Strategic Analysis Essay On Bellamy's Organic Company.

Background information of Bellamy’s Organic

To Conduct a Strategic Analysis, and Write a report on a Real-Life Business.

Bellamy’s Organic Company is an Australian baby food producer with organic instant formula. The company offers a range of products such as toddler milk, baby rice, baby porridge and many other baby meals (Bellamy's Organic, 2017). Moreover, organic milk drinks are also offered by the company along with offering supplementary food needed to address dietary needs of toddlers. The objective of the paper is to gather background information regarding Bellamy’s Organic Company and carry out macro-environmental analysis for the industry. Moreover, competitive analysis of Bellamy’s Organic using Porter’s five forces theory will be carried out. The paper will also explain resources and competencies of the company through employing VRIO framework.

Bellamy’s Organic Company is an Australian baby food producer with organic instant formula. The company offers a range of products such as toddler milk, baby rice, baby porridge and many other baby meals. Moreover, organic milk drinks are also offered by the company along with offering supplementary food needed to address dietary needs of toddlers (Bettis et al. 2016).

Political

• Australian economy considers altering direction including nourishment guidelines and promotional activities
• Australian economy considers focuses on enhancing g`overnment strength in certain economies Risk factor with feature of global procedure
• Australian economy considers altering worldwide controls and maintaining effective practice along with adjustment with various political strengths

The company offers businesses in few nations. The guidelines and directions of Australian economy developed by the administration are distinctive in certain locales. Australian economy should concentrate on such political elements like tax collection, import based obligations, government consent to remain within objective section along with presenting hygiene items as guided by the supervisory bodies (Bryce 2017). Also in contemporary patterns that exist within administration solidness, Australian economy must consider and perceive certain related risks that might get included. Australian economy might also consider the changing worldwide controls which are yet to receive by the organization.

Economic

• Australian economy considers focussing on learning regarding evolving expansion, financial development rates and pay levels
• Australian economy considers also focuses on altering consumer-spending plans, ascent along with cost cognizant purchaser
• I Australian economy considers increasing crude material products costs in connection for a source from economical providers

Distinctive nations have a level of advancement. Economy of Australian economy contrasts within the place. Therefore, the Australian economy desires setting distinctive monetary strategies for focused fragments. The cost of products is a vital choice in order to strategize the financial strategies agreeing the expansion rate and purchasing energy of fragments (Chen, Delmas and Lieberman 2015). The Australian economy considers should make an examination provide details regarding successive premise to get learning of swelling rates and income levels. The Australian economy has a considerable measure in developing the financial value of agriculturists by creating the items at nearby level in order to fulfil of the customer.

Social

• Australian economy considers altering buyer mind state and move towards more beneficial products considering with government activities supporting adjusted weight control plans and the threats of sugar.
• Australian economy considers changing life ways along with returning to home cooking and development of family time within comfort
• The requirement to adjust various social settings in Australian economy considers includes religious convictions along with family surroundings
• Comprehension of purchaser conduct in Australian economy is critical to guarantee people certain ways to deal with showcasing.
• Buyers observing the Australian economy considers to maintain office control in highly effective outer condition

Technological: With advancement of online networking in Australian economy, shoppers connecting with Australian economy help in gathering capacity to do such things over multiple stages

• Advancement in Australian economy fuelled by mechanical improvements.
• Online business in Australian economy at stage for advancement

PESTEL Analysis of Bellamy’s Organic Company

Legal: Australian economy considers altering nature of control and need to stick to global controls and changes all over various universal markets

Environmental- It is gathered that Australian economy is coordinated in the direction of corporate social duty. Environmental concerns from shoppers that encompass worries with bundling/reusing. Innovation offers numerous ways for the new product development or change of the remaining ones. New strategies of promotion, for instance, web and internet business are imperative to centre at the moment (Daspit et al. 2017). Hence the Australian economy considers uses innovation in certain business operations get an eliminated chance to maintain databases with programming. The widespread use of online networking in Australian economy has decreased the gap between the immediate communication of purchaser and the Australian economy. The Australian economy should take after such a proverb, to the point that quickens development with the assistance of mechanical progressions. The Australian economy is as of now utilizing the innovative innovation for the generation of different items, they are meeting the worldwide models by introducing the contemporary plants (Frynas and Mellahi 2015).

The competitive analysis of milk industry in Australia has been conducted with the help of Porter’s five forces framework, which are briefly described as follows:

Threat of competition:

It has been observed that the level of competition is intense in the Australian milk industry. Due to the natural and organic specialisation of milk industry within the industry, this portion of the industry tends to depend largely on conveyance of quality, education of consumer base, health benefits of the products and store locations depending on the affluence and level of education of the population (Wheelen and Hunger 2017). For instance, chains like Safeway and Kroger have started to offer organic foods raising the milk industry. In addition, the international market growth in milk industry has increased rapidly for natural and organic goods and because of the small number of wholly natural or organic market grocers, the profit potential associated with the competitive rivalry force for milk industry is extremely high in the industry.

Threat of new entrants:

This force is extremely high in the milk industry because the group of candidates for entering into the same is extremely big. This consists of present milk stores, big box superstores and supermarkets (Vogel and Güttel 2013). Moreover, the barriers to entry into the milk industry of Australia are highly minimal and the fast growth of the industry has resulted in raising the threat of entry. Due to such high force of threat into the industry, milk industry might encounter unattractive profit potential from this industry in future.

Competitive analysis of Bellamy’s Organic using Porter’s five forces framework

Threat of substitution:

As milk industry is involved in selling products as commodities and needed to sustain life, there is only a single threat of substitution for the organisation. This includes the non-organic products that the current grocery retailers are selling in the Australian milk industry (Trigeorgis and Reuer 2017). However, this threat is highly strong in the milk industry due to the fact that non-organic products are available at cheaper rates in the market. In addition, the consumers could find it easily in contrast to organic products due to store locations and widespread availability of the same. Hence, the profit potential for milk industry from this force is not attractive as well.

Bargaining power of the suppliers:

The major suppliers in the milk industry of Australia comprise of ranchers, farmers and organic firms. However, the bargaining power of these suppliers is extremely moderate, since the supplied products are commodities (Stead and Stead 2013). In addition, the number of suppliers is limited that could match with the desired standards of this industry. The profit potential for milk industry could be attractive, as it has effective supply chain management and communication with the suppliers.

Bargaining power of the buyers:

The bargaining power of the buyers is relatively weak, as they tend to buy in smaller amounts due to the perishable nature of the organic goods. Moreover, the motivation of a buyer to purchase organic products is driven through product quality and health consciousness, while price is not the primary influence (Seyed-Javadin et al. 2014). Hence, such effective buyer-seller relationship would help milk industry in increasing its profit potential, as the buyers are ready to pay premium prices for health safety concerns to obtain greater quality of products.

From the above evaluation, it has been found the profit potential for the organisation in the milk industry is fairly attractive. However, this industry could not be seen as an entire vacuum due to the expansion of conventional grocery chains (David and David 2015). This is because this industry is still lagging behind the whole food market of Australia in the existing era.

The main resources and competencies of Bellamy’s Organic have been identified as follows:

Financial resources:

The organisation has earned sufficient revenues over the years, which has met its financial needs to tap into the new market. The organisation has good credit rating in the market, which could be utilised to borrow money from banks and financial institutions (Rothaermel 2015). Despite such strong financial resources, the whole foods industry has sufficient cash on hand in Australia. Such effective cash on hand has helped the industry in responding effectively to both environmental weaknesses and threats.

Technological resources:

The existing technology that Bellamy’s Organic uses in manufacturing organic products could be applied in Europe as well. Thus, the effective industrial practices, processes and trademarks act as technological resources for the organisation.

Organisational resources:

The current strategic frameworks and the previous experience might fetch the needed guidelines to enter into a new market. As the firm has been in the market of Australia for long duration, there is immense value in its intellectual capital and learning.

Human resources:

Bellamy’s Organic has vast sets of knowledgeable and experienced employees in its Australia offices having knowledge of each procedure and process to be followed in maintaining the standards in any location. Hence, they are adjudged as the most valuable assets of the organisation (Peteraf, Gamble and Thompson Jr 2014).

The application of VRIO framework could be made based on the above components of framework, which is depicted as follows:

Value:

The strong financial resources might help Bellamy’s Organic in focusing on its diversification plans for obtaining competitive supremacy. It could use its technological resources in combination with human resources for setting up technologically advanced stores in the cross-border nations. The technical skills of its employees would help in recruiting local individuals along with providing effective training. As a result, the overall operational process of the organisation would be standardised.

Rarity:

The organisation has few technological resources that are exclusive to Bellamy’s Organic only. However, such exclusivity could not be ensured blindly due to the availability of other big players in the market. Hence, it is necessary for the organisation to use these technological resources in a sensible manner along with leaving the remaining to the marketing activities. However, with the rapid growth of the whole foods industry in the segment of organic food, Bellamy’s Organic could not enjoy little rarity of its resources due to the fact that the others entering the market might face difficulties to obtain untapped resources. As a result, the competitive advantage of the organisation might be lost in future.

Imitable:

Bellamy’s Organic could develop advanced processes in its stores in Australia, which the other competitors might struggle to cope up with the same. At least, the organisation could ensure to upgrade its technology in such a way that the current small local players could not match up with the same in the upcoming years (Peppard and Ward 2016). The organisational resources like the knowledge of the Australian market could be taken into account as rare, since it might be the first firm in the industry to expand its business into Europe.

Organisation:

Bellamy’s Organic has been operating in Australia for over many years. The organisation could be assumed to be at the stage of its maturity. The inter-dependency of the resources and its collaboration is guided strongly through the established procedures and processes (Morschett, Schramm-Klein and Zentes 2015). The roles of the management could be assumed to be clearly precise and thus, an effective utilisation of resources is highly possible.

Conclusion:

The objective of the paper is to gather background information regarding Bellamy’s Organic Company and carry out macro-environmental analysis for the industry. Moreover, competitive analysis of Bellamy’s Organic using Porter’s five forces theory will be carried out. The paper will also explain resources and competencies of the company through employing VRIO framework. It was gathered from the paper that the company uses innovation in certain business operations get an eliminated of chance to maintain the databases with programming assistance. The widespread use of online networking has decreased the gap between communication of purchaser and the organization. The company should take after such a proverb, to the point that quickens development with the assistance of mechanical progressions.

References:

Bellamy's Organic., 2017.  Home. [online] Available at: https://www.bellamysorganic.com.au/ [Accessed 16 Aug. 2017].

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