Strategic Management Analysis of Fonterra

Running head: STRATEGIC MANAGEMENT ANALYSIS OF FONTERRA
STRATEGIC MANAGEMENT ANALYSIS OF FONTERRA
Name of the Student
Name of the University
Author Note

1STRATEGIC MANAGEMENT ANALYSIS OF FONTERRA
Table of Contents
Introduction....................................................................................................................2
Discussion of Australian food focussed agribusiness sector..........................................2
Identification of international opportunities for Fonterra..............................................4
International strategies to be implemented for Fonterra................................................4
Appropriate and inappropriate mode of entry to international market for Fonterra
based on Porter’s Diamond Model.............................................................................................6
Recommendations for future strategic direction of Fonterra company.........................7
Conclusion......................................................................................................................8
References......................................................................................................................9

2STRATEGIC MANAGEMENT ANALYSIS OF FONTERRA
Introduction
Fonterra Co-operative Group Limited is a multinational dairy based co-operative that
has its operations in New Zealand. The co-operative is mainly owned by more than 10,000
farmers of New Zealand. Fonterra is mainly responsible for around 30% of the total dairy
exports in the world with the revenues that exceed 17 Billion NZ Dollars (Fonterra.com
2019). The organization has been able to gain the topmost position in the industry with
respect to the amounts of revenues that have been earned. Fonterra had started its operations
in the dairy industry of New Zealand in the year 2001 after the merger of two of the biggest
dairy based co-operatives namely, Kiwi Cooperative Dairies and New Zealand Dairy Group
(Fonterra.com 2019).
The report will be based on the analysis of the agribusiness based sector of Australia
in which Fonterra operates. The international opportunities that have been gained by Fonterra
in the years of its operations in the dairy industry will also be analysed in the report.
International strategies that have been implemented by Fonterra in order to maintain the
operations is considered to be an important part of the analysis that will be made in the report
(Fonterra.com 2019). The country that can be taken into consideration for the study is India.
The environment in India will be analysed with the help of the Porter’s Diamond Model.
Recommendations will be provided based on the ways by which different strategies can be
implemented by Fonterra in order to maintain the operations (Azavedo and Walsh 2018).
Discussion of Australian food focussed agribusiness sector
Agribusiness is considered to be an important factor that is able to provide major
levels of contribution to the economy that has been developed in Australia. The political
condition of the country and media is able to affect the operations of organizations that are a
part of the agribusiness sector. The local as well as the global players have increased the

3STRATEGIC MANAGEMENT ANALYSIS OF FONTERRA
levels of attention that are provided to the agribusiness based operations of different
organizations. The rise that has been noticed in different Asian countries is also able to affect
the development of organizations that are a part of the Agribusiness Sector (Barber 2018).
The levels of involvement of the customers is highly important for the operations that are
developed by the agribusiness organizations in the industry. The levels of competitiveness in
the industry have also increased due to the increase in demands of consumers. The changes
that have taken place in the industry are able to affect the traders, processors and the retailers
as well. The growth of demands in the industry is affected in a huge manner by the food
demands that have increased in the countries like China and India (Clune 2019).
The development of open markets in the industry has provided major levels of support
based on the formation of new technologies and proper creation of jobs as well. The market
based opportunities that are offered to the organizations in agribusiness industry are related to
the international competitors that exist in the country. The adoption of latest levels of
technologies has been able to play a major role in the development of operations of
agribusiness organizations. The government of the country has also stared providing major
levels of support based on the use of low cost based labour in order to maintain the operations
of agribusiness organizations (Dowling 2018). The cultural and financial values that have
been gained by the agribusiness organizations are related to the unified nature of Australian
agribusiness sector. The diversity levels in the agribusiness sector of Australia are high and
the operators who are involved in production activities and agricultural services are a part of
the entire food chain that is developed. The operators mainly consist of processors,
wholesalers, the producers of agricultural commodities and the manufacturers as well. The
weather based patterns of Australia have an impact on the organizations which are a part of
the agribusiness sector (Hunter et al. 2019).