Arnott

Market and Competition

Discuss about the Business Solutions of Arnott's Biscuits Limited.

“Arnott's Biscuits Limited” is Australia's biggest maker of biscuits and bread rolls and the second-biggest provider of snacks. It is a backup of the Campbell Soup Company of the United States. Since 1997, Arnott's has put more than $400 million in Australian zonal offices, incorporating $40m in a completely computerized biscuit pressing line at the Virginia Bakery, which is one of the biggest automated establishments of its compose in the world. Arnott's fares keep on growing, with the Australian-made biscuits now being transported to in excess of 40 nations around the globe including Japan, the USA, Canada, United Kingdom, Indonesia, Tahiti and New Zealand (CAMPBELL SOUP CO. 2018).. Arnott's, in a similar manner as the lion's share of Australian biscuits producers, worked basically in its home state, New South Wales, however has fabricating plants in Virginia, Queensland (makes just plain, cream and flavorful bread rolls) and Shepparton, Victoria. In the 1960s, a progression of amalgamations and acquisitions in the Australian market brought about the production of the Australian Biscuit Company Pty Ltd. This included Arnotts and different organizations, for example, Arnott-Motteram and Menz in South Australia, Brockhoff Biscuit Co. also, Guest's Biscuits in Victoria, and Mills and Ware Ltd in Western Australia. The Australian Biscuit Company was later renamed Arnott's Biscuits Pty Ltd (CAMPBELL SOUP CO. 2016).

In case of biscuit manufacturing companies, the competition is widespread. There are numerous manufacturers from large scale to small, that are present in the market, all offering different flavors and varieties of snacks according to the taste preferences of the consumers. Recently, Arnott’s biscuits faced heavy backlash from its loyal consumer base as well as other buyers for suddenly bringing about a change in its packaging, shapes of biscuits as well as the flavors. Many consumers protested about this sudden change in social media as well as on different platforms. Although this decision was implemented by the company to bring about a change in its overall outlook and design of products, as well as providing the same flavors in a more healthier way. However, this decision has led to the loss of a large number of loyal consumers who after the event of change have shifted their preference to other brands.

Arnott’s biscuits faces three main competitors who are Kraft Foods Ltd., Goodman Fielder Ltd. and Griffin Foods Ltd. Out of these three, Kraft Foods has proven to be the strongest competitor for the company as it is present in all the markets that Arnott’s is present in (Bogers, Hadar & Bilberg, 2016). The popularity of international brands is on the rise as well and poses as a serious threat to the company. Arnott’s Biscuits is focused with conducting business in Australia only and has very little market presence outside Australia. Lastly, the products that are manufactured by the company are expensive and can easily be replaced by cheaper products. Therefore, the company is in need of retaining its loyal consumer base, maintaining its competitive position in the market and also in need of expanding its area of business operations outside Australia as well all of these ultimately leading to an increase in the sales figures and revenue generated.

Proposed Strategies and Innovations

Business problems that arise in the company has to be dealt with innovative solutions. The highest body of the management is dedicated to brainstorm ideas that will help in resolving the problems, increase revenue and expand business. The first strategy that is to be implemented is to inform the Australian consumers that the company cares about their health and safety (Weiss, 2016). The company through various innovative strategies needs to inform the consumers that the change it has brought in the design of the shapes of the biscuits as well as its flavors is so that its products are more healthier for consumption, especially for children, since the company’s primary consumer base is targeted towards children. Animal fats have been replaced by vegetable oils and this can be effectively informed to the general public and would help bring back the consumers that have been lost or potential consumers.

Apart from this, the company needs to rethink the pricing of its products as it would allow it to compete with other brands that provide biscuits and snacks at cheaper rates. Arnott’s biscuits enjoys a good reputation and brand name being an old biscuit manufacturing company and this would be an important factor to consider while competing with international brands.

Even though Arnott’s biscuits has a wide range of products that are manufactured and sold by it, the company still has the opportunity to enter the cereals and breakfast segment of the market. The company also has the chance to expand its business on to the manufacturting of cookies as well.

Given the brand name and reputation the company enjoys in Australia, it may utilize proper promotional and advertisement campaigns to penetrate on to other markets and expand its business operations on a global scale (Ong, 2014).

Arnott’s biscuits mainly focuses on children who are aged 12 or less as their primary consumer base. Therefore the products it manufactures, has always been famous for being healthy and also following all the guidelines and protocols that exist regarding the manufacture, sale and consumption of snacks and other food items. Thus, this establishes a good image of the company to the general public. The company may use this to its advantage of promoting its products stating how healthy it is from the other food products that re currently being sold in the market. The company also sources most of its raw materials from Australia only and hence needs to look for cheaper sources. The reduction in the cost of operations would allow the company to provide products at a a cheaper rate and this in turn would allow the company a competitive edge in the market. The company has also been conducting its business in Australia for many years now, and has the revenue and capability to expand its business on to other countries or on to the global market. This would have a great positive impact in the increase of the number of consumers as well as an 9ncrease in the overall profits earned by the company.

Business Model Analysis

In order to better understand the various strategies, policies and business operations conducted by the Arnott’s biscuits company, the Osterwalder Pigneur business model canvas has been utilized (Lambert & Davidson, 2013). The business model analysis of their company reveals that Arnott’s biscuits are considered to be highly trained and skilled bakers. The company is famous for producing a wide variety of products which are not only tasty but are also healthy in nature (Bigliardi & Galati, 2013). The company has the presence of a diverse range of flavors that are consumed by all sections of the crowd. The company has the presence of a proper communication/feedback channel that addresses the queries and complaints of its consumers. The advertisement and promotional activities are conducted by the company on almost all forms of media, with an increased emphasis on the social media and television platforms. The cost of operations for the company mainly comprises of the buying of high quality raw materials, salaries and wages paid to its employees and all members of staff and lastly marketing and advertisement campaigns. The revenue generation or profit takes place only through the number of products that are being sold. Thus, it is important for the company to not only maintain a great number of loyal consumers but also to target the market of other regiuons and potential consumers in order to increase its profits (Jolink & Niesten, 2015).

Critical success factors are the factors without the presence of which the possibility of the business model innovation is not possible (Massa & Tucci, 2013). The first critical success factor for this case would include the proper implementation of the combination of health benefits of the snacks biscuits and other consumable products that are manufactured and sold by the Arnott’s biscuits company. Apart from this, any form of change that is to be implemented should carefully be researched and analyzed beforehand to avoid chances of experiencing a negative impact and loss of consumers (Sutton-Brady, Kamvounias & Taylor, 2015). The company should also ensure that it provides good quality, tasty products which are cheap in price compared to its competitors but are more healthy in nature. Lastly, the company has a wide scope of expanding its business on a global scale and this needs to be considered by the company for further increasing its market and consumer base as well as sales.  

Conclusion

There are problems associated with all kinds of businesses which crop up from time to time. Arnott’s biscuits is the country’s largest biscuit brand, however there were problems which cropped up resulting in instability in the company. The proposed innovations and changes if properly adopted may reduce the scope of the problems and help the company in increasing its revenues.

References

Bigliardi, B., & Galati, F. (2013). Models of adoption of open innovation within the food industry. Trends in Food Science & Technology, 30(1), 16-26.

Bogers, M., Hadar, R., & Bilberg, A. (2016). Additive manufacturing for consumer-centric business models: Implications for supply chains in consumer goods manufacturing. Technological Forecasting and Social Change, 102, 225-239.

Jolink, A., & Niesten, E. (2015). Sustainable development and business models of entrepreneurs in the organic food industry. Business Strategy and the Environment, 24(6), 386-401.

Lambert, S. C., & Davidson, R. A. (2013). Applications of the business model in studies of enterprise success, innovation and classification: An analysis of empirical research from 1996 to 2010. European  Management Journal, 31(6), 668-681.

Massa, L., & Tucci, C. L. (2013). Business model innovation. The Oxford Handbook of Innovation Management, Oxford University Press, Oxford, 420-441.

Non-Cyclicals, S. C., & Year, F. (2016). CAMPBELL SOUP CO.

Non-Cyclicals, S. C., & Year, F. (2018). CAMPBELL SOUP CO.

Ong, J. (2014). Campbell Arnott's wins top award for eco packaging. Waste Management and Environment , 25(8), 22.

Sutton-Brady, C., Kamvounias, P., & Taylor, T. (2015). A model of supplier–retailer power asymmetry in the Australian retail industry. Industrial marketing management, 51, 122-130.

Weiss, A. (2016). 2015 RACI National Award winners. Chemistry in Australia.