The Strength of the Companies - Coursework Example

? Case Study Review inserts his/her s Department’s SWOT Analysis Dairy Crest plc. The company’s biggest strength is its diversified brands which include Cathedral City, Utterly Butterly, Clover, St Ivel and Frijj. This means that the losses of any one brand may be recovered through profits from others. Therefore, clearly the company has not put all its eggs in one basket and has diversified risks. Furthermore, this reflects a well thought out segmentation strategy whereby the company has developed different dairy brands for different customer segments, thereby catering to the unique preferences, tastes and needs of each. However, one weakness reflected is that of high operating expenses. This is because the revenue is in “billions” whereby the net profit is only amounting to a few “millions”, thereby reflecting high expenses. High expenses could lead to operational inefficiency as well as higher prices for customers; therefore, they need to be controlled. On the other hand, the company has the opportunity to grow as it is currently only medium sized. By employing more people and increasing operations it can take advantage of economies of scale and lower prices for customers. Finally, it is likely that the company is facing the threat of high expenses owing to factors beyond its control such as rising labor costs and interest rates. 2. Fitness First Group Ltd Fitness Ltd’s strength lies in its geographic diversification as it is “international” in nature and has operations in 15 countries. Therefore, it can take advantage of lower costs in other countries as well as reduce legal and regulatory risks by operating in different countries. However, it may potentially possess weakness in the form of mismanagement of multi-cultural international markets. Furthermore, since the company is large in size and scale, HR conflicts and conflict between the strategies for home country versus host country is likely to be inherent. The company faces the opportunity of further expanding its geographic base and expanding into other countries, such as emerging BRIC economies, to take advantage of the rising health issues and increased demand for fitness by consumers in these countries. Furthermore, it can “go public” rather than remaining a private limited company as doing so will give it access to greater amount of finances and capital to run the business. This is particularly relevant because the company has international operations which may require share capital to sustain them. Finally, the company faces the threat of intense competition owing to its international operations. It is worth noting that the company may have to compete with already established players in countries other than its home country which would entail a potential risk of failing in those countries altogether. Furthermore, customers’ preferences, habits and lifestyle may be different in these countries and this is particularly relevant since the company is offering lifestyle-based service- fitness. 3. Oxford BioMedica plc The company’s strength lies in its association with an already established brand- “Oxford University” which shall give it enhanced reputation compared to its competitors. However, its weakness is that the company may require greater funds for further research and development as scientific research is typically cost. An amount of ?130mn may, therefore, be insufficient for this purpose. As far as opportunity is concerned, the company may have access to greater funding owing to funds provided by health and scientific organizations that generally have huge budgets for research and development. This funding can be used to develop innovative medicines as is the core mission of the company. However, the threats are also likely to be high owing to the controversy surrounding “gene-based” medicines. This means that lack of political will and regulatory compliance may delay patent protection which could ultimately put the large funds on a backburner and threaten survival of the company. PEST Analysis In light of the above, the company most likely to succeed is Dairy Crest plc. 1. Political Milk quotas are expected to be abolished by 2015 in light of increased competition in the dairy sector. Furthermore, the government of U.K is focused at reducing “red tape” and loosening control of the dairy market in U.K (Dairy UK, 2013). This is complemented by the introduction of voluntary code of practice by labor unions in the U.K to ensure better working conditions for workers in the industry (Dairy UK, 2013). The government of U.K has been actively involved in enhancing the profitability of the sector; therefore, greater funding and/or initiatives hold a strong future for this sector and companies operating within it. 2. Economic The demand for dairy products is expected to increase in the U.K economy owing to development and population growth. Furthermore, the growth in population and demand in emerging countries is expected to generate greater business for companies in the Dairy sector (Dairy UK, 2013). However, the prices of dairy products have increased owing to rising costs of inputs over the years. Furthermore, the weather has proven to be a challenge to the dairy sector in U.K in terms of milk production (Dairy UK, 2013). Nevertheless, production has increased over the past years. 3. Social Dairy products have been a part of U.K unique cultural heritage with porridge and cereals being the most consumer breakfast in the country. Therefore, the lifestyle and consumption habits of the individuals signal positive growth to continue for this sector. Furthermore, there has been greater concern for reduction of “fat” content in dairy products to ensure a lean and healthy diet. 4. Technological Finally, opportunity lies in the development of “anaerobic digestion technology” that is aimed at reducing greenhouse emissions (Dairy UK, n.d.). This is in line with environmental move towards ensuring food security and green environment. Furthermore, technology is also allowing for control of “fatty acids” in this sector (NMR, 2013)which has been a concern amongst health-conscious consumers in the U.K. Also, work is being done on the enhancement of cow health and nutritional value of milk in this sector. Finally, controlling diseases in livestock requires technological up gradation. This may involve investment in research and development and funding by the government. References Dairy UK, 2013. MASSIVE GROWTH POTENTIAL SIGNALS GREAT FUTURE FOR UK DAIRY. [Web] Available at: HYPERLINK "http://www.dairyuk.org/media-area-mainmenu-270/item/massive-growth-potential-signals-great-future-for-uk-dairy" http://www.dairyuk.org/media-area-mainmenu-270/item/massive-growth-potential-signals-great-future-for-uk-dairy [Accessed 02 December 2013]. Dairy UK, 2013. VOLUNTARY CODE OF PRACTICE REVIEW AN OPPORTUNITY TO CREATE AN ‘ENDURING INDUSTRY FRAMEWORK’. [Web] Available at: HYPERLINK "http://www.dairyuk.org/media-area-mainmenu-270/item/voluntary-code-of-practice-review-an-opportunity-to-create-an-enduring-industry-framework-2" http://www.dairyuk.org/media-area-mainmenu-270/item/voluntary-code-of-practice-review-an-opportunity-to-create-an-enduring-industry-framework-2 [Accessed 02 December 2013]. Dairy UK, n.d. Food Security and the UK Dairy Industry. Report. London: Dairy UK: The Voice of the Dairy Industry Dairy UK: The Voice of the Dairy Industry. NMR, 2013. Technology advances fatty acid control in dairy industry. [Web] Available at: HYPERLINK "http://www.nmr.co.uk/technology-advances-fatty-acid-control-in-dairy-industry/" http://www.nmr.co.uk/technology-advances-fatty-acid-control-in-dairy-industry/ [Accessed 02 December 2013]. Read More