MG304 Agriculture Value Chain Management Case Study 2 Sample
Assignment Details
Report structure
• Executive summary
Provided an overview of your case study
• Introduction
Provided an overview of your agribusiness, competitor analysis that you have explained in your assessment 1
• Consumer value
Clearly identified the product and its value attributes are well analysed and explained
• Actors and their roles
Value chain actors are being identified and their roles/activities are well explained
• Value chain map
Clearly mapped the value chain based on a selected product from your case study company
• Management practices
Critical dimensions of the value chain – product flow, communication, relationships are being analysed .Rigorous analysis of the management practices, integration, and effectiveness of chain members
• Issues and constraints
Issues or constraints in the chain are identified based on the previous analysis
• Recommendations
Potential points of improvement are identified based on the issues or constraints
• Overall presentation
Professionally presented
Well-articulated and justified
Clear, concise, and objective writing style
Tables and figures are well linked to the text
Reference list is complete and correctly referenced
Solution
CASE STUDY ON BUNDABERG RUM
Executive Summary
Bundaberg Rum has its origin in 1888 in Queensland and the reason that this company has been persistently making their rum which is made from local sources and crafted through their facilities of distilling. By utilising their sources which are produced locally, Bundaberg Rum aims to produce its blend which is unique and known as ‘the world’s best rum’. In recent years, this company has entered the market with an attempt to make an explain in the market and with an introduction of specialised and pre-mixed drinks. This study has been made main focus on the Bundaberg Rum company and its structure along with the product range to help the analysis of the competitive environment to allow in the sharing of accurate information and the correct range data. Profiting from brand recognition and spending money on research to improve products and align prices are suggested. Utilise Brand Strength, Invest in Research and Development, Diversify Flavours, and Plan for Global Expansion. With its well-known brand, Bundaberg Rum can succeed even more by putting money into innovation, going global, and making sure that its goods reflect changing economic and consumer trends. Due to difficulties obtaining sugarcane, Bundaberg Rum's value chain experienced supply instability. An inventive approach to overcoming this involves vertical integration through collaborations or the purchase of sugarcane plantations. This technique assures a reliable, high-quality supply of sugarcane by improving production control, lowering uncertainty, and maintaining product quality. By addressing the sourcing limitation in this way, the supply chain is made more resilient and the problem is permanently fixed.
Overview of the Industry
As the national organisation that represents the interests of beverage producers, distributors, retailers, and the 16 million Australians who consume alcoholic beverages, the goal is to build a sustainable alcohol beverages industry that will support the livelihoods of 500,000 Australians. The industry in the sector of beverages has been conventionally a market with specified increments of demands based on several other associated technologies and cleanliness. Intense cleanliness is required to sustain the final product with standards based on good quality and the length of which it can be kept. The industry initiating processing beverages has to accept several challenges based on costs incurred by raw materials and others (Roobab et al., 2021). The research conducted over 10 years by Statista Research Department from 2009 to 2018 in Australia shows that the volume of the market in the global beverage In 2023, the Alcoholic Drinks market will generate US$29.9 billion in revenue. (CAGR 2023-2027) The market is anticipated to expand by 5.36% yearly (Statista, 2023).
Bundaberg is a two-year-old Australian dark rum spirit beverage (technically, it's not a rum because it's barely 37.5% ABV). The name of the business honors the Queensland city of Bundaberg, where it was founded. Non-alcoholic and alcoholic beverages constitute the two primary sectors of the beverage market. The industry has grown significantly as a result of this distinction and rising customer demand for various types of beverages (Bundabergrum, 2023). The business has shown consistent growth throughout the years, and the Australian alcoholic drinks market is expected to generate US$29.9 billion in revenue in 2023, with a Compound Annual Growth Rate (CAGR) of roughly 5.36% from 2023 to 2027.
With a presence in more than 100 nations, Bundaberg Rum conducts business both domestically and abroad. The business has successfully partnered with numerous clubs and events to expand the reach of its brand and consumer base. The distinctive flavors and production techniques have strengthened the brand and made it a customer favorite. Brand recognition, consumer preferences, and technology improvements have all had an impact on the highly competitive the marketplace has become. Digital platforms and technology have made it possible for firms to communicate with consumers more effectively and efficiently. By utilising social media campaigns and partnerships with clubs to increase its market for university assignment help visibility, Bundaberg Rum has benefited from this trend.
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Figure 1: Persistent growth in the market size of beverages
(Source: tandobeverage.com)
These sales are still rising and will persistently increase in size in the future as one of the important shares in the market is surrounded by business houses. The industry in the sector of beverages mainly consists of two primary categories non-alcoholic segment and the alcoholic segment and both of these are predicted to attain a positive value on the market. Despite the sizeable sales that have been on an increment throughout the time of these years, the industry for various kinds of beverages in Australia (Baiano, 2021). Australia's retail sales of alcohol increased significantly over those of 2019 and 2020 in 2021, setting a record high. A record $15.9 billion was generated in turnover in 2021(Alcohol Beverages Australia, 2022).
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Figure 2: The trend of consumption of alcohol in the countries which are regarded
(Source: tandobeverage.com)
Structure of the agribusiness and its operations
Bundaberg Rum is one of the companies situated in Australia which provides the most well-known rum in Australia. Bundaberg Rum has been honouring its tradition for more than 130 years. This company have an offer for two tours based on the experience of the visitors. One is the experience based on the Distillery of Bundaberg Rum and the experience based on blending their chosen rum. This company also has a retail store in which those visiting their company can buy their products which are not excluded and edition which are limited to a specific number of copies (Mangwanda et al., 2021). The idea of Bundaberg Rum of based on seven Queenslanders who understood and recognised that it is the need of the hour to make better and proper use of the industry based on sugar in the Burgeoning. Then it started working according to their plan, Distillery of Bundaberg has been established along with the starting of a team of production. Bundaberg Rum carries out its operation in over 100 countries and also in Australia. In market share of Australia is the same as the market share in Europe, Asia Pacific and America. The ability to maintain a certain level of growth and investment in this market is very significant to remain in this market. The main objective of this company is to contribute to the markets of Australia and also the markets across the world by presenting and tracking the record of their records and capabilities of this sector in the market (Coelho et al., 2020).
Productions
Bundaberg Rum produces a wide range of rums that have been crafted, especially rums. Out of these three of them have been awarded the top honours at the most prestigious award for drinks. The range of this beverage is around the price of (ex-tax) $ 119 / 750ml (Holton, 2022). It has been observed that Bundaberg Rum has distinguished its products by the best sugar cane grown in the fertile volcanic soil of tropical Queensland is used to make the products, which are proudly created in Australia. This is what gives Bundaberg rum such a unique flavour and personality. Moreover, Utilising locally sourced molasses that is fermented and then distilled in traditional copper pot stills results in a distinctive flavour character, which is the primary distinction (Bundabergrum.com, 2023). The wide range of products produced by the company includes an exclusive range of products, a collection of master distillers and several other offers. The company has been brought into the campfire rum based on the increment in favouritism among the consumers and the Distillery edition has been brought in to mark the celebration of the 134th birthday of their distillery and several other products such as Rum Ball Liquor, Silver Reserve and Spices Blonde Cola and others (Bundabergrum.com, 2023).
Analysis of the Competitive Environment
The people who belong to the middle class have been becoming aware of the brands; consequently, the spirit of consumption of alcohol has been inclined to the very popular brands. An increment daily has been witnessed in pubs and nightclubs. The consumers who belong to the high class for the most part think it preferable to give gifts to people from very popular brands (Annighöfer et al., 2019).
Technology that is available in the present generation is very swift and moving rapidly. This is the reason the consumers get the information for every existing and upcoming product available in the market. The contemporary trend of marketing in the digital platform has been helpful for both the consumers and the owners of business houses as they can easily put up an advertisement for their upcoming products in the digital platform and also the consumers can know about their products (McCosker et al., 2019).
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Table 1: SWOT Analysis
(Source: Self-created)
Bundaberg is a famous company in the industry based on rum. They are deciding in advance to bring into their product along with the wide line of brands. There have been a lot of advertisements initiated to enable a nice growth of the businesses. Their primary objective as a Bandaberg rum manufacturer is to grow their customer base in the Asian market, where they may reach out to new clients by maintaining product prices that are in line with market conditions. By creating unique rum flavours that consumers can enjoy at various times alongside completely conventional beverages. This company have a robust collaboration with several clubs and parties. Several pieces of research based on this have been found based on the evidence that that company sustains a robust base of consumers which in consequence adds to the images of the brand in the place in the market which is completely new (Chapman, 2021).
Bundaberg Rum company have a showing up of robust brand with the help of advertisements. Apart from marketing, to promote the brand and build a relationship with customers, Bundaberg Rum takes part in a number of initiatives. These consist of contributing to the community, supporting regional occasions, issuing limited quantities of products, and providing distillery tours (Mangwanda et al., 2021). Bundaberg Rum seeks to strengthen its relationship with its audience by showcasing its history, skill, and dedication to quality through these activities. Bundaberg Rum in future will grow into a robust brand concerning the other brands in this market which are also very famous and the products which are produced locally but their growth in the market will get confined and the rule imposed by the government of the nation based on the habit of drinking among people and this consequently leads to an impact on the performance in the market and growth based on sales (Ardyansyah et al.,2022).
There exist several opportunities for Bundaberg Rum such as entering into the markets which are running across the world, several new ways of distilling and also a wide variety based on the methods of marketing and branding their products. One of the significant opportunities is the introduction of a new flavour which will help to enhance the share in the market and along with this an increase in the trend of doing several events and parties will also add to the increase in the demand for the products.
Bundaberg Rum has been coming across several problems in terms of threats such as several famous brands that are becoming competitors for this brand which has been already sustaining and ruling in the markets and the entry of a new company such as Bundaberg Rum's goal is to expand the business in other countries. The beverages which are being produced should contain fewer calories and this has been their main purpose and the origin of competition among the brands in the sector of alcoholic beverages. There also exists an increment in the cost incurred for providing excellent service to their customers (Lagoudakis et al., 2020).
Chain actors, their roles and management practice
Bundaberg Rum mainly produces dark rum in east Australia as well as over 100 countries and it involves multiple non-alcoholic and alcoholic beverages. Hence, various members across the company value chain play essential roles and practices throughout the process. Bundaberg Rum has also built a strong relationship with its partners through the decades of their partnership significantly. Moreover, Bundaberg Rum has built a strong partnership with NRL (Apse, 2019).
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Figure: Members of Bundaberg Rum Value Chain
(Source: Arvier, 2021)
The value chain for Bundaberg Rum can be divided into several stages, each of which includes multiple participants who play different roles and carry out distinct tasks:
Raw material sourcing
Farmers of sugarcane: Grow and harvest sugarcane, the main source of raw materials for rum manufacture.
Providers of additional ingredients: Give the ingredients for fermentation and distillation, including yeast, water, and other components.
Production
Employees of the distillery: Supervise the fermentation and distillation procedures that generate rum.
The Bundaberg Rum's distinct flavor profile is created by the master blender through blending and aging.
Packaging
Workers who package completed rum goods are in charge of bottling, labelling, and packaging.
Marketing and Sales
The marketing department creates branding, advertising, and promotional plans to draw in customers.
Sales team: Provides stores, bars, and other establishments with Bundaberg Rum.
Distribution
Distributors and wholesalers: Make it easier for goods to get from the factory to retail stores.
Retailers: Offer Bundaberg Rum to customers via brick-and-mortar locations or Internet businesses.
Customer Service
Representatives of customer service should respond to questions, issues, and suggestions from customers.
Retailers and other customs
Bundaberg Rum is easily available through various retailers such as PepsiCo, Costco, liquor shops, and others (Høydal and Lysebo, 2021.). The retailers also ensured that Bundaberg Rum products were available in the stored temperature and had a wide range of stock in the supermarkets.
Mapping of cross-functional drivers
Understanding the important factors that contribute to the success of the brand requires the identification of the value chain's vital dimensions. Bundaberg Rum may need to meet certain criteria, such as:
To maintain a steady supply of sugarcane, quality monitoring is used in the acquisition of raw materials and the ability to preserve product quality through knowledge of fermentation and distillation processes (Aldana Heredia. and Caicedo Nárvaez 2021).
To stand out in a crowded market, use strong branding and marketing techniques.
A productive distribution network that guarantees product availability across different markets.
Initiatives to increase customer loyalty and involvement.
The process of finding the critical elements that allow several corporate divisions and activities to work together towards a common goal is known as "mapping the cross-functional drivers" of Bundaberg Rum. These motivators coordinate efforts and provide a consistent plan throughout the organisation.
Innovation and Product Development :
At Bundaberg Rum, innovation plays a key role in connecting many departments. To create new rum flavors or goods that appeal to market trends, the production team works in tandem with the marketing department (Atkinson et al., 2021). The product's appeal and marketability are ensured by this cross-functional strategy.
Quality assurance:
It is the responsibility of all functions to ensure product quality. Teams from production, quality assurance, and supply chain work together to uphold uniform standards. To maintain the brand's reputation for quality, marketing, and customer service teams also rely on this driving.
Supply chain management:
Purchasing, production, and distribution are all connected by the supply chain. To guarantee a consistent supply of sugarcane of the highest quality, effective manufacturing methods, and prompt delivery to retailers, cross-functional coordination is essentia (Nekaa, 2022.)l. Teams from the finance, production, and distribution departments work together to optimise inventory levels and reduce expenses.
Brand Management:
Customer service, sales, and marketing are all integrated by this driver. The branding team establishes the brand's personality, which is communicated through the packaging and advertising collateral. Sales initiatives support this image, and customer service fosters brand loyalty through pleasant experiences (Tran et al., 2021).
Sustainability Initiatives
Production, supply chain, and marketing divisions can all work together on sustainability. The brand's sustainability initiatives are impacted by the sugarcane source, manufacturing procedures, and packaging decisions. Collaboration makes sure that these programs reflect the ideals of the company and appeal to environmentally concerned customers.
Regulatory Compliance:
Legal, production, and quality assurance departments all participate in regulatory compliance. These activities work together to make sure that labeling and advertising adhere to legal requirements, and that production procedures follow industry norms.
Employee Engagement and Training:
In order to make sure that personnel are well-trained and engaged, HR, production, and customer service work together. While customer service directly affects brand perception, production crew skill has an impact on the quality of the final product (Waluya et al., 2019).
Constraints in the chain
Due to difficulties in sourcing, the supply chain for Bundaberg Rum was constrained. The limitation resulted from challenges in finding a reliable source of premium sugarcane, which is used as the main raw material for making rum. The quality and supply of sugarcane fluctuated due to changes in weather, agricultural practices, and market conditions (Jyoti and Singh, 2020).
This restriction had an impact on the entire value chain. The quality and uniformity of the finished product suffered because of the disruption of the production procedures. The market may experience shortages as a result of the disruption to distribution plans and inventory management. In order to ensure a consistent supply for customers, the marketing and sales operations encountered difficulties.
By collaborating closely with sugarcane growers, making investments in environmentally friendly procurement methods, and putting risk-reduction plans into place, Bundaberg Rum overcame this restriction. A more consistent supply of sugarcane was made possible because of the value chain's collaborative approach, which also improved the efficiency of the final product (Asrol et al., 2020).
Recommendation
Establish alliances or acquire sugarcane plantations to implement a vertical integration strategy. This lessens sourcing difficulties by ensuring a consistent supply of high-quality sugarcane. Bundaberg Rum maintains product consistency, gains control over manufacturing inputs and lowers external uncertainties by managing the raw material source directly. A sustainable, long-term solution to the value chain limitation is fostered by this novel strategy, which also improves supply chain resilience.
Considering the strength , of the brand of the company is robust. It will lead to an increment in the demand for the product and the growth of the brand needs to be focused by the company to higher the sales rate. It is required to bring modifications to their product based on the result of more research and development should be done on the product. The image of the brand will assist in selling the product and also bring an increment in the level of competitiveness because it has a higher reputation. Very famous companies give a very simple definition based on the products that are being manufactured and catering to the safety of their customers.Hence, the opportunity is that the several developing nations and the rate of growth is increasing and because of this price of the product is to be fixed following the rate of growth in the economy. Considering the process of development, the price remains low to fluctuate. On the other hand, companies that are spending too much time on the research and development team often fail to mention the price that has been decided for their product.
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