Strategic Planning and Operating Environment †MyAssignmenthelp.com

Question: Discuss about the Strategic Planning and Operating Environment. Answer: Introduction: Diary Product Producers is the new company in the dairy industry and it is improving its business gradually. The company is basically operating in the country Australia and the environmental factors of the Australian market affect the business operations of the company. it is important for the company to analyze the environmental factors effectively for the growth of the business. By the environmental analysis, Diary Product Producers will be able to understand the needs of the customers along with the existing competition in the market (Palmer, 2012). First analysis for the company is SWOT analysis that includes strength, weakness, opportunities and threats of the company in the business operations. SWOT analysis for the company Diary Product Producers is as follows: The company is helpful directly in improving the crop production level by providing cash income and drought power on daily basis. The company is providing employment to the population in rural areas especially women. By the production of dairy products, there is the regular income for the farmers. Core strength of the company is the continuous inspection, laboratory testing and monitoring along with the upgraded staff. The company is engaged continuously in house research and development. The company provides best quality of milk and dairy products to the customers that are the key strength of the company. Apart from the success, there are some weaknesses also in the company. Sometimes Diary Product Producers has to face the problem of the supply of raw material. Along with this, the feed availability for the cattle is not proper throughout the year. Further, there are no proper animal healthcare activities in the company. There is poor infrastructure in some areas to transport rurally-produced milk to the major processing centers. There is high demand of nutritious food in the society which is the big opportunity to expand its business. Government is also encouraging people to use dairy products in their daily lives. The increasing knowledge among the people about getting healthy food is also an opportunity for the company to grow in the market (Brodie, Brookes, Little, 2009). Natural climates such as drought, flood, and disease can affect to cattle and this can be a big threat for the company. Further, like all the industries, there is also strong competition in the dairy industry. Diary Product Producers is the new setup so it is going to be very difficult for the company to establish itself in the market. Further, seasonal fluctuations in milk products can also affect the business of company (Mullins, 2010). Porter five forces In the dairy industry, there are various restrictions and barriers imposed by the government to get entry in the industry. But for the company Diary Product Producers, the barriers to entry in the industry are relatively high. In the market, it is very difficult due to economies of scale in the manufacturing and distribution costs. For the mass production of the dairy products, there is the need of high capital so, for the small company it is going to be quite difficult at the national level. In the dairy industry, there are good substitutes available and many new products are developed by various companies. The availability of substitute products is increasing strong competition and pressure for the new companies in the industry. In the milk and dairy industry, the customers or end users always switch towards the low cost products so they give preference to the substitute products. So, the competitive pressure from the substitute products is stronger in the industry (Johnson, Whittington Scholes, 2011). In the dairy industry, the demands and requirements of the customers are growing continuously so, the competitive rivalry in the company weak in the industry. In the dairy industry, the buyer cost to the switching brands is relatively low. So, these affect the company strongly in the dairy industry. The switching cost of the buyers on the substitute products and brands is comparatively low so, the bargaining power of the buyers in the industry is high. Customers in the dairy industry are strongly affected by the disposable income and economy. When the disposable income of the customers declines, they start to purchase cheaper products. On the other hand, if the disposable income of the customers is increasing, they start buying more expensive products (Taylor et al, 2012). Along with this, customers in Australia are now becoming more concerned with the health issues due to the food consumption. The health awareness of the customers affects the companies and their sales. So they have to follow the rules and regulations imposed by government (Halbert Ingulli, 2011). Bargaining power of suppliers There are many suppliers of the milk product who are ready to supply the products in the market. So the bargaining power of suppliers is weak in this industry. In the dairy industry, the seller switching cost to the alternative suppliers is relatively low. So, the bargaining power of suppliers is weak in the industry and it directly affects the company. In the industry, the inputs of the suppliers are available easily so the suppliers bargaining power is relatively low in the industry (Cannon Homburg, 2008). Diary Product Producers is basically dealing with the three dairy products i.e. Full cream milk, Lite milk and Chocolate flavored milk. By analyzing the give financial, marketing and sales reports, it is analyzed that there are some gaps which are needed to be filled by the effective strategies. The gaps in the business are based on the sales, products and performance of the company. It is stated above that Diary Product Producers produces three main products i.e. full cream milk, Lite milk and Chocolate flavored milk. To get success in any business, it is important for the company to provide quality products and the success of any products depends upon the ratings given by the customers in the market. if any product is performing low, then there is the need of effective strategy to improve the performance. The product Chocolate flavored milk has got 50% rating from the family segment. On the other hand, full cream milk, Lite milk have 60% ratings. In case sales of the three products, it is analyzed that as compared to full cream milk, Lite milk, the sales of Chocolate flavored milk is quite. In the segment sales, families prefer full cream milk for the consumption. In this segment, sales of Chocolate flavored milk are very low. In the segment of wholesalers and distributors, there is no sale of Chocolate flavored milk. It means, this product of the company is not so much preferred by the customers. There is the need of improvement and strategy to analyze the actual problem with this product. By analyzing the business performance of the plant 1 in Diary Product Producers, it is observed that the company is operating basically in three products i.e. Full cream milk, Lite milk and Chocolate flavored milk. The gross profit of the company is $338,722.36 in which the product Lite Milk is performing well with the $1, 60,000. The product Chocolate flavored Milk has less profit as compared to other tow products. So, there is the need to improve its performance by adopting some strategy so that some innovations can be done (Srensen, 2012). Business objectives The objective of Diary Product Producers in the dairy industry is to carry out the business activities for the economic development of the company by producing dairy and milk products efficiently within the processed form in the market. The strategic objective can be achieved by the centralized marketing, centralized purchasing and pooling the milk effectively. The aim of the company is to provide quality milk, milk products to the customers at the affordable price (Rothaermel, 2013). In this strategy, Diary Product Producers should focus on the sakes of Chocolate flavored milk as it can be seen that customers do not prefer this product. So the proper support would be required tom improve the sale for particular product. Company should make aware the customers for that product whose sale is low as compared to other products. New suppliers and new places are needed to distribute Chocolate flavored milk to more customers. The positive sales can be achieved by developing new offers for the customers (Carpenter Fairhurst, 2009). In the business level strategy, Diary Product Producers should identify the strategic priorities for the business operations. Company should set qualitative and quantitative KPTs to measure the business. Company should analyze the business process to deal with various issues. For the business development, the company has to focus on the collaboration with various countries. The company will has to consider various issues such as local supply chain, country of operation, reviewing policy and programs and environmental rules and regulations (Ghobadian, 2008). In the functional level strategy of Diary Product Producers, the company should adopt proper marketing mix for the products which are to be offered to the customers. For the company Diary Product Producers, the long term marketing strategy can be implemented by the proper planning and effective marketing mix. Diary Product Producers is the brand offering milk, milk based products and food items in Australia. The products of the company are categorized in the different favor of milk i.e. Full cream milk, Lite milk and Chocolate flavored milk. These brands of the milk cover the product strategy in the marketing mix of the company. The company should bring more dairy products for the customers. The prices of the milk products are affordable so that anyone can afford easily. The company should use penetrative pricing strategy to attract the customers. Along with this, company should maintain the differential pricing strategy to deal with the competitors. The company has high price of Chocolate flavored milk as compared to other products and this product is not so much preferred by the customers. This can be due to high price of Chocolate flavored milk. So, company should drop down the price to improve the sales (Gebauer, 2008). In the dairy firm, distribution is the important part of the business so company should focus on the various regions of the country. To save the middle men costs, the main suppliers of the company should be farmers and cooperatives. The company should try that the customers can find the milk products very close to their homes to build customers loyalty and preferences. For the effective promotion, company should use TV commercials and radio advertisements. Company should also tie up with the cashless payment companies like Paytm and UPI to cover the entire marketing mix (Alvarez Casielles, 2008). The aim of then discussed strategy for the Diary Product Producers is increase the market share by providing best quality of milk products to its customers and to build the trust for long term. Core objective of the company by strategy implementation is to maximize the profit. The strategy for the company includes paying best prices to the farmers for their work rather than making profit. So, some strategies adopted by the company are focused approach, common branding, product differentiation, smart marketing and product development and assured quality. Action plan and recommendations For the success of Diary Product Producers, the action plan for next five years is described below. The objective of this action plan is to focus on the high returns, achieve goals, and set the timeframe for the business activities. To achieve greatest possibility of success and greatest return, this action plan should be very effective e for the Diary Product Producers (Wheelen Hunger, 2011). The action plan for the company Diary Product Producers are as follows: Category Activity Month Cattle nutrition and feed Identify various feed concentrate manufactures with which the company should improve the nutritional value and cost effectiveness. May- September 2018 Milk quality Engaging producers in the hygiene and milk preservation process to improve milk quality. Improving support services such as testing laboratory, and veterinary service provides. October- December 2018 January 2019 Finance and investment Encouraging proper financing to produce high quality products and improving milk production in terms of quantity and quality Supporting farmers to get crops and focusing on transportation and processing equipments February-May 2019 June December 2019 Association development Promoting the development of dairy production in the country by working with various collaborations (Munksgaard et al,2012) January- May 2020 Recommendations To get positive growth and success, there are some recommendations for Diary Product Producers which must be adopted by the company along with implementing the action plan in the business activities. Company should look outward by monitoring and evaluating the performance of the products at the local and global level. Company should actively innovate and invest in the technologies to deliver nutrition and improve long-term economic value. Company should cooperate transparently and actively in the supply chain to add value and build trust. Company should focus on building skills and talent to make a culture of continuous learning and improvements. Company should focus on the engaging the customers to communicate effectively, listen to them and to involve them in the business related activities especially on nutrition. Further, company should also focus on minimizing the negative environmental impact for the commercial success. At last, company should on improve animal welfare to improve the standard and welfare of the dairy cow. References Alvarez, B. A., Casielles, R. V. 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