This assessment focuses on your understanding and appreciation of Strategic Actions and Strategy Formulation. You are required to identify a corporation in the Fibre focused Agribusiness sector of Australia. This report should include the following items:
Identify a Fibre focused Agribusiness operating in Australia.
Identify its business units and products and services lines.
Identify its business revenue units and discuss the importance of the largest of these revenue units.
Identify different business level strategies (cost leadership, differentiation, focus and integrated cost leadership/differentiation)
Analyse the Agribusiness’ business level strategy.
Draw and discuss its model of competitive reality.
Identify an implementation plan and an evaluation strategy.
Make recommendations for the future strategic direction of the selected Fibre focused Agribusiness.
Each organization or company starts with a given purpose and objective. The success of an organization is determined by the goals set at the beginning of the company or organization. The objectives reflect a clear purpose of the organization. Therefore, the goals set in an organization at the initiation period give the direction on how operations in the organization should take place. The setting of these goals makes the strategic plan of the company. A strategy, therefore, involves the setting of goals in an organization and identifying ways to achieve the set objectives. Thus strategic management means setting of organizational goals as well as setting different ways of implementation. The following is a report on the strategy used by Namoi cotton company in Australia.
Namoi Company is the leading organization in cotton processing and marketing. it was established in 1962 as a cotton processing industry in Australia. It has been successful and has the greatest share in the cotton industry (Qureshi, et al 2018). The company has a diverse marketing, ginning and operational network all over all the cotton producing areas. This is regions of southern Queensland and New South Wales. The company is also well represented in the whole world by having offices in Jakarta Indonesia. As part of their strategy, the company collaborates with other business in an effort of increasing their sales. For instance, the company collaborates with Dreyfus commodities that are Namoi cotton alliance, Warren, wee waa warehousing facilities and Goondiwindi.
The company is divided into different business units to enhance product sales and promotion. Each business unit deals with a given item as well as a given sector in the business. There are different activities, which defines a business unit in the company. The activity starts from the point of buying raw materials to the finished product (Wilkes, et al 2018). The manufacturing units are well developed and equipped to provide the best quality of different commodities. The company has a consultant unit that is very crucial to the development of the company. This unit deals with decision making in the company and is comprised of different experts selected from the company and outside environment. The work of the business unit is to enhance proper decision making as well in the company. Any time there is a need to make a crucial decision in the company; the people involved in the making of such decisions must consult the experts to enhance good decision-making.
Secondly, a very strong financial unit facilitates the flow of finances in the company. This unit regulates the finances that are used in the company to ensure that the company is making profits. They also monitor the usage of finances in the company as well. The unit, therefore, enhances proper management of company funds (Bird, 2018). It regulates the number of funds that go to each unit in the company. In the process of processing, there are other business units that include the harvesting unit, processing, exporting and classing units. The units work together to enhance the flow of the manufacturing process in the company. For instance, the harvesting unit ensures that the cotton that has been harvested has met the best standard to meet the quality required for the final product.
The company main operating units are cotton ginning, cotton marketing, cottonseed marketing and commodity parking units. The ginning unit is involved in the separation of cotton from other foreign matters after it has been harvested (Ahlqvist, 2018). The unit also separates seeds from the lint cotton. It also helps to change the arrangement of cotton from bales to modules. The marketing unit is involved in the development of market and strategies to create awareness among the customers. The unit through proper cooperation and good work has enabled the company to emerge as the best selling company in Australia. The company has been able to acquire the largest share of the cotton market in the country. The cottonseed-marketing unit is also a very important unit in the company. After the seeds have been separated from the lint cotton, they are supposed to be sold to the interested customers (Keskin, and Grunwald, 2018}. The department, using different strategies creates awareness among the customers of the availability of the seeds. Those who are interested are given the way forward to access the seeds. Finally, yet importantly, the company has a commodity-packing unit that is involved in the packing process. The unit is involved in the packing of seeds, and other commodities associated with cotton.
Namoi companies apply different strategies in their efforts to promote their products and product development. These strategies are based on different sectors of the business that includes leadership, advertisement, differentiation and integration (Ha, et al 2018). To start with, the company has a very strong and effective leadership team that is focused on achieving the goals and objective of the company. it has an executive team that is held by the chief executive who receives reports from all the business units of the company. He also conducts meetings that are held due to matters affecting the company. He is involved in making decisions that affect the company’s operations. Secondly, down the hierarchy, a general manager is stated with a duty to manage all the risks that may be encountered. He is also the one who regulated the trading activities of the company to ensure that the company is at its best. A well-arranged leadership group of a company enhances development and good performance in the company. Therefore, Namoi Company is focused on ensuring that their management team well vets. This is to ensure that all operations in the company are done with all professionalism
Strategies Used to Promote Sales
In addition to strong leadership, the company uses the differentiation of their commodities to promote sales. The differentiation starts at the manufacturing stage where they use high-quality raw materials to produce their commodities (Martin, and Hine, 2018). The quality of raw materials is the most important thing that determines the quality of the final product. Therefore, the products of the company have been differentiating from other commodities due to the high quality that they possess. The company also offers huge discounts on their products as compared to the other companies in the same industry. This strategy leads to increased sales thus the profits of the company go up. Finally, yet importantly, the company uses different advertising strategies to promote their products. Beautiful pictures of the company's products are posted on different social media sites as well as the company’s official websites. In addition, the company uses different celebrities to advertise their commodities. Their commodities quality is compared to the successful sports celebrities as well as musicians. This strategy enables the company to gain more customers especially those who are followers of those celebrities.
In order to understand the competitive reality of the company, a SWOT analysis is very necessary. The company has different strengths, weaknesses, opportunities and threats. The analysis helps in the identification of the competitive position of the company. On the strength of the company, the company has an extensive network that involves marketing, ginning, and other logical operations in Australia (Mateo-Sagasta, Zadeh, and Turral, 2018). Therefore, the company is able to generate very high economies of scale as compared to the other businesses in the same industry. Secondly, the company has a longtime relationship with the Australian grower of cotton. As a result, the company is able to maintain a constant supply of raw materials form the many growers in the country. Having an experienced board of management is also the strength of the company (Garcia, 2016). The management team has a good experience in specific organizational knowledge about the industry. Lastly, the company has been able to maintain a good relationship with their customers. It has been able to get reliable customers who are always there no matter what. The only weakness that the company has is the fact that cotton has great production variability impacts on profitability.
The expected population growth in Australia is a great opportunity for the company. In addition, the country and the whole world, in general, are expected to experience a lot of urbanization, which is the key factor in cotton demand. Due to population growth, there is an increase in the market of the commodity, which will expand the market share of the company. Secondly, there is widespread rainfall that has provided a lot of water for irrigation. The water has been used to irrigate acres of land that is used to grow cotton. This will increase the raw material for the company to use in production. Development of infrastructure is a great opportunity for the company. There has been a great investment in infrastructure by the government of Australia to facilitate transport and communication. As a result, the company will be able to transport raw materials and finished goods in are the convenient way to enhance the sales and development of the company.
Risks that are inflation, currencies and price of the company: The exposure to such risks is a great threat to the company due to unavailability of cheap alternatives. Cotton is an agricultural product and is heavily dependent on rain. This posts a great threat whenever there are no rains available and can cause many losses (Rocha, et al 2018). Drought or heavy rains are therefore a threat to the company. There has been an increase in the intensity of competition from other companies from different countries. This country includes Brazil and India. These two countries post a great threat to the company due to the great completion that they cause. Lastly, there are low-level markets of cotton in the world (Walsh, B., 2015). This is due to policies such as the Chinese cotton policy that affects the sale of cotton in their country.
Namoi Company is a great company and has a great share in the cotton market. However, form the above analysis it is clear that the company is facing a great threat from other competitors. Therefore, the company has to come up with different strategies to ensure that they are able to maintain their position in the industry (Hawkes, 2018). The following is the strategy that the company has implemented together with a few recommendations on the same.
First, the company is applying the strategy of product differentiation to be able to acquire a competitive advantage over their rivals. This is whereby the company is using quality raw materials to provide unique commodities in terms of quality. Secondly, the company uses other strategies of making their commodities different from others. The strategies simply use attractive colors in their products as well as differentiated shapes and sizes (Lyani, 2017). The other strategy is whereby the company offers discounts to the consumers. This strategy is similar to the price reduction policy. It has contributed a lot to the promotion of the commodities. Customers are able to give a good testimony about how cheap the products of the company are as compared to other companies.
Leadership is a very important part of an organization. Therefore, each organization in their strategy should consider their leadership team and do the necessary changes if there is any. For Namoi Company, the selection of a strong leadership team is part of the strategy. The company has qualified leaders who are focused on achieving the goals of the company (Tourenq, Field, and Searle, 2016). The leaders have a vast experience in the matters concerning the industry. Therefore, they are able to detect problems as well as opportunities for the company. This has lead to a lot of development of the company as well as increased sales (Wilkinson, 2014). The organization of the company has also developed and consumers are served in the most convenient and efficient way.
Opportunities and Threats
Lastly, the company has placed a lot of emphasis on the advertisement strategy (Balvanera, et al 2016). As a result, the company has been able to capture the mind of the consumer and has gained their attention. Using sports and other entertaining activities, the company has been able to realize this great objective. Use of different celebrities and musicians has gained many customers for the company. This is because the quality of their products has been associated with the success of the celebrities (Wilkinson, 2014). Therefore different people are attracted to the commodities because they love the sports stars and are willing to do anything to be part of them. The results are big profits and development of the company.
The selected strategy of the company is a great step towards acquiring competitive advantages over other business. However, this strategy is not perfect and requires a few adjustments. I would recommend that the company apply the following changes in the strategy to meet their ever-changing demand.
First, the company should try as much as possible to avoid price-based strategies. That is the reduction of the commodities prices in order to attract customers. This is because people are not concentrating more on the price of the commodity but quality (Williams, 2017). Therefore, the language used in describing the commodity is more important than the price. Telling people more about how good the commodity is will raise their need to buy such a commodity. The company should avoid tones such as cheap in their marketing strategy. Instead, I recommend that the company should tell the customers more about the commodity other than the price of the commodity.
Secondly, I recommend that the company use their customers to sell themselves. This can be made possible by the creation of a platform where customers can express their experiences in the company (Markey, and Halseth, 2016). The customers are allowed to tell others what they experienced in the company and what would make them go back. By doing so different people will be convinced to go an try the company and as a result, the company will gain more customers. The company should also focus more on the use of different social media sites to advertise their commodities (Barker, 2017). This is because almost everybody in the world has access to the sites. Therefore advertising a commodity through such sites as FB gives, you access to very many people in the world.
Success in a business is because of a good strategy that the business applies in marketing their products. Poor management leads to failure of business or a company. Namoi Company, which is an agro-based fiber business, is one of the successful companies in Australia. It is the largest company and has the greatest share of the cotton market in the country. The company has different business units and a strong financial department. In addition, it has been able to implement a well-structured strategy to maintain their position. This strategy is based on leadership, differentiation and prices of the commodity. This strategy has enhanced the development of the company. Therefore a good strategy followed by an implementation plan, guarantee success in an organization.
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