Adaptation Versus Aggregation Strategy In Food And Beverage Industry Essay.

The Effectiveness of Adaptation Strategy in Food and Beverage Industry

Question:

Discuss about the Competitive Strategy for Food Industry.

Coca Cola has been one of the famous food and beverage industry for the past two decades. The company has earned huge reputation in the field. The AAA framework has been effective from the point of view of the company.

This strategy actually helps the company to adapt the location of the business in order to make the business successful (Morekar, 2011). Coca Cola mainly targets to grab the entire food and beverage market wherever it sets itself to do business. It is obvious that the company must be used to with the environment of the place. They must understand the demand and needs of the customers in order to satisfy them. The items which are famous in the local ambience, the company must put all its concentration to keep enough supply of that particular product. Adaptation is actually divided into five parameters where each of the parameter defines the actual activities of the company. The first parameter is Variation in which the company must keep varieties of products in order to satisfy large scale of the customers. The second parameter is Focus where the company must set its target audience and keep all its focus on those customers. Third parameter as in Externalization says about networking and franchising where the products and the company must build up strong relationship with the demands of the customers. Design is the fourth parameter which says about the outlook of the company and its way of presentation. It actually the parameter through which the customer are attracted towards the company. Last parameter is Innovation where the business must generate innovative ideas in order to make the organization more creative (Mayer et al., 2012).

Aggregation strategy actually seeks to achieve economic scope by creating global efficiencies. It means the company and the employees of the company increase their efficiency in order to be perfect for the market scenario. The standard of the products are increased while maintaining the value internationally (Sarlak and Hastiani, 2011). The costs of producing the products are brought down in order to make more profits from the market. There are some global organizations like Coca Cola who have followed the aggregation instead of adaptation just to lower the cost of productivity. They have taken the raw materials from those places where labor charge and material costs are less. This is what people actually term as aggregation. Coca Cola have been aware of this strategy and have used this strategy in many parts of the business. Aggregation is all about bridging or connecting different market (Lemmerer and Menrad, 2015).

This strategy neither follows to link up different market or it doesn’t adapt the market. It simply focuses on the market and tries to maintain the standard of the products by comparing the specifications of the product with other products in the market. One can simply buy a product from a place where the price of the product is less (Schultz and Cohen, 2010). After buying the product it can be sold to some other places where the customers are ready to pay more for the product. This scenario actually needs to be defined by four parameters. Cultural parameter says about the cultural part of the country which can affect the business in many ways. Administrative parameter says about the taxes, regulations and securities of the business. The third parameter is the geographic parameter where distances and climate differences can affect the business in many ways. The fourth parameter is the most crucial one and that is economic (Schultz and Cohen, 2010). The economy of a particular country can take the business to a different level if it supports the scenario of the business. Keeping all the parameters in mind a business can easily follow arbitrage strategy in order increase the span of the business.  

The 5 Parameters of Adaptation

Another company in Food and Beverage industry is Cadbury which has earned its reputation in the field of producing quality chocolates and many other food items.

It is also the same strategy as the previous one. There are multiple companies in the field who produces chocolates and those companies are famous in different region of the world. It is o because those companies are able to fulfill the demand of the customer of particular region. Cadbury also have adapted the demand and criteria of the customers in different parts of the world and that is why the company is in the primary chocolate producing company’ list. The five parameters of variation, focus, externalization, design and innovation can be implemented as the terms mean. With the varieties in the products, perfect communication with the customers, attractive design to attract the customers and innovative ideas can help Cadbury to adapt the market scenario in a perfect way (Seo, 2016).

There are different market scenarios in the field of business and the companies must connect all the scenarios in a same place for the betterment of the organization. It can be said that sometimes companies like Cadbury prefers aggregation strategy over adaptation strategy to be more effective and unique in the field. Aggregation strategy actually suggests company to buy raw materials from the low cost market to make the productivity more profitable (Ayub and Patel, 2011). This strategy actually guides the company to increase the scope of economy by increasing the efficiency of the employees and the performance of the organization. 

This strategy neither concentrates on adaption nor does it concentrate on aggregation. It is actually the way to create the global value by exploiting the different parts of the market. There is a say that many companies have followed this strategy and have decided to buy materials from lower price places and have sold them in those places where the prices of the products are high. The cultural, Administrative, Geographic and Economic parameters are very crucial in this part of strategy. Every single of the above mentioned parameters can help Cadbury to build a good platform of business in different parts of the world. The companies actually have to find the demands for the products by which they will be able to serve the customers with the desired products (Borrowing costs, 2009).

This industry is mainly known as the information communications technology industry where there are several companies. The most common and worldwide accepted company is Apple Inc.

Adaptation in this case can be described concerning the technologies of a particular country in which the company is going to set its business. In the field of information communication technology Apple Inc has earned enough reputation while connecting the customers through their technologies. The needs and demands of the customer can be reached through the specification the phones give and this is called adaptation (Andreou, 2012). There are five parameters of adaptation through which the company can adapt the market scenario in order to reach the demands of the customers. Variation is the first parameter where the company must make variety of products to satisfy different customers in the market. Focusing on the market scenario and the target customers is the second parameter of adaptation that helps the company in an effective way. Externalization helps company to be connected with various customers in the field and it is considered as the third parameter in the field. The outlook of the products and the company’s outlet can be termed as the fourth parameter. This parameter is known as design parameter. The importance of this parameter is that it attracts the customers by it presentation. Last but not the least innovation which is considered as the fifth parameter of adaptation and help the business to carry out innovative ideas for the sake of the company (Chiang et al., 2011).

The Importance of Aggregation Strategy in Food and Beverage Industry

 This strategy actually helps the employees of the company to increase their efficiency in the field. There are many situations in the market field where Apple Inc have chosen aggregation strategy over adaptation (Seong-Goo Ji, 2014). The main effectiveness of this strategy is that it can lower the cost to buy raw materials from the market. It actually helps the productivity cost to be decreased and profit to be increased. Aggregation strategy can help the business to understand the economic scale and spread the business in an effective way.

Arbitrage strategy neither does deal with adapting the market scenario nor does it deal with the efficiency of the employees in the organization. The main motto of the company is exploiting the market in order to increase the value of the company globally. It is obvious that in many stages Apple Inc have followed this strategy in order to buy the raw materials for the productivity. This strategy actually tells to buy products from low cost market and sell those products in high cost market. There are four parameter of the strategy through which the strategy can understood easily. The cultural parameter helps the company to know about the ethics and cultures of the customer of a particular country that helps the company to make the business strategy more effective. Administrative strategy tells the company to be aware about the rules and regulations of the market place or the country (HURD, 2012). Geographic parameter helps a particular company to know about the geographic location of the customer which helps the company to know about the demands and ongoing trends in a particular locality or area. Economic parameter says about the economic condition of the country that affects the company effectively. Apple Inc has always kept these parameters in mind and that is why the company has been successful in the business field. 

Samsung is another company in ICT field which also have been effective in the field just after Apple Inc.

The company has been maintaining the position just after Apple Inc and the company serves their products to all the customers in different level of the society. This is called adaptation that is maintained by Samsung in an effective way. The company actually focuses on different level of the customers and makes their products for every single customer in the field. Keeping the financial condition of the customers in mind the company creates variety of products for all level customers. The Variation parameter is maintained by this company most effectively (Lim, 2010). The variety in products and focusing all the customers in the market has made the company famous among all types of customers. Externalization, design and innovation are the rest of the parameters where Samsung have reached effectively.

In order to be effective in the market it is obvious that the company have to become aware about the economic scales. It actually increases the efficiency of the employees in the company which helps the company to make their strategies more effectively. The raw materials in this strategy are bought from the low cost market which increases the profit and productivity of the company(Tanuku, 2009). This strategy actually connects every segment of the market all together in order to make the company understand about marketplaces. Samsung have chosen this strategy in place of adaptation in many cases.

This is a total different strategy that does not care about being connected in the market segment or adapting the market scenario. It cares about raising the standard of the company to international level so that the company is able to make international business effectively. The main effectiveness of this strategy is to buy products from low cost market and sell them in high cost market to make more profit. There are four parameter of the strategy through which Samsung can be effective in the field. The cultural parameter helps the company to understand about the culture of the customers and based on which they build their strategies. Administrative strategy helps the company to understand about the rules and regulations of the marketplace and country (Standing, 2011). The geographic location of the customers tells about the requirements and criteria about the products and economic condition of the customers help the company to set the price of the products.

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