Global Strategy and Sustainability Assignment sample
Part A- Business Report
Task 1- The external and internal environment
External Environment
Pestle Analysis
| Dimensions | Factors | Impact |
| Political |
|
Neutral |
| Economic |
|
Positive |
| Social |
|
Positive |
| Technological |
|
Positive |
| Legal |
|
Positive |
| Environmental |
|
Positive |
Table 1: PESTLE Analysis
(Source: Created by Author)
Justification
The findings have defined that the restriction in New Zealand dairy farming can have a neutral impact on Frontera through determining its business productivity. Dairy industry in New Zealand can have a positive impact through Fonterra’s environment in terms of increasing sales volume and job opportunities. It can create a positive impact on Frontera through influencing purchasing decisions of their customers. For instance, dairy firms have determined dairy shed feeding to evaluate performance assessment for better review engagement. The evaluation of dairy firms can evaluate a productive aspect for Fonterra through utilisiing its various marketing performance objectives. It can also integrate better determination of priorities that can be evaluated through managing performance review integration. Dairy shed feeding can have a positive impact on improving technology formation in Fonterra for integrating its business production. Food Act 2014 can have a positive impact on the company through evaluating its performance standards. The core evaluation of Resource Management Act 1991 can also help managers of Fonterra to maintain improved productive performance which can also lead to the improved directional process objectives. National Environmental Standards for Freshwater 2020 set out regulations to improve the quality of freshwater bodies in New Zealand.
Porter’s Five Forces Analysis
| Dimensions | Factors | Impact |
| Bargaining Power of the buyers |
|
Low |
| Bargaining Power of the suppliers |
|
High |
| Threat of new entry |
|
Low |
| Threat of Substitutes |
|
High |
| Competitive rivalry |
|
High |
Table 2: Porter’s Five Forces Analysis
(Source: Created by Author)
Justification
The findings have revealed that Fonterra’s bargaining power of both the buyers and suppliers have low and high risks respectively due to the increased demand value of production and decreasing productive operations. Threat of new entry can create low risks upon Fonterra market share and market performance due to the presence of established players of Fonterra Ingredient Ltd and Open Country Dairy Limited (DNB, 2024). Threat of substitutes can create high risks for Fonterra to reduce its price segments and production costs. Competitive rivalry can also become a threat in terms of creating high risks for the company through leading it towards ineffective business production and management regulations.
Internal Environment
Value Chain Analysis
| Support Activities | ||||
| Human Resource Management | ||||
| Innovation Production | ||||
| Primary Activities | ||||
| Inbound Logistics | Operations | Outbound Logistics | Marketing and Sales | Services |
| Raw milk export | Processing and warehouse inventory | Distribution of raw dairy | Advertisement production | Production and management |
Table 3: Value Chain Analysis
(Source: Created by Author)
Justification
In terms of support activities of Fonterra, the company has focused upon the human resource management and innovation production. The inbound and outbound logistics focus upon the raw milk export and processing and warehousing inventory. The process of managing distribution of raw dairy products has driven through supplier integration (Fonterra, 2024). Advertisement production along with production and management plays a crucial role to improve production efficiency.
VRIO Analysis
| Factors | Valuable | Rare | Imitable | Organised | Competitive Advantage |
| Global Distribution Network | Yes | Yes | No | No | Sustainable competitive advantage |
| Innovation capabilities | Yes | No | Yes | Yes | Sustainable competitive advantage |
| Access to NZ’s milk supply | Yes | No | No | No | Sustainable competitive advantage |
Table 4: VRIO Analysis
(Source: Created by Author)
Justification
Fronterra has a global distribution network through adding value to efficient supply chain management. String innovation capabilities of the company has improved its product portfolio to meet consumer demands for staying ahead in the market. Access to NZ’s milk supply cannot be initiated by other competitors due to its source of premium ingredients (Fonterra, 2024). Therefore, VRIO analysis has driven knowledge productivity to improve its production success.
Task 2- Strategy in the global environment
Motives for Fonterra’s international expansion
Fonterra’s governance structure is reflected upon the cooperative construction to mediate stakeholder engagement. The core motive of international expansion of the company can focus upon its strategic freedom to evaluate fund capacity expansion, in context to determine Uppsala’s model of internationalisation, it can be stated that revised capital structure in countries of Africa, Europe and Middle East can lead to improved supplier engagement for better production variety. Uppsala’s model of internationalisation determines expansion of business through integrating process extension capabilities to improve production efficiency (Liesch and Welch, 2021). Applying the theory can become productive for the company to improve supplier trade and productive performance relations in order to improve the business validity. Therefore, utilisation of Uppsala’s model can become effective for the company to control investment process and raise capital for improving business commodities. For instance,
Strategic options of internationalisation
Strategic options of internationalisation determine multidimensional emphasis to achieve efficiency. As opined by Demir et al. (2021), strategic options of internationalisation determine agility integrity for performance association. For instance, strategic business options which can become effective for Fonterra include joint ventures, outsourcing as well as strategic alliances. In this aspect, the theory of network model can be used in Fonterra in order to determine capital flows and revised supply performance to improve the performance production. Shi et al. (2021) opined that Network Theory Model demonstrates network quality engagement to evaluate progressive performance. Application of the model can be used for Fonterra to leverage local expertise performance for better productivity in expanding into the markets of Europe and Africa. In context to the most suitable internationalisation process, the company can focus upon utilising joint ventures. Joint venture is considered as a systematic integration to improve firms’ agility and performance through improving its overall production and efficiency (Debellis et al. 2021). For instance, managers of Fonterra can leverage joint ventures through utilising distribution into the markets of Middle East and Africa. Therefore, by utilising strategic options for internationalisation, the company can improve productive performance through integrating business performance for valuable potential market management.
Three Entry Strategies
Direct Investments
Direct investments for Fonterra can regulate the type of investments which are used to evaluate FDI flows and performance directions. As opined by Nguyen and Ahmed (2023), direct investment refers to the advanced inflows to regulate productivity in different countries. For instance, Fonterra can focus upon managing capturing market value through utilising both benefits and investments. The most productive way would be to utilise greenfield investments to tailor business operations for managing local market conditions. Therefore, evaluation of direct investments can bring a productive path to improve rapid market entry and manage a huge customer base.
Joint Ventures
Joint ventures of Fonterra can revolve around the process of partnering with other companies to bring strategic performance validity within target market. As opined by Sestu and Majocchi (2020), joint ventures types of business evaluate subsidiary firms through integrating transaction cost perspectives. For instance, managers of Fonterra can focus upon partnering with local expertise to improve knowledge market and distribution access. Therefore, utilisation of Joint ventures can pave a path for the company through implicating partnership resources and improved capabilities.
Licensing
Licensing of Fonterra can involve the process of granting the rightful usage of intellectual properties and other aspects of technology and brand market management. As opined by Smallbone et al. (2022), licensing determines a sophisticated arrangement to bring upon productive market and segmentation. For instance, Fonterra managers can regulate expansion of the market to improve upfront investment for managing operational involvement. Hence, determination of upfront investment can become productive for the company through enhancing its distribution channel and market reach.
Task 3 – Corporate Strategy
Horizontal Integration
Horizontal integration of Fonterra can involve the process of merging and acquiring with competitors to evaluate market operations within business. As opined by Kauffman (2020), horizontal integration evaluates the change of manufacturing to increase speed of business adoption. For instance, Fonterra can focus upon consolidating the market to expand product portfolio and increase the overall market share. Horizontal integration can also allow the company to add new dairy products to its portfolio that can enable diversification. Consolidating productive business and resources in terms of Fonterrs can also become significant to manage economies of scale and reduce the overall costs and improve efficiency (Wood et al. 2021). Therefore, evaluation of horizontal integration can help the company towards leading to the improved market position overseas to achieve competitive advantage.
Vertical Integration
Vertical integration Of Fonterra can refer to acquiring supply chain process engagement or better productivity performance review. As opined by Bulturbayevich (2021), vertical integration evaluates innovative entrepreneurial activities through social value product creation. For instance, managers of Fonterra can partner with other New Zealand based dairy companies to ensure a reliable supply of high-quality milk. It can provide allowance to customers to determine a better control over product distribution and market access. In context to evaluate forward integration, the company can also integrate with retailers to manage product distribution into overseas markets. Therefore, evaluation of forward and backward integration for Fonterra can pave a path for the company to improve its market access and customer relationship.
Strategic Alliances
Strategic alliances of Fonterra can revolve around a focus of managing partnership to influence business review regulations. As opined by He et al. (2020), strategic alliances can evaluate firm performance through integrating strategic transformation of digital engagement. For instance, Fonterra can focus upon partnering with local distributors in New Zealand to drive innovation and develop new products. Utilisation of strategic alliance can become effective for Fonterra that can be driven through managing firm performance for better partnership evaluation. It can also lead to the core amangemnt productivity and performance assessment to regulate influencer collaboration with different dairy firms. also be assessed through combining resources, knowledge and expertise for better work management performance. Access to new markets and capabilities can also help the firm to improve market operations and expand to productive partnership validity.
Outsourcing
Outsourcing of Fonterra can regulate a determination of delegating business processes to manage vendor service performance. According to Charles and Ochieng (2023), outsourcing determines a process of evaluating for performance through assessing innovation performance. For instance, Fonterra can focus upon determining outsourcing and innovation to leverage expertise of productive performance. Expertise of productive performance for Fonterra can also pave a great path to implicate better business resolution basing upon the careful vendor selection. The evaluation of careful vendor selection can also integrate a productive way for Fonterra to manage outsourcing capabilities for better performance review. It can also manage evaluation of packaging and rebelling that can lead to the improved technology for productive market review performance in order to utilise market performance review for Fonterra. Additionally, packaging and labeling can also help the company to improve cost effective competencies for better technology service production benefits. Outsourcing can also help the company to access specialised expertise and manage a careful vendor selection process for productive distribution of milk. Therefore, evaluation of outsourcing can help the company to improve the market knowledge in order to achieve competitive advantage of business performance.
Task 4 – Strategic Purpose – Ethics and CSR
Fonterra’s CSR strategy and recommendations
The CSR strategy of Fonterra involves a comprehensive plan that organisations use in designing, executing as well as analysing the initiative of corporate social responsibility. As stated by Hayes et al. (2022), CSR strategy involves specific areas of focus communication and promotion approaches along with evaluation procedures. For instance, Fonterra has been keeping a focus on increasing sustainable futures that can safeguard the well-being of people along with the farmers along with their animals involved in protecting environment regeneration. Accordingly, this approach has been emphasised by Fronterra upon creation of a sustainable future that can achieve a healthy environment for the society as well as farming by Fonterra (Fonterra, 2024). The approach has been further keeping a focus upon creating a sustainable future in achieving a healthy environment for the society as well as farming.
Figure 1: Carroll’s Pyramid
(Source: Rahardjo and Kurniawati, 2023)
Carroll’s CSR pyramid can involve Fronterra in expanding its definition by incorporating the shape of a pyramid in depicting the significance of each CSR dimension. In terms of incorporating Carroll’s CSR pyramid Fonterra can emphasise upon the management of its economic responsibility in signifying its presence within the market as well as production of its product within the supply chain. The core legal responsibilities that the organisation Fronterra can keep focus upon involve standards of quality safety of food as well as complying in the assessment of sustainable management as well as productivity. Additionally, considering the management of philanthropic and ethical responsibilities the organisation Fronterra can make a high investment in community engagement and educational activities that can promote the practices of sustainable farming as well as conservation of biodiversity.
Ethical issues
The ethical issues within a business such as Fronterra take place but an activity decision or a scenario creates conflicts with the ethical standards of the society of the organisation. As a result, the ethical issues result in decreasing the operational performance of a company due to the obedience of ethics within business (Salama et al. 2020). Some of the significant ethical issues that have been currently impacting the organisation of Fonterra are environmental sustainability issues, animal welfare issues and improper product quality and safety. The organisation has been going through issues related to animal welfare due to its milk scandal leading towards a decreased market production of its products. Additionally, Fronterra also has been going through challenges related to its product quality due to an infective coordination within its business supply chain. Fonterra also has been facing significant challenges as the company involves discharging nitrogen heavy water within its “ghost firms” (Hancock, 2021). Therefore, these issues have been impacting the sustainable performance of its business. The organisation also has been facing significant issues in monitoring consumerism of its performance in the market that impacted the health and trust of several consumers.
Recommendations
Some of the significant recommendations for Fonterra mitigation of ethical issues can involve stakeholder collaborations and enhancement of employee engagement. For resolving the challenges related with animal welfare Fonterra can emphasise in engaging with the farmers with an incorporation of collaboration with the stakeholders in the industry. The company can also maintain high measures of quality control by incorporation of regular adherence towards the regulations of food safety. As stated by Haryono et al. (2020), providing training to the employees can significantly enhance business performance. Therefore, focusing upon practices of strong corporate governance as well as incorporating mechanisms of accountability can regulate the performance of stakeholders in improving the market practice of the organisation.
Conclusion
It can be concluded that the CSR strategy for the organisation Fronterra includes a comprehensive plan for execution of the CSR initiative. Accordingly, Fonterra has been that the CSR pyramid of Carroll can assist the organisation of Fonterra in the economic, philanthropic and ethical responsibilities of its business. In this aspect the company has been going through several ethical issues related to animal welfare and improper product quality. As a result, recommendation for the organisation in mitigation of the identified issues involves collaborating with the state holders as well as enhancement of employee engagement. This also involves the company in practising sustainable farming that can lead to the conservation of biodiversity.
Part B- PowerPoint Presentation
Agenda
The agenda of this present study involves evaluation of the strategic business of Fronterra within Middle East, Africa and Europe by evaluation of the regulations related to market productivity.
Suitable stakeholder management model
- Mendelow’s matrix assesses the performance of the stakeholders based upon power and interest regulations.
- As stated by Vasylieva and Davlikanova, (2020) Mendelow’s matrix leads in the classification of stay engagement for recognising powerful business performance.
SN: Fronterra can keep up focus in understanding the requirements of stay holders for expanding within Europe and Africa.
External Stakeholder
- The significant external stakeholders of a business are considered to be customers.
- The customers as stakeholders within organisations can create a direct impact on its growth as well as success (Gil-Gomez et al. 2020).
SN: The customers can play a significant role in the internationalisation process of Fronterra within Europe.
Internal Stakeholder
- The internal stakeholder within an organisation can be considered to be suppliers who can be effective for Fronterra.
- The suppliers play a significant role in the enhancement of innovation within a business (Distanont, 2020).
SN: Fronterra can emphasise timely production of its product for which it can incorporate practice base responsibility that can also improve the industrial standards.
Recommendations
- Making a high investment in employee training programs can assist in enhancing the decision making process.
- Providing training to the employees can also enhance employee engagement (Saks, 2022).
SN: Fronterra can provide training to the employees that can make them up to date regarding the latest knowledge within the market.
Conclusion
It can be concluded that the stakeholders are a significant part within the process of business internationalisation and also determines the business market performance. The identification of internal and external stakeholders through Mendelow’s Matrix as a result can lead towards an effective productivity of businesses.
References
Part A
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Charles, M. and Ochieng, S.B., (2023). Strategic outsourcing and firm performance: a review of literature. International Journal of Social Science and Humanities Research (IJSSHR) ISSN 2959-7056 (o); 2959-7048 (p), 1(1), pp.20-29.
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Part B
Distanont, A., (2020). The role of innovation in creating a competitive advantage. Kasetsart Journal of Social Sciences, 41(1), pp.15-21.
Gil-Gomez, H., Guerola-Navarro, V., Oltra-Badenes, R. and Lozano-Quilis, J.A., (2020). Customer relationship management: digital transformation and sustainable business model innovation. Economic research-Ekonomska istraživanja, 33(1), pp.2733-2750.
Saks, A.M., (2022). Caring human resources management and employee engagement. Human Resource Management Review, 32(3), p.100835.
Vasylieva, T.A. and Davlikanova, O.B., (2020). Formation of the Domestic Dual Studies Pattern and Superposition of Stakeholders–the Case of Ukraine.
