Critical Success Factors When Going Global -Myassignmenthelp.Com

Question: Discuss About The Critical Success Factors When Going Global? Answer: Introduction Fonterra is one of the leading exporters of dairy products in the world, as they are responsible for more international trade than the other dairy companies in the world with respect to the sales turnover. The chain for the company stretches from New Zealand to more than 140 countries, which shows an increase in the consumption of their products by the consumers. The company started its operations in the early time of the 1800s and has been on a growing spree since that time. It launched its first cheese company in 1871 by taking help of pooled resources, which had an annual turnover of 50 tons of cheese. By the beginning of the 19th century, the majority of the dairy factories that were present in the country were under the co-operatives and they began to export their products overseas market as well ("Fonterra - The Global Dairy Industry" 2018). The company was started by Samuel Mardsen in the year 1814 and it launched its first brand known as Anchor in the year 1923, the same year when the Dairy Board was established. In 1935, the government had taken the control of exporting and marketing the dairy products and felt the need of establishing a board within the country. Therefore, year 2961 saw the creation of the board, which was named as Dairy Production and Marketing Board. By 2001, Fonterra Co-Operative Group was formed, which was based on the merger of three dairy firms ("Fonterra - Our Heritage" 2018). The headquarters of the company is located in Auckland for New Zealand and in Victoria for Australia. The company provides one-fifth of the exports that takes place in the country and is responsible for a 7 percent growth in the Gross Domestic Product of the company. the company produces and distributes its milk products in national and international countries such as Middle East, China, Africa and North America. The major brands under the company are Anmum, Anlene and Anchor and the other brands that are available in the market are Tip Top, DeWinkle and Fresh and Fruity (Fonterra - Company Overview 2018). SWOT analysis of the company The primary strength of the company is that it has a stable and and a secured chain for supplying the milks on a long-term manner in a global manner as well. The demand that is present globally has helped the company in increasing the relationship between the farmers and the shareholders of the company as well. The company has a higher level of productivity with respect to dairy products than any of the two dairy firms merged together. This is the strength for the company, as the employees have helped the company by increasing its level of productivity within the organization (Nilsson and Rydberg 2015). There are a number of employees who have high levels of productivity that has helped in the growth of the industry as well. New Zealand and Australia have a higher level of productivity due to the high consumption of dairy products within these countries (Macdonald and Rowarth 2016). Weaknesses The relationship with the suppliers has to be maintained in a better way so that it can help in getting the resources at a cheaper price. The competitors that are present within the market will push the suppliers in increasing the prices so that the level of profit for the organization decreases. After the merge up of the company with another, the company in the recent time is facing a shortage of resources to increase its level of infrastructure, as the relocation of the resources and the infrastructures are not possible at a short notice. The dairy firms have to rely on the ecology and the climate, as the sudden change in the weather conditions may result in the low quality of milk, which may affect the other products as well. This can reduce the level of efficiency of the firm, which will help the competitors in gaining a competitive advantage (Pawson and Perkins 2017). Opportunities The organization needs to decrease the entry barriers in the market. Since the market conducts in an open economy, it is easy for the rival companies in developing better dairy products to sell in the market. This may affect the goodwill of Fonterra, as the competitors may result in decreasing the sale of the company and hamper the sale as well (Livingstone et al. 2015). The World Trade Organization (WTO) has increased the trade negotiations, which has resulted in supplying the products at a lower cost. This will help the company in entering new markets as well so that the consumers can be able to purchase their products and the goodwill of the company can be increased as well. The company can improve its image of green business by adding value to the nutrition that is available in the product. Since most of the customers in the recent world have become more conscious towards the products that they are consuming, it will be easy for the company to sell the dairy products by providing a firsthand knowledge of the nutrients that are present in the product. This will help the consumers in understanding the importance of the consumption of the dairy products (Pang 2017). Threat Most of the countries, due to the effect of globalization have increased the tariff rates for the international companies so that it can help in protecting the local suppliers and increase their rate of profit. Most of the competitors that are present in the market have been taking up the global strategy so that it can help them in increasing their rate of profit and earn goodwill in the foreign markets as well (Pavlovich, Sinha and Rodrigues 2016). The competitors after entering the new markets will result in decreasing the profit of firm, as the customers will be able to use the differentiated products as well at a cheaper cost, which may decrease the sale of the dairy products produced by Fonterra. Since the company operates on a global scale, the rate of exchange with respect to currency plays an important role in determining the prices of the products. The drop in the prices may result in the decrease in the profit levels of the firm as well, which would hamper its operations in those nations (Fu 2014). Recommendation The demographic analysis has to be conducted by the company so that they can understand the various age groups that will be willing to purchase the products. The demographic analysis will help the company in getting a better knowledge regarding the age, gender of the population, marital status of the local people along with the religion and race that the population belongs (Lockhart, Donaghy and Gow 2016). The psychographic analysis will help in determining the likeliness within the population for buying the particular product or services from the organization. The lifestyles and the interests of the people have to be studied in a proper manner so that it can help the company in understanding the needs and preferences of the population. The attitudes and the opinions of the customers need to be taken in to consideration so that it can help the company in manufacturing the products in a better way, which will help them in earning better profit margins (McGiven 2016). The company will be able to manufacture the products according to the tastes and preferences of the consumers so that the product can be liked by them. In the Australian market, it can be seen that the company will be manufacturing the products for all the age groups. This is due to the fact that the dairy products can be consumed by people of all age groups (Fu 2014). The dairy products are suitable for all the age groups and it will suit the lifestyles of the entire population, as it helps in providing vital nutrients to the human bodies. The young age groups will benefit from the dairy products, as it will help them in developing their bodies and providing them with sufficient nutrients as well. The teenage customers along with the age group belonging to 25-30 and 31 and above will be benefitting from the consumption of the dairy products, as it will help them in revitalizing the necessary nutrients in their body (De Witt 2017). New product/ services description The company has launched a new product in the market known as Daily Fresh, which is provided to the customers in a 750ml bottle. The Unique Selling Proposition (USP) for this product is that the company labels the bottle in such a manner that it helps in highlighting the freshness of the product on each day basis. This helps the company in providing knowledge to the customers regarding the consumption of the products on an everyday manner (Edwards 2016). The customers get a better knowledge from the bottles, as they get to know the manufacturing date of the products and the freshness of the product as well. the company will be beneficial, as the products are being manufactured with respect to the taste and preferences of the customers due to the rise in the household incomes (Baker 2016). The specifications that are being attached in the label of the products of the company will increase the sales in the market, as the consumers will be able to understand the freshness content of the product. The manufacturing of the products on an everyday manner will help in providing the fresh ingredients to the customers so that they can be able to gain the full benefits after the consumption of the product (Shadbolt and Duncan 2014). The company is also taking the help of an online platform for the execution of the products in the markets so that the product can be delivered efficiently to the customers within a 3 kilometer radius. The customers will be able to take a scan of the barcodes that are present in the product so that they can get all the rightful information regarding the quality of the product. After the order has been placed by the customers regarding the product, it will be delivered to them within half an hour (Scott, Bowden and Rowarth 2017). Marketing mix relevant strategies The factor of pricing plays an important role in determining the value of sales that will be made by the company. The pricing policy adopted by the company plays a significant role in determining the shares and fluctuations that are taking place in the market due to the various circumstances. Pricing is an important element, as it helps in generating better turnover for the organization. The marketers of the company need to analyze the situation so that the price of the products can be done accordingly. The consumers will be willing to pay an extra amount for better quality of products, as it will help them in replenishing their demands and substitute it with the consumption of one product only (Woodford and Lucock 2013). The company will be adopting the strategy of penetration pricing so that the products can be priced at a lower rate, which will help them in gaining an advantage over the rival firms that are present in the market. The penetration strategy will help the company in gaining a better percentage of shares in the market after which the prices can be increased again in the market. The consumers will be willing to pay a premium price for the product, as they are of the perception that the product is superior to the others that are present in the market (Muirhead 2014). Product The product is an important part of the marketing mix tool, as it helps in the survival of the company in the market. The better quality of product will help in attracting new customers towards the company so that a larger base of customers can be built. It will also help the company in gaining a competitive advantage than the rival companies that are present in the same market by providing better quality of products at a competitive price (Anuranga 2014). The Daily Fresh that is being provided by the company is an innovative product, as the labels contain the days till which the product can remain fresh along with the time that the product has been made. This will help the company in gaining a competitive advantage over the other firms that are operating on a local manner, as the consumers will have a prior knowledge regarding the manufacturing of the products. The stocks of the company are replenished on an overnight basis so that it can provide the fresh quantity of milk to its customers. These will help the company in attracting large number of customers and build up its customer base as well (Shadbolt and Duncan 2014). Place The production of the Daily Fresh product takes place in the factory of the company that is situated in Australia on a regular basis so that it can help in delivering the best quality products to its customers. After the products are manufactured, it is packed and transported in a safe manner with the help of the company trucks to the local retail and wholesale stores. The online platform collects the products directly from the warehouse of the company so that they do not have to pay an additional cost to the wholesalers or the retailers (Edwards 2016). This helps them in keeping their profit margins low and provides the products at a better rate of discount. The distribution channels of the company are well coordinated, which helps them in supplying the products within the specified time for the customers to enjoy it. The replenishment of the products are also done properly, as the company communicates with the sellers in a proper manner and takes feedbacks from them as well regardi ng the taste and the preferences of the customers (Muirhead 2014). Promotion This is the strategy that needs to be undertaken by the company so that there is a proper mode of communication between the target market and the product that is being introduced there. It is the process through which better levels of awareness can be created by the company towards the customers regarding the product being available in the market. The promotional tactic used by the company helps the target customers in associating themselves with the product that is being available in the market. It also helps up in creating the chain of supply so that the product can be highlighted after the customer has entered in to the shop (Fu 2014). The company will try to promote the new product in the market with the help of advertisements and providing free samples to the customers as well. The medium of advertising that will be used by the company for promoting the brand will be through the billboards and banners so that it can help in grabbing the attention of the customers. It will also advertise in the newspapers as well so that the consumers who are regular at reading the morning or the evening paper will get a firsthand knowledge regarding the product (McGiven 2016). The advertisements will be shown in between the television and cartoon programs as well so that the young children can also get to know about the product, as they do not have the habit of reading the papers. The design of the logo for the new products has to be done in such a manner so that it can help in attracting the customers towards them (Pang 2017). The other method of promotion that can be used by the company is to provide free samples to the customers so that it can help them in getting a taste of the product. This will help the customers in differentiating the products from the other companies that are available in the local market. After the sampling has been done by the customers, the company can provide point systems to them so that the next purchases can be done based on the accumulation of points. These points can be accumulated by the customers and capitalized in getting a free bottle of the milk product as well (Nilsson and Rydberg 2015). Conclusion Therefore to conclude, it can be said that the company needs to use the marketing mix tools that are available to them so that it can help in creating awareness among the consumers. This will help the company in increasing its profit margin and widen its base of customers as well. The use of the online channels of marketing along with the distribution of the products in the local market will help the company in raising the awareness levels among the customers. The proper selection of the target market will help the company in increasing its sale and profits with respect to the new product as well. Reference List Anuranga, B.K.H.D., 2014. DCD, a Potential Shield to Uplift Local Milk.Scientific Reseach Journal, pp.20-25. Baker, R., 2016. Implementation of the Fonterra Palm Kernel Guideline. De Witt, M., 2017.Discretion in Decision Making: The Fonterra Case(Doctoral dissertation, University of Waikato). Edwards, M., 2016. Complaints in the food and drink industry. Fonterra - Company Overview. 2018. Fonterra.com. Retrieved 30 January 2018, from https://www.fonterra.com/nz/en/about/company+overview Fonterra - Our Heritage. 2018. Fonterra.com. 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