Mgt5Str Strategic Management: Report Of Assessment Answers

Chobani Company is an Australian company that deals with dairy products as their main commodity. It is the best-selling dairy company in Australia. The company uses different strategies to maintain their position as the leading dairy company in Australia. The research below evaluates the changes that the company is making on their strategy to attain their goals in the future. It also justifies the adopted strategy of the company and gives challenges that the company may face in the implementation.

Future review of the company

Choboni has been the leading dairy company and is having a plan in an effort to maintain their position. The company is looking forward to capturing the world in the near future. The other plan is line extension. The business is intending to start producing other products other than yoghurt. The company is also adopting a differentiation strategy to be able to make their product very different from other dairy companies (Kachouie, Mavondo, & Sands, 2018).  Finally, yet importantly, it has an objective to extend their brand besides the extension of the line of commodities. From the above, it is clear that the company is still standing and has a great future.

External and internal environment analyses

In an effort to assist Choboni company in coming up with their strategic vision and direction there is a need to understand the company’s environment.

SWOT analysis: Strengths

The company has a major strength which the stand and status it has within the dairy industry. Their yoghurt has more proteins compared to other companies.  Therefore, the brand is well known and has a great market share in the dairy market. This has been described as the “marketing triumph” for Choboni Company. Secondly, the company has a strength based on the marketing efforts (Fixson, & Rao, 2014). The company has pursued a very good marketing approach. The company has a strong stand on social media, Press publicity and huge awareness. This has enabled the company to reach both the specific targets niches and broad swathes of the population.

Weaknesses

The company has suffered many setbacks despite the fact that it has a lot of strengths. The company is not faring well product promotion and advertisement of their product. In addition, the price of their commodities is very high and discourages many people from purchasing their products (Ahmed, 2015). The company does not have strong brand recognition like other companies in the same industry. The target market is mostly female gender and this limits the company. The company is also experiencing a decline in the market share recently.

Opportunities

The company is having an opportunity in the Chinese market. The Chinese market is predicted to be the leading market in terms of volume growth and value. The Choboni dairy company has taken this opportunity in schools and is extending to school lunches. The company income is increasing constantly which is a great opportunity for the company to expand (Abdulsamad, & Gereffi, 2016).  Finally, yet importantly, the Asian Pacific market has now increased in the terms of growth and is creating a good opportunity for the company. The company is having an opportunity to access the global market.  

Threats

The success of the company has come along with very many threats. From the time the company started, it has been performing well in the dairy market and has acquired a large share in the dairy markets. This success has attracted different allot of competition from other dairy companies such as Yoplait (Zhuplev, Stefl, & Rohm, 2018). These companies are great competitors and are a great threat to the company. Acquiring land is also very expensive for the company. Lastly, the company is faced with a threat of new businesses entering the dairy industry. These entrants are having more male consumers and therefore are a great threat to the company.

Five force porter’s analysis: Competitive rivalry

Companies such as Yoplait are great competitors for Choboni Company. The company only offers Greek yoghurt and therefore makes Yoplait and Dannon great her great competitors. However, the company has been able to secure a good market share in the drinks market than the other local companies (Beard, 2018). Other then the already existing markets the company is facing a lot of competition from new entrants who have a lot of male consumers.

The threat of new entrants

 Very many businesses are trying to enter into the dairy industry in Australia. This has posed a great threat to Choboni Company (Dreyfuss, 2018). The company's products are mostly bought by the female gender while for the new entrants they have more male consumers. The company is therefore faced with a lot of competition from the companies that are entering the market

Bargaining power of the consumer

Choboni has left suppliers with a very low bargaining power. It has also reduced the cost involved in switching suppliers (Kachouie, Mavondo, & Sands, 2018). The company requires raw materials in large amounts thus giving an opportunity for any company to supply the raw materials. The company, therefore, is able to shift from one supplier to another because of the many suppliers available. This shows that the suppliers are having very low bargaining power.

Bargaining power of buyers

Choboni has held a certain bargaining power over their customers because it has a very high market share in the market. Therefore, the company can increase the prices of their commodity moderately without having to lose any buyer. On the other hand, those who are high earners and therefore are not sensitive to increase in prices mostly consume expensive yoghurt.

Threats of substitutes

Many controversies are associated with the consumption Choboni yoghurt. Some say that the drink is not healthy and due to a lot of proteins contained in the yoghurt (Saunders, et al 2018). However, Choboni has been able to deal with these controversies by ensuring that the raw materials that they use are of the best quality. Therefore, even after the controversies the primary consumers of the yoghurt continues to consume the products. These are mostly the female gender who get attracted to the sweet taste of the product

Theories and literature

 Lieberman (2003) says that a successful company in a given industry will strive to maintain their position by the use of different strategies. The company will do this by creating barriers to new entrants and exploring new markets from all over the world. The company will acquire competitive advantages over its rivals. Choboni is one of the successful organizations is threatened by the new entrants in the dairy industry. The company has set a very high price for their commodities, which requires that any new entrant will require a lot of money to sustain the production (Shea, 2014). The company has also differentiated their commodities from other competitors by use of high-quality raw materials. This is by making their yoghurt rich in protein and is therefore preferred than other yoghurts. In addition, the company has introduced other diverse commodities in the effort of extending their line of production. It is, therefore, able to compete with other companies who deal with the same commodities such as Donnon. Extension of the market to the other countries is a great investment for the company.

Justification of the adopted strategy

Other than price-cutting, the company is concentrating more on modifying their brand and market strategy. Its strategy is extending in the different region in Australia by use of appropriate marketing strategy (Wang, Gurnani, & Subramanian, 2018).  The company is extending to different other countries such as the United States of America. This increases the market for the yoghurt and thus the development of the company. In their effort to make their products different, the company is coming up with commodities that will suit men consumption (Fitzgerald, & Priolo, 2018). This will enable the company to compete with the new entrants who are having more male consumers than women. Making their products different by improving on the quality is a great strategy for the company.

Constraints and limits

 Extending production to the rest of the word is very expensive and needs a lot of time. The company, therefore, may not be able to extend their production to some countries because of the cost. In addition, government regulation is a limitation that will affect the company in the implementation of their strategy (Mohammed, 2018). Governments of the developing countries discourage other companies from getting to their countries in an effort of securing their local industries. Lastly producing other commodities is an added cost for the company. Buying land in Australia is very expensive and therefore limits the company from expanding.

Conclusion

Extending production from the primary country to other countries is a good step for the development of a business. The strategies give the company exposure to new markets and thus increase in their sales. Diversifying the products of the company is also very essential. It allows the company to compete effectively with other companies. The adopted strategy will enable the company to acquire customers from all over the world.

References

Abdulsamad, A., & Gereffi, G. (2016). Dairy value chains in East Africa. Duke Center on Globalization, Governance, and Competitiveness.

Ahmed, N. (2015). Resource Review: Euromonitor International’s Passport. Media Industries Journal, 2(2).

Beard, F. (2018). Comparative Advertising: History, Theory, and Practice. Rowman & Littlefield.

Dreyfuss, R. C. (2018). Harmonization: Top down, Bottom Up—And Now Sideways? The Impact of the IP Provisions of Megaregional Agreements on the Third Party States.

Fitzgerald, D., & Priolo, A. (2018). How Do Firms Build Market Share? (No. w24794). National Bureau of Economic Research.

Fixson, S. K., & Rao, J. (2014). Learning emergent strategies through design thinking. Design Management Review, 25(1), 46-53.

Kachouie, R., Mavondo, F., & Sands, S. (2018). Dynamic marketing capabilities view on creating market change. European Journal of Marketing, 52(5/6), 1007-1036.

Mohammed, R. M. (2018). Essays on Differentiated Yogurt Market in the United States (Doctoral dissertation).

Saunders, M. J., Luden, N. D., DeWitt, C. R., Gross, M. C., & Dillon Rios, A. (2018). Protein Supplementation During or Following a Marathon Run Influences Post-Exercise Recovery. Nutrients, 10(3), 333.

Shea, M. (2014). Punishing animal rights activists for animal abuse: Rapid reporting and the new wave of ag-gag laws. Colum. JL & Soc. Probs., 48, 337.

Wang, S., Gurnani, H. B., & Subramanian, U. (2018). The Informational Content of Buyback Contracts.

Zhuplev, A., Stefl, M., & Rohm, A. (2018). Doing Business in the United States: A Guide for Small Business Entrepreneurs with a Global Mindset. Business Expert Press.