Murray Goulburn & Business Strategy

Question: Using your research, comment on the strategy within the company at the moment. What recommendations do you have? If the company carries out your plan, suggest at least four KPIs that would be useful at the company level. What individual KPIs would you set to align individual behavior with these company level KPIs? Answer: The company strategy and the recommendation Murray Goulburn is the primary partners of Australian dairy farmers that offer best milk price and best services. The companys strategy is to be one of the leading producers of dairy foods for the farmers and the consumers. The company aims to focus to achieve operational excellence by upgrading the operating capacity to become more competitive and to earn more profit for the enterprise. Since product innovation is a key to the success of the business, It focuses on innovation and to achieve the quality standard and attract more customer to ensure the client requirements are met. The company has taken a customer-centric attitude to focus on customers and continuously improving the product to get customer loyalty and generate value among customers. The company has shown innovation in retail, food service, ingredients nutritional and explores international markets to serve the consumers in a better way. The company has an efficient team that includes scientists, food technologists, nut ritionists, packaging experts to ensure the product will meet the highest standard. The research and development team is striving hard to develop the new strategy to improve the product quality to attract more customers to it, therefore, generating value for the client by offering better services which has given long-term sustainable growth. The companys vision is to be one of the dominant market players in Australian dairy industry to deliver the better return to the farm suppliers. The company has adopted competitive milk pricing strategy in Southern and NSW Sydney market regions. The south of the country has applied to a single milk payment structure with incentives that improve the growth in milk production. NSW- Sydney is focused on pasteurized dairy market which includes agreed milk supply and different pricing for milk components (Ferrell and Hartline 2012). Four KPIs Advertising and promoting the products via the internet and social media to make a global presence of the product The company should focus on building widely expanded distribution channel and active suppliers' chain It should formulate a strategy to increase the market share and tackle the competitors by creating the innovative, distinctive product and by keeping competitive prices. The enterprise should take a strategy to sell the product in grocery stores, department stores or small shops to increase the popularity and demand in the market (Berthon et al.2012). Comment on strategy of shifting from commodity product to value added dairy product The food service delivers standardize dairy products across Australia. They have tie-ups with the educational institute, hotels, cafes, airlines, hospitality industry and various Government agencies. They are one of the leading suppliers of supermarket and retail segment to supply quality food to maintain the standard and customer requirement. Murray Goulburn Qingdao Dairy is the first manufacturing unit outside Australia which is established in 2007 which provides fast access to the market. It has manufacturing facilities to produce infant nutrition products under Natra Start which is distributed in China using a large distribution channel. They have developed the product based on the knowledge and skill they have gathered from dairy processing in the last 60 years. It uses the dairy ingredients from milk supplied by the farmers hence the firm has taken diversification of the product in the same product line which has helped to increase the market share for the company. A recent sur vey has revealed that its net profit will be between $66 million and $86 million. It further asserts that the overall sales will bring a $500,000 business in the current financial year. As far the international presence is concerned it is the largest brand in China and one of the biggest powder brands in China. The company has ensured the higher return on investment around 10- 15 percent return on investment. At present, it has 7-8 percent return on investment. Consequently, the company has paid an interim dividend in the current financial year. The company has got growth and secured its position in the market; notably, it has increased market share in Asia, US, China substantially (Morgan et al. 2012). It has grown the milk supply in European countries that has resulted from the oversupply of dairy product which has reduced the prices. So it has taken a strategy to shift towards producing products maintaining the higher profit margin, more value addition to fulfilling consumer needs and services. The strategy has helped the company to enhance revenue in a competitive market. It demonstrates companys ability to deliver high end value added services with competitive prices, therefore, creating maximum value for customers. The sale of a dairy product of Devondale has increased by 28% from the various types of product such as milk powders, dairy beverages, chilled milk. The sale of consumer milk product rose by 21 % by a widely distributed network and the high demand of the branded product of Devondale. Where the market for a dairy product is increasingly challenging the company has retained the expected standard to deliver the product by adopting product mix strategy to create variati on in the product. Devondale has three primary product under dairy food and nutritional category which has marked its shifts from commodity product to dairy product to increase profit and revenue. Laverton is selected for investment (estimates around $165-$190 million) for the new dairy beverages center which is located adjacent to the current milk producing center which aims to deliver excellent packaging facility, dairy products to fulfill the Asian market demand and the increasing demand of domestic and international customers. The investment will significantly improve the operational capability and flexibility (Leonidou et al.2013). Directors role and responsibility of the company The company consists of nine directors that include seven supplier directors and two individual directors. The role of the board of director is to represent the shareholders as whole to promote Murray Goulburn Co-operative Co. Limited. The Boards primary objective is to enhance shareholders value, which is maximizing the companys returns at the same time. The board is accountable to the stakeholders for companys performance. The directors have brought excellent expertise in finance and in international business to take a business to the next level of growth and excellence. MG has appointed Ms Kiera Grant in 14th March 2016 as an independent non-executive director who has worked in board and in management having 15 years of experience in equity capital market and has wide variety of skill from agricultural, retail, fast moving consumer goods is a significant asset. The company has appointed Albert Moncau as an executive General Manager of dairy products and reporting to the managing director Gary Helou. In addition to that, Mr Moncau is appointed to join the leadership team for marketing and innovation for sales and international business who has helped the company to expand the businesses in Eastern Europe, Middle East and Africa. Philip Tracy and his fellow directors has restructured the Murray Goulburn board and has brought major transformation of the business that has identified $500 million investment programs for the next five years, while will help to gain efficiency and reduce the cost that is more than $100 million. The board has formulated a strategy to develop high end products and has taken decision to improve the co-operative through its takeover of Warrnambool Cheese and butter (Morgan et al. 2012). Reference List Berthon, P.R., Pitt, L.F., Plangger, K. and Shapiro, D., 2012. Marketing meets Web 2.0, social media, and creative consumers: Implications for international marketing strategy.Business horizons,55(3), pp.261-271. Ferrell, O.C. and Hartline, M., 2012.Marketing strategy, text and cases. Nelson Education. Leonidou, L.C., Katsikeas, C.S., Fotiadis, T.A. and Christodoulides, P., 2013. Antecedents and consequences of an eco-friendly export marketing strategy: The moderating role of foreign public concern and competitive intensity.Journal of International Marketing,21(3), pp.22-46. Morgan, N.A., Katsikeas, C.S. and Vorhies, D.W., 2012. Export marketing strategy implementation, export marketing capabilities, and export venture performance.Journal of the Academy of Marketing Science,40(2), pp.271-289.