ANZCO Foods Limited

ANZCO Foods Limited is a global organization that sells beef and sheep meat. This case study explores their venture into the Chinese market and the challenges they face.

Running head: ANZCO FOODS LIMITED
ANZCO Foods Limited
Student’s Name:
Institution:

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Table of Contents
1.0 Situation Analysis......................................................................................................................3
2.0 Problem Statement.....................................................................................................................3
3.0 Alternatives and Evaluation of Alternatives..............................................................................4
4.0 Recommendation and Implementation......................................................................................8
5.0 Implementation..........................................................................................................................9
6.0 Appendixes..............................................................................................................................11

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1.0 Situation Analysis
The company is one of New Zealand's greatest exporters, selling beef and sheep meat
around the world. Since inception in 1984, it's made proceeds every year; and. ANZCO earned
NZ$1.1 billion in 2010. The division sold some products in China and became eager to venture
into the massive market. The company’s reputation gets attributed to healthy production, quality
products, utilization of quality assurances policies-comprising sustainability and traceability.
This permits integrity of food safety programs, company’s products, and animal welfare. It
implies that company’s relationship with all the stakeholders in the business is essential to the
success of the business. ANZCO Foods Limited is a self-motivated, global set of organizations
which get, prepare as well as advertise sheep and beef items. It is one of biggest exporters of
sheep and beef meat globally. The China market is developing quickly. The company is hoping
to choose whether to additionally enter the China market and assess its strength for sheep meat.
The case investigates a huge, divided and changing new market that offers significant
development potential. The decision to venture into the market involved many factors and
comprise of channel, product price and promotion. Also, the distribution but was hindered with
the need to balance what can be done in China with international firms. The last option was to
employ performance by utilizing pricing where prices were different in different markets and
also at different time.
2.0 Problem Statement
Sheep in Australia is almost a noble job. Approximately 12,250 sheep get reared according to
experts; the number has declined from 22,000. The foam owner sheep ranges from multi-farm to
corporate with partnership arrangements to small family farms. Farmers have options of selling
their products either to stock agents or directly to the meat companies. Also the meat processing

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is a highly competitive sector where there are 100 processing companies with ANZCO
dominating the market at 75%. The competition is attributed to excess capacity as well as the
seasonal production; the sheep meat is processed and 98% get frozen so as to lower the value
cuts like forequarters and will be reprocessed to obtain various assortments of products like lamb
roll. The mainstream of the goods distributed to China are lamb flaps. The will be reprocessed,
thawed and de-bone and refrozen so that they can be used to make desired meat assortments
types for hot pot. The company is privately owned and it stand at the worth of NZ$1.25 billion
with 3,000 employees globally. Besides the processing of meat, the company also produces other
products with the use of by-products and includes casings, belts, wool, etc. The presence in
China presents an opportunity for the company to venture deep into the market. The company’s
reputation gets attributed to healthy production, quality products, utilization of quality assurances
policies-comprising sustainability and traceability. This permits integrity of food safety
programs, company’s products, and animal welfare. It implies that company’s relationship with
all the stakeholders in the business is essential to the success of the business and hence the need
to venture into the international market
3.0 Alternatives and Evaluation of Alternatives
1. Targeting the Chinese Market
Retail: In the China market, many of the clients obtained their meat products from ‘wet
markets’. These are traditional food vending shops that does not have any regulations. These
create a concern on the source of meat, the health and safety and thus hygiene is a problem. It
was reported that in 2003 there was food epidemic like the avian influenza and SARS. The hyper
stores took the opportunity to restore sanity and it was fast taking center stage in many cities like
Guangzhou, Beijing, Shenzhen, and Shanghai. Through these safety and standards of food

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became an assurance to the customer as well as quality was never compromised. Later the
international food retail stores like the Carrefour, Makro, Wal-Mart among the many begun to
lay foot in the lucrative market of China. These has presented good base as clients in these cities
depend on these big corporation for their food requirements. The big stores offer high quality
goods, are conveniently located, there is better control in terms of quality, and a wide variety of
imported food-products. These is attributes are appealing to the clients and thereby inclining
them to be drawing their food-stuffs on selected famous restaurants. The private firms have small
percentage in these Chinese market and they are expected to grow given the fact that customers
have the notion that branded items are of quality. Presently, the dominating brand is the local
domestic brand but the trend is changing because the big food vendors in the likes of Carrefour
are now developing their own brand labels on the products.
Food Service: The food service is worth stood at $366.9 billion as ta 2011 and was expected to
grow to $494.8 billion with 5.1 billion services out lets. The sector is divided into two categories:
the full service with 75% markets sharer and the fast-food restaurants having 25% market share.
Of interest is the fact that 6% of the market were served by 100 restaurants while the remaining
major part of the market which is in the main cities were served by 200,000 restaurants. Even
though the number of outlets is huge, it is not sufficient to quench the market. The high-end
restaurants are growing in number with focus on cities where quality of food and services is
mandatory. These restaurants align their strategic position to places that are well-connected with
social amenities and sophisticated luxuries such as fashion stores, and recreation centers.
China’s Consumers: The population of China is very big and keeps on increasing every year.
By 2011 it was 1.3 billion people and is projected that it increases by 6 million people every
year. The trends noticeable in China are high incomes, high standards of living and urbanization.

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Urbanization resulted in over a half of the people to live in the cities and the remaining live in
other sections of the country-this is a very big market to target. The overall consumption is not
the same in different regions. The consumption of meet is not the same between the Northwest
and East. In Northwest of China, meat is the one of the diet and this is attributed to the
Mongolian and Muslim cultures. The consumption of meat in the eastern part-the location of ties
one and two cities are situated. In terms of rural and urban orientation, sheep meat consumption
is highly consumed in the urban as compared to the rural were it is affected by the culture as well
as availability of cheap pork meat as an alternative.
China’s Value Chain for Sheep Meat
Sheep Meat Production: China is a biggest manufacturer of animal’s protein where it is leading
in sheep meat, followed by pork, poultry and beef respectively. Despite the fact that they produce
varied types of meat, majority of the population consume sheep meat and also the country export
this as well. It was established that in 2009, it exported 82,223 tons of sheep meat which was
higher when compared to 39,490 in 2000: The main supply of meat to China comes from
Australia and New Zealand and Uruguay is also following suits and has enhanced its export.
Australia supplies 99% of the chilled lamb accounting to 6% of the meat imported. New Zealand
produces shoulder chops and lamb rolls and distributed to selected restaurants.
Distribution: The distribution system is still poor and this resulted to the loss of $9.25 billion of
food as a result of transportation. However, there are other areas which work well like the
shipping services. It is established that 90% of meat products were delivered through the sea.
The use of trucks is another way of distributing the products but the problem is that there are
very few trucks available for the task. This now permits product to move from one entity to the

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next until it arrives at the final point as a result of the value chain stages. Some firms are now
increasing investment in developing cold stores as this will solve the issue to a greater extent.
The Processing Industry: There is rapid development of processing industries with a focus of
processing pork meat. The aim is to target slaughtering 10 million goats per year with targeting
1.8 million tonnes of meat each year. This is an area that is not ventured. In this respect, there is
still room for other sectors to be ventured. Additionally, there is quick development of quick-
frozen products with enhancements in the cold chain substructure. There is also increase in the
ownership of domestic refrigerator and this saw product manufacturing 3000 quick-frozen
products firms in China.
2. Australian Government Efforts in Developing Chinese Market
Australia’s Market Development Initiatives: The government is taking part in promoting its
products to the Chinese market and this is seen through the training provided to retailing staff in
four-outlets. CityLife and Lianhua super-markets which are parts of Hangzhou-Lianhau-
Huashang Group. The training centered on cutting and cooking, where demonstrations were on
beef-strip loin as well as knuckle. Customers got the chance to taste and the outcome was that
sales beef buckles went up meaning that customers got attracted. Furthermore, second tier cities
were targeted in which chef programs were conducted. There was incorporation of the Australian
beef meet into the Chinese Cuisine. The other initiative was the culinary contest and later
exhibition. The event that was for three days attracted over 30,000 people. A website was
developed to target Chinese market with products and particularly lamb and sheep meet.
The Market Development Initiatives: The industry organizations in New Zealand are carrying
our marketing and promotions in China with the tag Beef-Lamb. The aim of this initiative is to
create and understanding and awareness as well as the need of the New Zealand meat in the

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China’s hotel industry. In doing this, the attributes that are promoted are that the sheep and meat
from New Zealand are nutritious, safe, and natural from grass-fed from the farm. In order to
support the food service sector, the organization contacted training on industry professional chef
on how to prepare lamb and sheep meet. Additionally, they taught sale and support services in
food service sector as well as taking part in joint food advertising in the hotels and other
stakeholders like the importers of sheep and lamb meet.
The Reputation of Sheep Meat: The reputation of New Zealand is well known for sheep meet
and this is attributed to the numerous searches in the search engine-Baidu where 1,690,000
showed relevant results; a number of them shows information on meet suppliers and 32 were
from New Zealand. Another aspect is the food safety which is an asset to the country. The food
and beverages in New Zealand are clean as well as safe. Also, the quality of New Zealand’s meat
if of quality gives a mileage to the clients and packing and branding was carefully designed so as
to lock out the counterfeit met products.
Supplying the Product to the Market: ANZCO have to supply sheep meat to China as there is
no New Zealand-based companies’ importers supplying. The companies importing are from
Uruguay and Australia. The New Zealand companies depend on importers like Heilongjiang
Grand Farm Group. The company buys from meat from Alliance-a processing meat company in
New Zealand.
4.0 Recommendation and Implementation
1. The government is taking part in promoting its products to the Chinese market and this is
seen through the training provided to retailing staff in four-outlets so the company has to
take advantage of the promotion and marketing and venture fully into the market.

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2. Additionally, the company still has 36% Free on Board (FOB) and sells low-end product,
this need to increase and change the product to high end as there is a big market and thus
ANZCO have to target high-end and expat hotel chains instead of general population.
3. Furthermore, the company to target regions in the South where sheep meet is not
popularly known like Shanghai. The company is business in Taiwan provide a good
platform where direct presence get grown through the adoption of the marketing strategy.
5.0 Implementation
Areas of Concern Action to be taken Time frame
High-end products Develop special of high-end
products where there is big
unexploited market.
Immediately
Expansion to Emerging
Markets
Carrying our marketing and
promotions in China with the
tag Beef-Lamb. The aim of
this initiative is to create and
understanding and awareness
as well as the need of the New
Zealand meat in the China’s
hotel industry.
Done in one year and on
quarterly basis
Target Market The population of China is
very big and keeps on
increasing every year. By
2011 it was 1.3 billion people
and is projected that it
Immediately

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increases by 6 million people
every year. The trends
noticeable in China are high
incomes, high standards of
living and urbanization.
Urbanization resulted in over a
half of the people to live in the
cities and the remaining live in
other sections of the country-
this is a very big market to
target
6.0 Appendixes

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Five Forces Model
Porter recognized that organizations likely keep a close watch on their rivals, but he encouraged
them to look beyond the actions of their competitors and examine what other factors could
impact the business environment. He identified five forces that make up the competitive
environment, and which can erode your profitability. These are listed below and featuring
ANZCO Limited
Competitive Rivalry:
The international food retail stores like the Carrefour, Makro, Wal-Mart among the many begun
to lay foot in the lucrative market of China.
Supplier Power:
ANZCO have to supply sheep meat to China as there is no New Zealand-based companies’
importers supplying. The companies importing are from Uruguay and Australia. The New

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Zealand companies depend on importers like Heilongjiang Grand Farm Group. The company
buys from meat from Alliance-a processing meat company in New Zealand.
Buyer Power:
 The population of China is very big and keeps on increasing every year. By 2011 it was
1.3 billion people and is projected that it increases by 6 million people every year. The
trends noticeable in China are high incomes, high standards of living and urbanization.
 Urbanization resulted in over a half of the people to live in the cities and the remaining
live in other sections of the country-this is a very big market to target. The overall
consumption is not the same in different regions.
 The consumption of meet is not the same between the Northwest and East. In Northwest
of China, meat is the one of the diet and this is attributed to the Mongolian and Muslim
cultures.
Threat of Substitution:
 Meat processing is a highly competitive sector where there are 100 processing companies
with ANZCO dominating the market at 75%.
 The competition is attributed to excess capacity as well as the seasonal production; the
sheep meat is processed and 98% get frozen so as to lower the value cuts like forequarters
Threat of New Entry:
 The dominating brand is the local domestic brand but the trend is changing because the
big food vendors in the likes of Carrefour are now developing their own brand labels on
the products.

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SWOT Analysis
Strengths:
 Dominating the market at 75%.
 The company is privately owned and it stand at the worth of NZ$1.25 billion
 The government is taking part in promoting its products to the Chinese market and this is
seen through the training provided to retailing staff in four-outlets.
 Marketing and promotions in China with the tag Beef-Lamb
 Reputation of New Zealand is well known for sheep
 Aspect is the food safety which is an asset to the country. The food and beverages in New
Zealand are clean as well as safe.

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 Also, the quality of New Zealand’s meat if of quality gives a mileage to the clients and
packing and branding was carefully designed so as to lock out the counterfeit met
products.
Weaknesses:
 Poor storage facilities (cold food chain)
 The competition is attributed to excess capacity as well as the seasonal production; the
sheep meat is processed and 98% get frozen so as to lower the value cuts like
forequarters.
Opportunities:
 Presence in China
 The government is taking part in promoting its products to the Chinese market and
this is seen through the training provided to retailing staff in four-outlets and
 Marketing and promotions in China with the tag Beef-Lamb
Threats:
 The dominating brand is the local domestic brand but the trend is changing because the
big food vendors in the likes of Carrefour are now developing their own brand labels on
the products.