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Analyse the Agribusiness’ internal organisation. Discuss its resources, capabilities, core competencies and competitive  advantages.

Business units, product line and revenue generation

Goodman Fielder is the Australia`s largest food producer listed company. It produces a wide range of consumer products majorly grocery products such as milk, bread, mayonnaise and flour. Goodman Fielder has been a largest supplier of edible oils to both Australia and New Zealand. Goodman Fielder is the largest supplier of floor to New Zealand retail customers. After being listed in 2005, the company acquired dairy products of New Zealand, which is one of the leading supplier of dairy products for consumers. The report outlines the business units in the world, the maximum revenue generator unit, and the different product line. Moreover, the report also reveals that internal and external environment of the company, which influences the operation of the company.  

Majorly, Goodman Fielder has its business operational units in more than 40 plants in certain countries named as Papua New Guinea, New Caledonia, Singapore, Hong Kong, Philippines, Australia, and New Zealand. Goodman fielder is headquartered in Australia and as local producer; the company offers wide range of products to Australian consumers. The company offers more than 18 product varieties in Australia. The organisation has more than 2000 people working in 17 factories and generates sales of $1 billion (Goodman fielder, 2012).

Apart from the domestic country, Goodman Fielder has expanded its greater business operations in New Zealand. The New Zealand operational unit is the second highest revenue generator of the company after Australia. New Zealand has 13 manufacturing sites in New Zealand and it employs more than 1800 people in nearly 13 factories. The company operates more than 21 products in the country with revenue generation of NZ1 billion. Goodman Fielder operates in New Zealand and Australia with almost same products such as Quality Bakers, Vogel`s, Molenberg New Zealand, Activate, Bouton d`or, Freya`s, Mackenzie, Chesdale, Naturalea, Ornelle, Puhoi valley, Edmonds, Tararua Dairy co., Meadow Fresh, and many more (Turner et al., 2016).


In 2012-2013, the company decided to make overhead cost reduction plans and removed 338 positions of the baking divisions in both Australia and New Zealand. This was not enough to offset volume and price decline, which resulted in lower earnings by 28.9% in 2011 earnings before interest, tax, depreciation, and amortization of $ 93.2 million (Goodman fielder, 2013).

The company also decided to rationalise its product range and reduce unique products from 450 to 350 so that manufacturing efficiency can be improved. Revenue declined by 5.7 percent due to decreasing consumer demand of unique products, which signifies that the company needs investment and marketing strategies to mitigate sales volume. Goodman Fielder has been a leading organisation in baking. The organisation also invests in making brand portfolio by developing new products and maintaining competitive position through brand innovation (Stoppers, 2014).

Goodman Fielder SWOT analysis

Although, the new products had positive market response in terms of both sales and initial expectations. In New Zealand as far as product range is concerned, Goodman Fielder launched its free range of breads named Vogel`s gluten and Molenberg fresh loaf which has driven the company growth by 45 percent (Goodman fielder, 2016).

SWOT analysis is an internal analysis that identifies vision, mission, and objective of an organisation. To achieve the vision, mission, and objective, the organisation identifies its strength, weakness, opportunities, and threat. Goodman Fielder aims to maintain a lead and innovative position in the local food. The organisation wants to achieve and create long-term value for its stakeholders (Latip et al., 2015).

The organisation has competition with George Weston Food Ltd, National Food ltd, and Nestle Australia ltd. Although Company cannot restrict entry of new company in the market because of awareness of people regarding health issues. The new entrants’ focuses on bringing new products that have high nutritional value (Goodman fielder, 2016).

Strengths

  • Goodman Fielder has the leading market share in vital product categories.
  • Goodman Fielder owns brands like meadow lea, White Wings, Mighty Soft, Wonder White, Praise, Crisco Olive Grove, Pampas, Helga's, and Cornwell's.
  • Goodman Fielder is a leader in the food industry.
  • The company has effective marketing campaign.
  • Goodman Fielder has experienced management team with skilled labour.
  • Goodman Fielder has central manufacturing and sourcing of consumer goods.
  • The Goodman Fielder has well established network of distribution channels (Brudermann, Mitterhuber and Posch, 2015).

Weakness

  • Goodman Fielder covers very few market areas in emerging markets like Asia and New Zealand.
  • The market share of Goodman Fielder is not very effective because of intense competition between the companies.
  • Goodman Fielder do not have effective competitive strategy and promotional campaign.
  • Goodman Fielder has weak industry fundamentals, which result to deteriorating returns.
  • Goodman Fielder is not able to recover the recent input cost incurred.

Opportunity

  • The company has the opportunity to increase its market share by entering into frozen foods and indulge into exports.
  • The company can indulge to build small-specialised bakery.
  • The company can build global image and indulge to offer services.
  • Goodman Fielder should invest in innovation.
  • Goodman Fielder have the opportunity to invest in marketing and promotional campaign to drive top-level performance and establish high brand equity.

Threat

  • Goodman Fielder takes regulatory moves so that it can protect consumers from the harmful additions in food.
  • Goodman Fielder suffers from high input price of key commodities, as their supply remains limited.  
  • Goodman Fielder suffers from small and emerging competitors and it is losing its sustained consumer in Australia and New Zealand.
  • Due to increasing awareness among customers regarding health issues, the company has to focus on adding nutritional value (Sippel, 2015).    

Political environment- The Company is affected by various political and legal factors related to tax policies. The Company has to follow the laid down rules and regulation in regards to marketing and agriculture (Wiedemann et al., 2015).

Economic environment - Company may face recession due to changing preferences of consumers and their buying pattern. As far as the economic environment is concerned, there is huge uncertainty in global growth. The global financial market is volatile which creates a challenging operating environment. To increase the economic approach, the company has to work on global diversification to increase its range of portfolio brands. Various items that are included in financial statements of the company are measured through currency. Currency affects the economic environment in which the company operates (Michailidis et al., 2015).


Social environment - Goodman Fielder faces social and cultural factors related to consumer attitudes towards health, nutrition, and well-being. Due to changing purchasing behaviour patterns of customers, it becomes difficult for the company to invest in consumer purchases. Goodman`s Diversity Strategy promotes transparent working environment which is free from harassment and discrimination. Therefore, employees can contribute equally to achieve organisational goals. To maintain an equal proportion of each gender in the workforce, company operates in geographically and culturally diverse market (Dowd et al., 2014).

These corporate values are taken seriously and this behaviour interacts with new customers and investors. This gender diversity strategy not only recognises different people but also take care of different career development plans for all the employees. The main long-term objective of gender diversity focuses on increasing the number of women at senior management levels in every region. In 2013, the company decided to set aspirational targets for women at senior executive roles. Reportedly, the number of women at top executive level in Goodman have shown a decreased in 2016 (Goodman fielder, 2016).    

External environmental analysis

Technological environment - Goodman Fielder has its technical advancement and invest in advanced equipment that are innovative and can decrease cost. These new equipment available with the company helps the company to provide more nutritious and healthier food. To achieve corporate responsibility and sustainability, In Australia, the company have noticed that several lighting upgrades mainly in car park and estate common areas are operated. Therefore, The Company plans to upgrade lighting, which would drive the reduction in energy costs for customers. The company have introduced more online learning methods through Lynda.com, so that the employees can learn and access wide range of technical skills related to work. These online learning helps to work efficiently in Goodman (Goodman, 2016).  

Environmental- Goodman Fielder faces environmental factors, the increasing issues such as global warming and change in temperature. In 2016, Australia saw a reduction in greenhouse gas emissions from the company`s operations in Australia. The emission reduced because metering devices were installed to measure the energy usage of consumer power consumption. The emission reduced due to increased efficiency of brand portfolio products (Tang et al., 2016). The calculation of environmental effects of operating the company includes the emissions generated from the Australian property of Goodman, building management services, and assets managed by Goodman within Australian partnerships (Olah et al., 2016).


Legal environment – Under the Goodman Fielder`s constitution and deeds of indemnity and insurance, the company has an indemnified agreement between company, its directors, and company secretary. Any form of losses and liabilities incurred by the officers of the company is indemnified. The indemnified is irrevocable, unconditional, and principal obligation of the company that is not liable despite the officer ceasing to be an officer of the company or its related corporate (Goodman Fielder, 2014).

Each director and secretary can also indemnify, to some extent as permitted by law, for any legal costs incurred related to any claim. This cost can be under any liability of any insurance contract or involvement as a potential party in legal proceedings as a result of director`s position (Mitchell, 2015).  

The competitive advantage of Goodman Fielder lies in its distribution network. Increased private label competition affects in some categories such as in spreads, flour, and dips. This division recorded and achieved solid growth in dressings, mayonnaise and cake mixture to activate customers and range management. The company has been experiencing challenges due to market conditions and product cost volatility. Continuous increasing competition from the new private label products lead to decline in consumer trust. As a strong support, Goodman has engaged with global investors groups, who give importance and value to contemporary investment management. Maintaining a strategy to focus on urban renewal requires active participation of employees. The sites, which the company hold in different countries has huge total value, which can strengthen the financial position.  

The key performance indicators are revenue because it is able to increase its revenue to 29 percent. Another indicator is quality improvement. The positive response and feedback from the customers is one of the key performance indicator. The last performance indicator is management of finance and administration. The company has its core competencies in products like bakery, dairy, dressing and related products. One of the important core competency is that it is difficult for competitors to imitate and identify the company`s strategy (Stoppers, 2014). 

The company has to think of diversifying its capital partners and debt fund sourcing. The company has to focus on managing prudent capital by fulfilling cash flow requirements, gearing, availing the liquidity monthly reviewed report to the directors. The company should review development projects prepared by group investment committee. Goodman Fielder should undertake monitor and report work in progress of speculative development. The company has been continuing its successive planning for appointing senior executive and promoting competitive remuneration structures. In 2016, it is seen that the women workforce was decreasing. Therefore, to promote the women workforce at senior executive management level, the company can provide efficient training programs to achieve higher level (Goodman, 2016).   

Conclusion

After analysing the internal and external environment of the Goodman Fielder, it can be concluded that the company can diversify its product line in Australia as well as New Zealand. Moreover, the remaining branches have very less revenue generation involvement in the company. Operational offices such as Hong Kong, New Caledonia, Singapore, Philippines, and Papua New Guinea need to more focused regarding diversification in product line. The company should make marketing and promotional marketing strategies to reach every segment of target market. The business units discusses above clearly state that product line need to be expanded in counties except Australia and New Zealand.

References

Brudermann, T., Mitterhuber, C. and Posch, A. (2015) Agricultural biogas plants–A systematic analysis of strengths, weaknesses, opportunities, and threats. Energy Policy, 76, pp.107-111.

Dowd, A. M., Marshall, N., Fleming, A., Jakku, E., Gaillard, E. and Howden, M. (2014) the role of networks in transforming Australian agriculture. Nature Climate Change, 4(7), p. 558.

Goodman fielder (2012) Goodman fielder: shareholder meeting Auckland 28 February 2012. [online] Available at: https://nzx.com/files/attachments/153922.pdf [Accessed 25/08/18]

Goodman fielder (2013) Investing in the future, Goodman fielder annual review 2013. [online] Available at: https://www.rspo.org/file/acop2014/goodman-fielder-ltd/M-Policies-to-PNC-stakeholderengagement.pdf [Accessed 25/08/18]

Goodman Fielder (2014) Goodman fielder limited- preliminary final report and 2014 annual financial report. [online] Available at: https://agrihq.co.nz/assets/198368.pdf [Accessed 25/08/18]

Goodman fielder (2016) the dream big graduate program. [online] Available at https://goodmanfielder.com/careers/grad-cadets-interns/the-dream-big-graduate-programme/ [Accessed 25/08/18]

Goodman (2016) industrial evolution, Goodman annual report. [online] Available at:  https://www.goodman.com//media/Files/Sites/Global/Investor%20Centre/GMG%20Goodman%20Group/reports%20and%20newsletters/Annual%20Reports/20160928_annual_report_2016.pdf?la=en [Accessed 25/08/18]

Latip, N. A., Marzuki, A., Pimid, M. and Umar, M. U. (2015) Indigenous People, Conservation and Sustainable Tourism at Lower Kinabatangan, Sabah: SWOT Analysis. Australian Journal of Basic and Applied Sciences, 9(7), pp. 331-334.

Michailidis, A., Klavdianou, A., Apostolidou, I., Lorite, I. J., Pereira, F. A., Mirko, H., Buhagiar, J., Shilev, S., Michaelidis, E., Loizou, E. and Chatzitheodoridis, F. (2015) Exploring treated wastewater issues related to agriculture in Europe, employing a quantitative SWOT analysis. Procedia Economics and Finance, 33, pp. 367-375.

Mitchell, S. (2015) Goodman fielder CEO Chris Delaney departs as Willmar, first pacific take control. [online] Available at: https://www.smh.com.au/business/goodman-fielder-ceo-chris-delaney-departs-as-wilmar-first-pacific-take-control-20150317-1m13mk.html [Accessed 25/08/18]

Olah, G., Butchart, S. H., Symes, A., Guzmán, I. M., Cunningham, R., Brightsmith, D. J. and Heinsohn, R. (2016) Ecological and socio-economic factors affecting extinction risk in parrots. Biodiversity and Conservation, 25(2), pp. 205-223.

Sippel, S. R. (2015) Food security or commercial business? Gulf State investments in Australian agriculture. The Journal of Peasant Studies, 42(5), pp. 981-1001.

Stoppers, (2014) Goodman fielder wins august ad impact award, appoints reactive as digital agency. [online] Available at: https://stoppress.co.nz/news/goodman-fielder-wins-august-ad-impact-award-appoints-reactive-digital-agency [Accessed 25/08/18]

Tang, K., Hailu, A., Kragt, M. E. and Ma, C. (2016) Marginal abatement costs of greenhouse gas emissions: broadacre farming in the Great Southern Region of Western Australia. Australian Journal of Agricultural and Resource Economics, 60(3), pp.459-475.

Turner, J.A., Klerkx, L., Rijswijk, K., Williams, T. and Barnard, T. (2016) Systemic problems affecting co-innovation in the New Zealand Agricultural Innovation System: Identification of blocking mechanisms and underlying institutional logics. NJAS-Wageningen Journal of Life Sciences, 76, pp.99-112.

Wiedemann, S. G., Henry, B. K., McGahan, E. J., Grant, T., Murphy, C. M. and Niethe, G. (2015) Resource use and greenhouse gas intensity of Australian beef production: 1981–2010. Agricultural Systems, 133, pp. 109-118.

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