media presence for effective brand promotion.
References
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