MGT610 Organisational Best Practice Case Study 2 Sample
Context
In Assessment 1 you reviewed an organisation’s current strategy, analysed its performance using 4 benchmarks, reviewed its main competitors, the business environment in which it operates, and identified its main weakness. The organisation now has an opportunity to address that weakness, and as such, solutions must be developed and assessed with a view of their holistic effects on the business’s long- term direction. This “future-proofing” assessment asks you to build on your understanding of benchmarking by developing options related to the opportunity for business improvement identified in Case Study Analysis; Part A. Your analysis should specify a range of benchmarks by which the organisation’s executive can track progress and/or measure the impact of changes. These options are intended to inform decisions made by executive management about the future direction of the organisation. As such, you should write a report for executive management that recommends a particular course of action and the benchmarks by which its progress and success can be measured.
Instructions
1. For the organisation selected in Assessment 1, Case Study Analysis; Part A you now need to present at least three (3) alternative options for the organisation over a period of up to five (5) years in response to changes to the external business environment.
2. From the 3 options, choose the one (1) option you believe will ensure the business’s long-term success, and,
3. Identify and recommend four (4) benchmarks you would use to ensure the organisation is maximising the benefits from the opportunity that this option presents.
PLEASE NOTE: Students who do not use the organisation selected in Assessment 1 will automatically fail the assessment.
Whilst the format may vary for your report, below is a suggested outline for you to follow:
• Cover page
• Executive Summary
• Introduction
o Outline the weakness identify in Assessment 1 and the associated opportunity identified.
o An updated SWOT, PESTEL and Competitive Analysis for the organisation and how they may affect the opportunity identified.
• Main Discussion
o Discuss and critically analyse the 3 options selected for the opportunity
o From the 3 options, discuss and justify the preferred 1 option that will ensure the organisation’s long-term success.
o For your preferred option, discuss and justify the 4 benchmarks that will be used to assess the organisation’s progress towards the preferred option?
• Conclusion
• References, including a minimum of five (5) academic references
• Appendices where applicable
You are encouraged to use tables, charts and images in your report. Please note that the cover page, executive summary, references, appendices, tables, charts and images do not form part of the word count.
Solution
Introduction
Bega Cheese is a food company based in Australia which provides diversified food products and has manufacturing sites in Victoria, Queensland and New South Wales. From Assessment 1, with the help of the analysis of the company, it has been seen that the company has many weaknesses which has the potential to have an impact on the organisation in a negative manner. University Assignment Help, The lack of research and development is one of the major issues for the company as their USP is to provide unique and innovative products along with high-quality. The other issue that the research in the previous assessment has reflected on is the fact that the net contribution and the profitability ratio is quite less based on the industry average. However, there are many opportunities which have been identified and the most notable ones are to incorporate online presence, introduction of new product range and expand their business in other countries.
The internal environment of Bega Cheese currently shows the strengths, the weakness and the opportunities as well as the threats which it faces which are seen to have a huge role to play in the business of the company.
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Table: SWOT analysis of Bega Cheese
Source: (Author)
From the above analysis, it can be seen that the Bega Cheese has many strengths which has helped the company in becoming successful. The annual report of the company suggests that the Beta category has seen a growth of about 13.6% and the market share of the company has increased to a good 30.9% (Begacheese.com.au., 2021). Research also suggests that the company has seen an increase in their export revenue of 14% which is $270 million (Begacheese.com.au., 2021). The company is also seen to have seen profits which can be seen in the Appendix.
These reflect on how the company has managed to work during unprecedented times and overcome the impact of the pandemic which majority of the organisations have faced. The company has increased their product mix. According to reports, Bega Cheese has purchased the London Dairy which indicates that it will have an increase in the product mix offered by the company and will include juice, yoghurt and fresh as well as flavoured milk in their business which was quite traditional (Becker, 2020). These are aspects which are going to have a positive impact on the organisation and help the company in enhancing their opportunities especially to introduce new products in the market.
The company is seen to have many weaknesses which can hinder the performance and the growth of the organisation. The company is seen to have experienced decrease in their overall revenue by 4.5% which is to $708 million (Begacheese.com.au., 2021). Bega Cheese has been in the limelight due to the wrong and ethical concerns. Reports state that Maurice Van Rynn, ex-boss of Bega Cheese has been sentenced because of the sexual abuse of a boy who was a teenager in the year, 2011 and 2012 (Sanda, 2019). It is the fresh charges against him have shed a negative light on the company as he was associated with the organisation during that time. Bega Cheese has been reported to lay off about 74 jobs at their factories in Bega Valley because of the low demand in the domestic market. This is seen to lower their production which can also have a huge impact on their business in the long run and also leads to them losing talented workers. The company also has lack of research and development which hinders the introduction of new and products which are currently in demand in the market.
It can be seen that there are many opportunities which the company needs to focus on which will help in boosting their sales and growth in the market. According to scholars, online shopping and the online market is in huge demand in recent times because of the convenience it provides to the customers (Paterson, 2019). Bega Cheese lack effective online presence in terms of their business in terms of online shopping as well as marketing. Establishing an online presence will help in leveraging the business in the long run. The business should also consider expanding their business in other countries in order to increase their profits. The other opportunity is to ensure that the company comes up with new products which will help them in gaining a competitive advantage in the market.
Apart from all this there are many threats which the company faces and among them the most important is the high competition in the market. This will lead to the company trying to come up with new and innovative products to gain competitive advantage in the market which Bega Cheese is failing to do which will also have a significant impact on the organisation.
The external environment of the business is also seen to have a significant impact on the organisation.
Political factors- Australia is considered to be politically stable country with laws which favour functioning of businesses. The country is seen to support businesses within the country however, if the organisation considers expanding their business in other countries they need to consider the laws of the countries in terms of business and the political stability in terms of corruption, impact of political parties and many more.
Economic factor- One of the primary features which may have an impact on the company from an economic perspective is the change in the inflation rate, tax rates and many more. Every organisation in the country are seen to be subjected to 30% of federal tax rate on the taxable income of the organisation and reports suggests that this is expected to reduce by 25% (PwC, 2020). It can be seen that this may have a positive impact on the organisation in the long run. However, tax rate in other countries may not be favourable for the country and might hinder the efforts of the company to expand their business in other markets. However, this may help in making the company invest in their product diversification and investing in other activities like growing online presence.
Social factors- The outbreak of the pandemic has led to the loss of many jobs and has led to the rise in the unemployment rate in many countries. However, the employment rate in Australia and many other developed countries is stable. Majority of the people in recent times are seen to focus on healthy dietary options (El Bilali et al, 2019). This may have an impact on the business as Bega Cheese has few healthy options in comparison to their competitor. However, this factor may help in encouraging the company to diversify their products in order to meet the demands of the customers.
Technological factors- Technological advancement have been leading to the operations of many businesses in recent times in order to gain a competitive advantage in the market. Bega Cheese is seen to turn to IoT in order to streamline the supply chain and also cut the costs. The company has been collaborating with many researchers at Software AG and Swinburne University of Technology in order to develop IoT-based services (Future Food Systems., 2020).. Thus, technological advancements can help the company in making more changes which may help in the growth of the company.
Environmental factors- Bega Cheese is seen to manufacture many of their products and thus, climate change in recent times may have a huge impact on the organisation. Reports suggest that drought as well as the softer demand for their exports have led to Bega Cheese issue profit warning on their earnings in the year, 2020 (Gray, 2019). Thus, it is important for Bega Cheese to come up with strategic decisions which may have a positive impact on the business.
Legal factors- Bega Cheese has been operating in the market for many years. The introduction of new laws in the business may have an impact on the market. It is important for the company to align with employment, discriminatory laws, trading, export and many other laws in order to thrive successfully in the market.
The competitive analysis of the market reflects on the competitive environment of Bega Cheese which they are currently experiencing.
Threat of new entrants- Research states that the food and beverage industry have been focusing on innovation and have been coming up with unique products which have been attracting customers (Bresciani, 2017). This indicates that the threat of new entrants is quite high as there is a huge market that can be explored. This can have a huge impact on the opportunity of the company in terms of growing their product mix and introducing new products in the market.
Power of suppliers- The power of suppliers is seen to be relatively moderate. It can be seen that there are various businesses in the food and beverage industry which makes the suppliers in high demand. It is important for Bega Cheese to ensure that they come up with effective strategies which will ensure that they have loyal suppliers with whom they do their business and can experience significant growth in the market.
Power of the buyers- The power of the buyers is seen to be quite high. In recent times, majority of the organisations are seen to come up with unique and healthy products which is currently in demand. It has been seen that most of the consumers look for the best value while purchasing products in terms of quality as well as the price. Thus, there is a constant pressure on the company to keep their prices low and provide value to their customers in order to gain a competitive advantage in the market.
Threat of substitute- The threat of substitutes for the company is quite high. It can be seen that there are many companies that have been introducing new and innovative products which have been catering to the demands of the customers. This indicates that the customers have an alternative to choose from and if Bega Cheese does not come up with innovative products then they might lose customers due to other available alternatives available in the market.
Rivalry among existing companies- Bega Cheese experiences high and intense competition in the market. The companies which have been giving stiff competition to the organisation are A2 Milk Company, Limagrain Ingredients, Prinova Group and many more to name among the few. It is important for Bega Cheese to incorporate strategies which will help them in gaining a competitive advantage over their rivals and gain a huge market share in the future.
Main Discussion
From the analysis of Bega Cheese from Assessment 1 as well as from the updated internal and external analysis as well as the competitive environment analysis, it can be seen that the company has many strengths and positive aspects which have been helping the company thrive successfully. However, there are many opportunities which the company should focus on which will help the organisation in growing successfully in the market.
Analysis of options
One of the major options which the company may consider is focusing on creating an online presence for the company. According to scholars, online presence of an organisation helps in creating brand awareness and also helps an attracting as well as influencing consumers to try their brand (Nechita, 2018). This will help Bega Cheese in gaining more customers which will help them in generating profits and more sales.
The other option which Bega Cheese may consider based on their opportunities is to expand their business in foreign countries. According to scholars, expanding the business in other countries helps in gaining a global presence and also helps a business in gaining more sales and profits (Povilaitis, 2018). This will help Bega Cheese in terms of growing their business as well as gaining profits. However, in order to expand their business, the company needs to invest heavy amount in terms of their production and also establishing business in other countries as well which can be challenging at this point by looking at their financial position especially because of the impact they have experienced due to the outbreak of the pandemic.
The third and the final option which Bega Cheese can incorporate based on the opportunity is to invest and focus on research and development in order to come up with new products and other product mixes which can help them in gaining a competitive advantage in the market. This has the potential of bringing them profits and helps them in flourishing their business if they cater to the demands of the customers in recent times.
Chosen Option Recommended for Bega Cheese
One of the major opportunities for Bega Cheese is investing in research and development in order to provide a diverse product range for their customers. From the analysis, it can be seen that the company has many competitors in the market and the threat of substitutes as well as the new entrants is quite high. The social factor from the external environment analysis also reflects on the fact that majority of the customers have been making changes in their lifestyle and the demand for healthy products and alternatives has been on the rise. Bega Cheese is seen to provide a limited range of products and if they invest in making changes in their product line by providing healthy dairy products then they will be able to meet the demands of the customers. It has been seen that the competitors of the company have been providing their customers with various alternatives which has been a positive aspect for their growth. In order to gain a competitive advantage over their existing competitors and the new entrants in the market, Bega Cheese needs to provide high-quality and unique products which are not provided by other companies and are not available in the market. This is considered to be the best option at the moment as meeting the consumer demands will help them in gaining customers, increase their sales and also give them the opportunity to grow and expand their business with the help of the positive reputation and the word of mouth.
Benchmarks To Assess Progress of Bega Cheese
The benchmarks which will help in assessing the progress of the company are the following:
Performance benchmarks- The performance benchmark will help Bega Cheese in acquiring quantitative data and will compare it with the previous data so that they can have an understanding of the growth of the organisation in terms of sales and the demand it creates among the customers.
Competitive benchmark- Competitive benchmarking is considered to be the process by which companies compare themselves against various competitors by using various metrics. Bega Cheese needs to incorporate this and compare their competitors in terms of sales and other aspects
Product benchmark- This benchmarking mainly refers to the points which are used for making comparisons of one’s products to other companies (Kolman, 2017). Bega Cheese needs to make comparisons of the product range, the quality, pricing and other aspects of their products to their competitors to ensure they are of better quality.
Internal benchmarking- Bega Cheese needs to determine best practices for conducting tasks and in this case their research and development and the production of their products which will help them immensely in gaining an insight to their capability in terms of providing their customers with high-quality product range.
Conclusion
Bega Cheese is considered to be among the successful companies. The updated internal analysis, external analysis and the competitive environment analysis reflect on the fact that introducing a new product line and range of products is one of the opportunities which the company needs to focus on and has a significant impact on this opportunity. It is thus recommended that Bega Cheese focuses on research and development in order to introduce healthier options so that they can meet the demands of the customers and gain a competitive advantage in the market which will help them in improving their sales and help them in gaining profits.
References
Becker, J. (2020). How a small dairy co-op grew to be a homegrown food heavyweight. Abc.net.au. Retrieved October 27, 2021. https://www.abc.net.au/news/2020-11-29/bega-cheese-success-story/12929978.
Begacheese.com.au. (2021). 1H FY2021 Results Presentation. Begacheese.com.au. Retrieved October 27, 2021. https://www.begacheese.com.au/wp-content/uploads/2021/02/1H-FY2021-Results-Presentation-Final.pdf.
Begacheese.com.au. (2021). Bega Cheese Limited, 2021 Annual Report. Begacheese.com.au. Retrieved October 29, 2021. https://www.begacheese.com.au/wp-content/uploads/2021/09/106401_Bega-Annual-Report-2021-Bega-Annual-Report_V23_Small.pdf.
Bresciani, S. (2017). Open, networked and dynamic innovation in the food and beverage industry. British Food Journal, 119(11), 2290–2293. https://doi.org/10.1108/BFJ-08-2017-0458
El Bilali, H., Callenius, C., Strassner, C., & Probst, L. (2019). Food and nutrition security and sustainability transitions in food systems. Food and Energy Security, 8(2). https://doi.org/10.1002/fes3.154
Gray, D. (2019). Bega Cheese shares tumble as NSW drought bites. Smh.com.au. Retrieved October 27, 2021. https://www.smh.com.au/business/companies/unprecedented-bega-cheese-shares-tumble-as-drought-issues-bite-20191029-p5358l.html.
Kolman, D. A. (2017). Why benchmark? Fleet Maintenance, 21(3), 14–14.
Nechita (Vingan), A. (2018). Online brand awareness. a case-study on creating associations and attachment. Journal of Media Research, 11(2), 91–111. https://doi.org/10.24193/jmr.31.7
Paterson, L. (2019). Online shopping drives demand for premises. I, 23, 23–23.
Povilaitis, V. (2018). 2018 business of camp: interesting trends and otherwise. The Camping Magazine, 91(5), 64–67.
PwC (2020) Australia, Corporate – Taxes on corporate income, Retrieved October 27, 2021.https://taxsummaries.pwc.com/australia/corporate/taxes-on-corporate-income
Sanda, D. (2019). More jail time for ex-Bega Cheese boss. The Canberra Times. Retrieved October 27, 2021. https://www.canberratimes.com.au/story/6118253/more-jail-time-for-ex-bega-cheese-boss/.
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