Situational Analysis Of The A2 Milk Company In New Zealand, Essay.

The purpose of this assignment is to conduct a situational analysis on a branded business unit 1 in New Zealand. Your choice of brand or business will largely be dependent on your analysis of the business, the product categories and branding approach. You need to justify your choice.

You are required to conduct a thorough examination and identification of the relevant internal and external factors that could positively or negatively impact the development of the product/ service of the chosen NZ company

Current Market situation

Currently, the market situation of a2 Milk Company is very good in New Zealand and in other markets. It holds 10% market share in New Zealand dairy industry. In the year 2017, the global market of a2 Milk has reached to a value of US$ 4,410 million. As of 2016, the revenues of this organization are AS$337.3 million that has been increased from previous year (The a2 Milk Company 2018).

The a2 Milk Company possesses various key competencies which assist the organization to attain sustainable competitive advantage. The major competencies of this company are stated below:

Product innovation is one of the major competencies. It is developed an innovative process to produce the milk and other related products. Considering the needs and demands of targeted market, it is making changes in its manufacturing process. The company proposes to become very innovative and smart choice for dairy nutrition (Byrne et al 2016).

Additionally, The a2 Milk Company has a powerful workforce that is properly trained to produce high quality milk and other related products with the available resources. It has an effective learning and training program for its workers (The a2 Milk Company 2018).

The chosen organization has established strong relationships with the suppliers which sell raw materials to a2 milk. Due to this, the company is able to bargain the prices of raw materials. It helps the company to attain competitive advantage in global dairy industry.

For this, the key competitive advantage is that it is able to attract more customers by working on the above core competencies. The a1 protein free and quality products assist it to gain more competitive edge over others. Under branding, the company states that its products are pure and naturally occurring milk of cows that is free from preservatives and additives (The a2 Milk Company 2018).

The government regulations and policies are said to be an effect on the decisions of farmers. In New Zealand, some of the policies are in the favor of dairy and milk production. The company’s operations are affected by import laws and foreign relations of New Zealand. In the country, the a2 Milk needs to comply with the laws and regulations imposed by government (Lees-Marshment, 2018).  

There are various economic factors which can affect the growth and operations of a2 Milk Company in New Zealand. The a2 Milk is operating its business in mixed economy that runs on free marketing principles. In the country, dairy and agribusiness sectors are the major contributors to its economy. Milk and other related products are the basic need of customers and people buy milk regardless to financial position. There is an increase in the disposable income and people’s purchasing power. So, people are spending in buying quality milk products.  It has enhanced the business of a2 Milk in international market (Kelsey, 2015).

Upgraded and advanced technologies have made this possible for the a2 Milk Company to promote its milk products at lower costs. Considering the changing trends in the market, the company is using new and innovative technologies in its manufacturing and farming practices. However, it can increase the costs of production for the company but it is very profitable for the company as it can make its manufacturing process faster than traditional methods (Spreer 2017). Thus, it can be stated that technological factors have both positive and negative factors on business of a2 Milk Company.

Internal Analysis

The business of this company is highly dependent on the availability and health of cows. Epidemics and other diseases can affect the cattle that will reduce the milk quality. It has adverse impact on the supply of a2 milk according to demands of customers. Considering the environmental impacts, the company owns the cows which are certified to produce only A2 protein make unique milk products (Grant, 2015). It ensures that it provides highest quality and freshest delicious milk to its customers. Nowadays, people are becoming very much concerned about environmental protection so a2 milk needs to focus on this.

In this way, these external factors have both positive and negative impact on the business operations and growth of The a2 Milk Company. The company needs to focus on these factors so that it can stay profitable in changing external environment.

The a2 Milk is facing intense competition in the dairy industry in New Zealand. There are various players which are offering similar products with higher quality. Competitors of a2 Milk are divided into two categories i.e. direct and indirect competitors:

Ethics and social responsibility plays a significant role in the business as it assists the organization to attract more customers (Carroll 2015). Nowadays, people are very much concerned towards social responsibility and ethical efforts of any organization. They expect from businesses that they work for their benefits also. Considering this, a2 Milk Company supports the Australian non-profit organizations like The Children’s Book Council of Australia, The Song Room, Landcare grants program etc. (The a2 Milk Company 2018). It assists the organization to enhance its brand presence among more people of society. By behaving ethically, a2 Milk Company is able to pass its morals, values and beliefs to its employees and consumers. It plays a critical role in making the customers more loyal towards its a1 protein free milk products (Shenkar Luo & Chi, 2014).  

The below-table showcases the impact of emerging technologies and changing trends on the business of a2 Milk Company.

The a2 Milk Company is operating its business operations considering different segmentation characteristics of customers. Targeting and segmentation variables are discussed in the below-table:

The below are the two target market profile for the products and services of The a2 Milk Company New Zealand. The company is targeting babies for infant formula and adults for other products.

Conclusion 

It is hereby concluded that the a2 Milk Company is the organization that offers its products in New Zealand and other countries. The above report includes the situational analysis that is conducted by using different strategic frameworks like PESTLE analysis. The company is facing intense competition from some well-established brands. From the discussion, it is found that company is targeting on its customers considering their segmentation characteristics. Digital media and e-marketing plays an important role in promoting the products among targeted customers.

The above analysis shows that New Zealand market is advantageous for a2 Milk Company as it offers positive economic conditions to the company. By using updated techniques, the company can enhance its operations. Changes in the government laws and regulations can have adverse impact on the business operations of a2 Milk in New Zealand. The competition is intense in the market but this company is offering healthier and a1 protein free milk products that can differentiate it from other firms. To enhance its position and overcome the potential issues in New Zealand, this company should use effective strategies and expand its business in other markets. Moreover, it should comply with all the policies and health standards and focus on distinguishing itself from others.

References

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Carroll, AB 2015, Corporate social responsibility,  Organizational dynamics, 44(2), 87-96.

Cescau, PJ & Laszlo, C 2017, The new competitive environment. In Sustainable Value,  Routledge, UK.

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Kelsey, J 2015, The New Zealand experiment: A world model for structural adjustment?, Bridget Williams Books.

Lees-Marshment, J 2018, Introduction: Political Marketing and Management in New Zealand, In Political Marketing and Management in the 2017 New Zealand Election (pp. 1-5). Palgrave Pivot, Cham.

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