Globalization Supply Chains and Smallholder Farmers

Question: Discuss about the Globalization Supply Chains and Smallholder Farmers. Answer: Introduction: Campbells is one of the most easily recognized brands worldwide in the healthy food industry. Starting its operations in 1869, it has market presence in 120 countries and is headquartered in Camden, New Jersey. Their main products range from simple to serve meals, health beverages and the condensed ready to serve meals. The move by consumers from frozen food such as pizzas and microwave meals posed a challenge for Campbells, which led the company to undertake a review of its operations. This article presents the external and internal analysis at the business unit level to help Campbells to reposition itself in the market. Vision and Mission of Campbell Soup Company The company is guided by the mission to nourish the lives of people by offering them a wide variety of foods that are affordable and healthy. The vision of the company is to build a focused global food company with superior consumer brands that will nourish the planet, nourish our neighbors, and nourish our employees and customers. (Beller, 2016). The vision is buttressed by three core values of character, competence and teamwork. This will result in inspiring trust and to execute a viable business model that is cohesive across the organization. The external analysis is based on the Pest and Porters 5 force analysis of the company. Pest Analysis: The political analysis of Campbells is from the government policies that affect its operations across the 120 countries. Remaining politically neutral will guarantee its continued operations outside of the US, by having policies that discourage political activism in its operations. Politically stable countries will also provide for the environment in which it is conducive to operate. The economic consideration for Campbell is the economic status of the host country. A strong local economy will lead to higher disposable incomes with which to purchase the companys product. Too strong an economy may pose challenges of foreign exchange remittances and may affect its profitability. The social consideration is based on its CSR in the localities where it operates. (Pride, 2017). A strong CSR will have beneficial returns s inwards due to a better image perception and the greater reception to purchase its products. The strategic approach to staff welfare will result in better motivated employees, fewer industrial disruptions that will lead to increased productivity. Part of the CSR should include the use of the locals in the management cadres in order to have the feeling of ownership in the local enterprise. The technological consideration is to move towards cutting edge technology that is efficient and that has a distinct advantage over its competitors. Obsolete and inefficient technology will impact its overall core competencies and lower its profit margins. Use of technology especially a strong IT topology will help improve the business process to get feedback on customer patterns in order to improve the delivery to customers. The use of IT in its organizational architecture will help its global position as a globalized company. Porters 5 Analysis: The Porters 5 analysis is based on the following three key criteria for consideration. 1. Threat of new entrants: The threat of new smaller food processing companies is low, and the company needs to focus instead on the big players in the industry like Kraft foods and General Mills. The high levels of advertising and promotion in the food industry is itself a barrier to the new smaller companies. (Hoskisson Hoskisson, 2013). It also takes time to establish a market presence and trust with most of the big players having a history of more than 100 years. 2. Competition within the industry is high from Heinz, Kraft Foods and Progresso in the soup category. (Smith, 2013).The competition from generic soup brands can be overcome by distinguishing itself on the strength of a healthy brand.3. Bargaining power of suppliers was mitigated by launching in 2006 the Supplier diversity Program to enlarge its supplier base of quality ingredients. (McCullough, Pingali, Stamoulis , 2012). Thus Campbells is guaranteed of consistency in quality and supply of the ingredients it needs for its operations. Internal Analysis The internal analysis will look at the core competencies of Campbell as well as a SWOT analysis to determine the growth factors it can capitalize on. SWOT analysis: The strength of Campbells is that it has a strong capital base, balance sheet and net income to weather unforeseen financial challenges that may crop up suddenly. It has a strong and innovative culture that responds to the health consciousness of its customers such as the reduction of salt in its products. (Moss, 2013).It has a strong presence worldwide and in the US. It is also strong in community initiatives such as combating high blood pressure in America as well as childhood obesity. The weakness is that the sales of beverages and snacks has plummeted and has negatively impacted the soups brand. There is a strong competition in the soup brand market with new and cheaper generic brands. Opportunities are available to expand into new untapped markets and to expand its market presence in the baked snacks healthy beverages segments. The threats that it faces is the increasing costs of advertising and marketing due to the increase of the same by the leading competitive brands like Nestle. (Egolf McDonough, 2015).The volatility of the market and the unpredictability of consumer preferences is another threat to Campbells operations. The core competence of Campbells is in three elements which are the strong brand recognition, the large and efficient distribution network and the ability to quickly shift to consumer preferences when compared to its closest competitors. The Campbell brand is an iconic name that is easily recognized and would be the customers first choice. The brand has a large distribution network built over a period of 150 years that works to their advantage. The company has the ability through its research department to deliver quickly new customer preferences and to successfully introduce the new products. Competitive Analysis The processed food industry is dominated by Nestle, General Mills, Kraft Foods and the Heinz Company. All of them produce almost similar products and the difference comes in the marketing strategy taken and brand loyalty of customers. Nestle is famous for brands like Maggi and Friskies while Heinz is renowned for its strong ketchup brands. (Beller, 2016). All of the key players use almost the same key ingredients and similar advertising and promotion approaches. The key drivers across the industry are the increasing consumer awareness and preference for healthy foods and the need for processed foods that can be cooked quickly, preferably through the microwave. (Dess, Lumpkin Eisner, 2014). The rivalry is in market share retention and the penetration of new market segments. Campbells is planning to open new factories in Czech, Thailand and Vietnam in the quest to penetrate new potential markets. The outcomes can be looked at by quantifying the Competitive Profile Matrix (CPM) of the key competitors and identifying the key competitor in the industry. The CPM incorporates factors such as the level of product integration, successful new product introduction, distribution channels and IT capabilities. The CPM of Heinz is 3.47, Nestle 3.33, General Mills 2.19 and Kraft Foods at 1.84. From an analysis of the matrix, Heinz comes out clearly as the biggest competitor for Campbells. (Bradley, 2014). Heinz has strong the competitive advantage in its responsible use of social media networks to successfully launch new products into the market at a lower cost in terms of advertising expenses. Recommendations and the expected outcomes The strategy implementation at Campbells will include a comprehensive review and restructuring across the organization in the following areas: New focus on building a new brand image based on taste adventure as opposed to the previous emphasis of healthy consciousness. (Woodward, 2015). The outcome of this approach will target consumers who are keen to enjoy the experience of eating from the tastiness of the product and not just the health concerns alone. This approach will open up the market share of consumers between the ages of 10-40 who may not be motivated by health concerns but more on the taste experience. More revenues will flow in by tapping this new market. Develop new products for each country specific to that particular market and develop a distinct marketing campaign to accompany it. The localized new products will be tailored to capture the essence of the market and position it to be the market leader in meeting the expectations of that market by using research culture and flavor. The outcome will be greater reception of the company as a home grown solution provider and greater revenues from outside markets. The outside markets will help improve the overall revenue income of Campbells. Consolidate its market share in North America which contributes significantly to its revenues. This would include adjusting its prices and greater cost management. The outcome would be to position it as the leader in its home market which will be the psychological reference point for the other operations worldwide. These would also result in consistency in revenue even if the other market segments are not performing as strongly as the North American market. 4.Make soup from the better use of data. The use of modern Enterprise Resource Planning (ERP) software will unlock the treasury of big data it holds in order to hone in on strategies at the business level. The ERP will help in controlling and analyzing data down to the stock-keeping level in different regions and assess the performance of each product. Use of data as part of the business methodology will make it easier to reverse quickly negative trends affecting its business. In conclusion, the use of different analysis techniques have been shown that can result in Campbells improving its business process. The use of external and internal analysis each targeting specific value segments has been shown. The core competency of Campbell has been identified as well as the main advantages of its main competitor. The overall analysis has shown that there are gaps that Campbells can plug in order to improve its business process that will solidify its market share. This has been provided for in the recommendations given after the analysis. References Beller, R. (2016). Power souping: 3-day detox, 3-week weight-loss plan. New York, NY: William Morrow. Bradley, T. (2014). Case 32: Campbell: Is the soup still simmering. Slide Share. Retrieved from https://www.slideshare.net.Accessed April 8.2017 Dess, G. G., Lumpkin, G. T., Eisner, A. B. (2014). Strategic management: Text and cases. McGraw-Hill/Irwin. Egolf, K., McDonough, J. (2015). The Advertising Age Encyclopedia of Advertising. Routledge. Hoskisson, R. E., Hoskisson, R. E. (2013). Competing for advantage. Mason, OH: South-Western/Cengage Learning. McCullough, E. B., Pingali, P., Stamoulis, K. (2012). The Transformation of Agri-Food Systems: ""Globalization, Supply Chains and Smallholder Farmers"". Hoboken: Taylor and Francis. Moss, M. (2013). Salt, sugar, fat: How the food giants hooked us. New York: Random House. Pride, W. M. (2017). Foundations of business. Boston, MA: Engage Learning. Smith, A. F. (2013). The Oxford encyclopedia of food and drink in America. New York: Oxford University Press. Woodward, E.(2015). Deliciously Ella: 100+ Easy, Healthy, and Delicious Plant-Based, Gluten-Free Recipes. Simon and Schuster.