Strategic Planning For Dairy Product Australia

Simulations and Strategy Implementation

Question:

Evaluate the Strategic Plan for Diary Product Australia.

This report seeks to identify a suitable strategic plan to enable steer Dairy Product Australia firm to greater market levels.  The report will address this by employing theories and frameworks related to strategic planning within an organization and assessing the constraints to strategy.  The report structure will include an analysis of the firm, SWOT and PESTEL analysis of the firm`s environment, a summary of the firm's gaps, projected firm and functional areas objectives, a strategy for all the functional areas and business level strategy, contingencies, conclusion, and recommendations.

An Analysis of the Simulation firm

Simulations place corporate leaders in a virtual context where they can experience the benefits and consequences of their decisions within a risk-free environment (George, 2013).  This way, corporate leaders can exercise prudence when engineering and implementing the strategic plans for their companies in a real business setting.  He adds that they are critical in creating capabilities required for superior strategy implementation.  This implies that simulations enable the top management to develop and strengthen their capacities applicable for the actualization of superior strategies within their organizations.  As such, the activity is essential before actualizing it in a real business setting.

The company manufactures table cream, ice cream, sour cream, yogurt and cottage cheese.  Its market share in the Australian diary market is quite commendable.  This is attributed to its variety of dairy product brands.  The firm is located in Victoria, Australia.  However, the firm faces stiff competition from other dairy firms.  Recently, it has tried to diversify its products.  The environment it operates in is quite stable.  This gives it an upper hand in the market.  However, at times external uncertainties face the firm.

The tools I will use are SWOT and PESTEL analysis. 

An entity needs to understand the environment in which it operates.  It mainly focuses on the external market environmental factors.  Organizations have no ultimate control over the external factors regardless of the fact that they notably impact their daily operations.  However, entities can put measures in place to mitigate the negative impacts of some of the external market environmental factors to its operations.  They include: political, economic, social, cultural, technology and legislation factors (Ray & Graham, 2010).  These are factors that the company has no control over.  The political environment is favourable for the firm since Australia has a stable government.  The level of technology useful in diary product industry in the country is high, and this extensively favours the firm by ensuring that it produces high quality and consumer oriented products.  All of the rest of the factors are fairly workable with the company.  Diagrammatic representation of PESTEL analysis tool is shown below.

Firm Overview and Environmental Analysis

Internally, the company is doing quite well.  The internal factors include managerial functions, competitive factors, financial factors and technical factors (Ray & Graham, 2010).  For a long time, the firm has been able to hire and retain outstanding staff although such exceptional employees in the company are fewer, has been flexible to change, it has been able to dominate and retain its market share, its liquidity level is remarkable, it possesses great capacities to enter new markets, enjoys large economies of scale and adds significant value to its dairy products.

SWOT analysis is used in establishing the competitive merit of an existing business, and it is an acronym that stands for strengths, weaknesses, opportunities, and threats (Edward, 2007).  Diary Product Australia has quite strong technical skills in matters manufacturing and processing its products among other skills.  However, the firm is struggling with the challenge of the inadequately skilled sales staff.  Currently, the company is anticipating tapping into new international markets and weighing on buying out one of its competitors to increase its market share both locally and internationally.  The dairy industry in Australia has growth potential and to change immensely in the next decade to satisfy the increasing local and international demands (Council, 2016).  Similarly, there are likely alternative markets for the Australian diary industry (Clint, 2017).  The company is planning to capitalize on these reported forecasts.  Nevertheless, it also faces external threats such as tax hikes, changing legislations regulating the dairy industry and economic crisis and fluctuations just to mention a few.  SWOT analysis diagrammatic representation is given below     

There are fewer gaps in the firm. They include inadequate creative marketing frameworks, a limited number of brands, less number of exceptional staff and limited engagement with customers on social media platforms.

Company objectives should translate key result areas, for instance, market penetration and the general sales rate growth (Malcolm & Ian, 2004). This implies that its chief aim is to increase market share and enhance sales.  They add that the objective should be consistent with the strategic plan, compatible with the strengths, weaknesses and the economics of other organizational functions and achievable within budget limitations.  As such, it is indispensable for Dairy Product Australia to formulate objectives which are in harmony with its projected strategic plan, congruent with the internal strengths and abilities of the firm, adaptable to its weaknesses and should be successfully attainable within the budget restraints.

SWOT and PESTEL Analysis

The firm objectives include:

• To increase our market penetration both locally and internationally. This will encompass tapping into the existing markets with potential as well as the new markets.
• Diversify our product brands
• Increase our engagement with our customers on social media
• Design and implement innovative marketing frameworks

Functional areas are departments which serve specific purposes in an entity to attain its overall objective, and they include: purchase, sales, finance, manufacturing, administrative and human resource departments (Ukessays, 2017).  The functional areas work interdependently to steer the company in achieving its overall goals and objectives in a systematic manner.  Their overall objectives include:

• to work in synergy to actualize the general company objectives
• to grow their operational capacities
• to enhance their use of technical expertise and skills resources

Some of the purposes for strategic plans include: changing the company direction, accelerate growth and enhance profitability, allocating resources to areas of best potential and providing a road map of where the firm is going and how to reach there among others (George S., 2010).  Similarly, each functional area of an organization creates its objectives and designs strategies to attain them (William & Ferrell., 2008).  This means that the individual functional areas formulate their objectives and strategies.  They add that, however, the strategies of each functional area must back the firm`s general strategy.

The business level strategy should help align the competitive strategies of the functional areas to establish synergies (Olivier, 2016). This means that they should be compatible.  The company`s business level strategy for 2017-2020 is illustrated.

It describes an imminent event or situation which is likely, but its predictability is uncertain.  This implies that there are situations or events that are anticipated by organizations and which are adverse to their strategic plans but the top management or the strategic planners cannot predict them with absolute certainty.  Several essential contingencies for firms include government, customers and competitors, unions, suppliers and technology among others (Tom, Stalker, Lawrence, & Lorsch, 2009).  For Dairy Product Australia, the chief contingencies may include the change in technology for diary product processing and preservation.  This is highly attributed to the increasingly and ever advancing technology globally. 

Constraints to strategic planning cannot be ignored but should instead be considered (Sofat & Hiro, 2015).  This means that impendent to designing a strategy is almost inevitable to any other organization.  Therefore, it is it is decisive for top management or the engineers of the strategic plan to take into account such possible limitations and consequently address them.   Some of the possible constraints to the strategy above include lack of the top management`s commitment to the complete successful implementation of the strategy, inadequate resource allocation to the chief aspects of the strategy, and budget constraints.  These setbacks may negatively impact the actualization of the planned strategies which may be detrimental to the company.

Conclusion

The firm`s market performance is fairly remarkable.  However, it needs to polish up some areas especially in doing its marketing. Additionally, the planned strategies are appropriate although they call for full commitment to their successful actualization.

  They include:

• The top management should ensure full commitment to executing the strategies
• Creative marketing frameworks should be established
• There should be intensive and interactive engagement with customers particularly on the social media platforms

References

Clint, J. (2017). Australian diary exports encouraged to look at new markets as...-ABC. Retrieved from www.abc.net.au/news/rural-news/...markets-for-australia-diary.../8654744

Council, A. D. (2016). Australian Diary Industry. Retrieved from www.aph.go.au/Documentstore.ashx? id=647492ba-ebbb-4e15-b436...sabld

Edward, G. (2007). Bankable Business Plans. Rowhouse Publishing.

George, G. (2013, May 29). The Use of simulation in Business-online Learning Tips. Retrieved from onlinelearningtips.com/2013/05/the-use-of-simulations-in-business/

George, S. (2010). Strategic Planning. Simon and Schuster.

Malcolm, M., & Ian, D. (2004). Market Segmentation: How to do it, how to profit from it. Butterworth-Heinemann.

Olivier, F. (2016). Corporate Level Strategy: Theory and Applications. Routledge.

Ray, D., & Graham, H. (2010). CIM Coursebook: The Marketing planning process. Routledge.

Sofat, R., & Hiro, P. (2015). Strategic Financial Management. PHI Learning Pvt Ltd.

Tom, B., Stalker, M., Lawrence, R., & Lorsch, J. (2009). Contingency Theory- Business Models/ MBA Theories. Retrieved from www.businessmate.org/Article.php? Artikeld=11

Ukessays. (2017). Functional Areas of organizations- UK Essays. Retrieved from https:// www.ukessays.com/essays/information.../ functional-areas-of-organization.php

William, P., & Ferrell. (2008). Marketing. Cengage.