Strategic Position Plan: Arnott's Tim Tam Biscuits Expansion Strategy

This report outlines a strategic position plan for Arnott's Tim Tam biscuits, focusing on expansion into emerging markets like India, Bangladesh, and Myanmar. The strategy emphasizes penetration pricing to suit the purchasing power parity of these target countries. An external environment analysis using the five forces model identifies potential challenges and opportunities. The plan also incorporates corporate governance and aims to address unemployment in the target countries through franchise opportunities. Recommendations include surveys and interviews to ensure profitable market entry, highlighting the company's commitment to both ROI and ethical service.

Running head: STRATEGIC POSITION PLAN – TIM TAM BISCUITS
Strategic Position Plan – Tim Tam biscuits
Name of the student
Name of the University
Author notes:

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Executive Summary
The aim of this report is to prepare a strategic position plan for the Tim Tams biscuit which
is a product of the Australian company Arnott’s Australia. The company is one of the most
highly recognized brands of Australia and are also popular exports in Europe and the United
States. The company looks to venture into the emerging markets of the developing and under
developed nations such India, Bangladesh and Myanmar. Through the strategy, the company
plans to introduce products at lower prices so that it suit the purchase power parity of the
target countries. The external environment analysis carried out by using the five forces model
ensures that the operation of the company enumerates the hindrances that the company could
face which turned out to be quite favourable for the company. While carrying out the
operations, the company also aims to promote corporate governance and its efforts would
help in solving the problem of unemployment that is prevalent in the target countries. The
paper is concluded by recommendations such as interviews and surveys that could make the
availability of the product to new territories profitable for the company.

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Table of Contents
Introduction................................................................................................................................4
Product background...................................................................................................................4
Strategy formulation...................................................................................................................5
Strategy rationale.......................................................................................................................6
Prevalent Economic condition of the target countries.......................................................6
Population of the target nations..........................................................................................6
Absence of Rivals..............................................................................................................7
Expectations...............................................................................................................................7
Increased ROI.....................................................................................................................7
Improved Corporate Governance.......................................................................................7
Ethical service (Utilitarian Model).....................................................................................8
Literature Review.......................................................................................................................8
Penetration Pricing Strategy...............................................................................................8
Corporate Social Responsibility.........................................................................................9
The 5 forces Model – External forces................................................................................9
Conclusion and Recommendations..........................................................................................11
References................................................................................................................................12

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Introduction
Arnott’s biscuits is one the leading biscuit manufacturer of Australia
(campbellsoupcompany.com 2019). This report will put its emphasis on Arnott’s Tim Tam
biscuits which is rightfully the most popular biscuit of Australia. The company plans to
expand further to markets that are characterised by high income elasticity (Markusen 2013).
The product is already a market leader and the following strategic plan will focus on how the
brand can retain its place as a market leader. Penetration pricing is the strategy that the
company aims to use to carry out its operation in the target markets as the company believes
that pricing their products lower than will pose better attraction for individuals of low income
countries. The purpose of this report is to device a strategic or marketing plan for Tim Tam
biscuits. The paper will provide a complete theoretical analysis to describe the internal and
external market opportunities in the upcoming days with the number of potential competitors
going up. This report presents the company background, the strategy, reason behind choosing
the strategy and will assess the external environment using the five forces model.
Product background
Arnott’s biscuits was founded by William Arnott in 1865 and since then have been
producing quality biscuits. Arnott’s biscuits received global recognition when the Tim Tams
where created. The name ‘Tim Tam’ came from the name of the winning horse of the derby
of Kentucky 1958. Ian Norris gathered inspiration from British Penguin biscuit and created
the Tim Tams that are heavily appreciated all over Australia. The Tim tams come in a variety
of flavours such as the Chocolate cherry coconut, the iced coffee, the salted caramel and
vanilla and others (arnotts.com 2019). Tim tams are the Australian market leaders when it
comes to cream sandwich biscuits. They however aim to acquire market share in Asian

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countries that are characterised by high populations. Thus the company recognises a need of
creation of a strategic position plan.
Strategy formulation
The Tim Tams are positioned as the market leader in the realm of biscuits. The Tim
Tams are operating in an FMCG (Fast Moving Consumer Goods) markets and such markets
are subject to entrance of competitors at any point. The competition include products such as
the Temptins, the Chit Chats from New Zealand, the Choccy slams and the biscuits known as
Chocolate Surrenders. The company expects to formulate a strategy that can be considered as
an Intended Strategy (Hill, Jones and Schilling 2014). This has been done taking in
consideration the threats that might appear from the above mentioned rival brands.
Tim tams are priced around the $3.50 mark in Australia (shop.coles.com.au 2019).
This might transcend well in high income countries such as the United States and the United
Kingdom. This could however turn out to expensive in countries such as India, Bangladesh,
Myanmar and Indonesia which are characterized by low per capita income (Lewis 2017). The
company intends to introduce Tim Tam biscuits into such nations with the help of
Penetration pricing strategy. This would ensure that the product are affordable for every
individual of the low income countries. The Tim Tams would be served in smaller sizes that
it would sell through departmental stores and the company also plans to dedicate franchises
for the sale of the same. This reduces the overall cost of the product after it incurs the import
charges in the respective countries. The smaller biscuits would be priced much lower than the
Australian price.
The market opportunities of the above mentioned countries are huge as a result of the
population. The population of the countries can present a higher number of potential
customers who can be transformed into actual customers. Along with this company plans to

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introduce a sales promotion technique of giving a small token as a gift inside each packet of
the product (Familmaleki, Aghighi and Hamidi 2015). Giving gifts with products with the
products are said the increase the chance of the product satisfaction that the consumers face
from the consumption of the same (Oliver 2014).
Strategy rationale
The company plans to carry out penetration pricing in the mentioned countries and
also plan to utilise the sales promotion technique of gifting on the purchase of Tim Tams. In
the mentioned countries there exists a selection of huge variety of products that the people
can chose from. Maximum people of such countries have high income elasticity and that is
the reason behind majority of the population sticking to cheaper products. The normal price
of the Tim Tams would make it very unacquirable for the locals of such nations. With
penetration pricing, the company aims to position itself as the provider of high quality
products at cheap prices. Furthermore gifts will encourage certain groups of the population
(mostly children) to go for the company’s product rather than its local competitors.
Prevalent Economic condition of the target countries
The target countries are characterised by low level of capita income which is the main
source of formulation of the idea of introducing the Tim Tams at cheaper rates (Miller, Kim
and Holmes 2015). There exists a huge income gap between people in the target countries
which call for introduction of a product that can be enjoyed by the rich and less economically
able individuals, the formulation of the strategy. Following factor were consider before
framing the strategic position plan;
Population of the target nations
The target countries for which the product is devised for, are characterised by high
population (Koepfli 2015). The population makes the availability of potential customers more

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as compared to countries with low population. Greater number of people automatically
implies high number of potential customers who can be pitched with promotional activities
(free gifts with each pack along with advertisements on various media platforms). Arnott’s
identifies the opportunity that the population presents and the former looks to capitalise on
their planned investments with the strategies that have been put forward. The countries are
also said to have high rates of unemployment which is a need that will be catered to by the
company’s initiative to introduce franchises.
Absence of Rivals
Although there are presence of local rivals in each country, the products produced in
such countries are not even closely similar to the Tim Tams. Thus the Tim Tams will be
presented as an exclusive products in the countries. Furthermore, the absence of the
Australian brand’s rivals such as the Temptins, Choccy Slams and Chit chats makes the
market up for the company’s domination.
Expectations
The opportunity of capitalizing on the developing countries was rightly identified by
the company as it provides scope of achieving favourable results.
Increased ROI
Expanding from the local markets into new foreign territories is not new for the
company and with the plans to capitalise on the big emerging markets, the company expects
to generate a considerable amount of profit (Nartea 2017) As discussed above it is known that
the population of the above mentioned countries are huge. This factor gives the Tim Tams a
greater scope for capitalizing on the enormous market sizes. The size of the markets presents
a high number of potential customers, which can be additionally bolstered with the
introduction of sales promotion strategies.

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Improved Corporate Governance
It is the goal of every company to align their activities and operations with the interest
of the stakeholders (Tricker and Tricker 2015). The stakeholders are important to the
company and the following efforts of implementation of the strategic plan will help in
satisfying the demands of the stakeholders. Generating high returns from investments will
ultimately result in increased prices of the stocks and lead to further earnings per share.
Increased earnings per share is an indicator of good overall performance of the company and
will thus result in attracting new investors and satisfied stake holders.
Ethical service (Utilitarian Model)
Service to the community should be of key importance to every company (Cuzzi,
Estrada and Davis 2014). The operations of the company in will focus on markets that are
characterised by high population, such the Indian market. The inadequacy of the employment
opportunities is quite problematic for such countries. While operating in countries with high
rates of unemployment, the company would be providing employment to the people of such
countries. The company could have served the nation with the its products through online
services and big local dealer, it will still carry out such operations along with the delegation
of the sales to proposed franchises which will require sales personnel and administrative
officials and personnel. This would help in generating considerable amount of employment
opportunities.
Literature Review
Penetration Pricing Strategy
It is a strategy through which Arnott’s plans to introduce Tim Tam biscuits into the
market at a low price (Spann, Fischer and Tellis 2014). The price being low automatically
attract people and in case of economies featuring low per capita income and high price

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sensitivity, it is a strategy that marketer have been adopting since the coining of the concept.
This strategy also triggers a switch from a brand that the potential consumers were acquainted
to and helps in acquiring more market share. This strategy is applicable in the operation of
Tim Tams in the target countries and will help in generating additional sales apart from the
fact the product is highly differentiated which will generate sales on its own.
Corporate Social Responsibility
Corporate sustainability better known as corporate social responsibility is a regulatory
framework through which companies are said to provide service to the public; the citizens
and the stakeholders (Tai and Chuang 2014). Through this strategic plan the company aims to
generate higher amounts of revenue which will lead to satisfied stakeholders. On the other
hand, formation of franchises in economically challenged countries with high levels of
unemployment, will lead to reduction of the issue. Catering to both the factors will lead to
improved corporate governance. A company that is paying proper attention to Corporate
Social responsibility is said to be providing benefits and services that satisfy the needs of
both the stakeholders and the public in general (Bernardo et al. 2015).
The 5 forces Model – External forces
Michael Porter devised the 5 forces model, which is a tool that helps a company analyse
the competition that they might face while venturing into new operations (Dobbs 2014).
According to the model there exists five forces that help Arnott’s determine the external
conditions that it will face while taking new business initiatives or while shifting or
expanding market horizons.

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Figure: Porter’s 5 forces model
(Source: As created by the author)
I. Competition among existing companies (LOW): Although the target countries of
Tim Tam have a high number of competitors, they provide nothing close to the
product that is being offered by the company. Product differentiation is high, thus
there will be low rivalry among established firms.
II. Buyer’s bargaining power (LOW): The countries have zero sellers offering similar
product thus bargaining power of the buyers is low.
III. Seller’s bargaining power (LOW): Bargaining power of the sellers are low as a
result of availability of no local suppliers in addition to level of product
differentiation.
IV. Threat of new entrants (MODERATE): The possibility of new entrants is moderate
since the rivals companies can come up with similar products and others can start
export plans although one cannot replicate the company’s products.
Existing
competition
LOW
Bargining
power of
buyers
LOW
Threat of
entrants
MODERATE
Possibilty
of
Sunstitutes
VERY LOW
Bargaining
power of
seller
LOW

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V. Possibility of Substitutes (VERY LOW): The product that the company is offering
has no close substitutes especially if considering the new market.
Conclusion and Recommendations
To carry out the plan successfully in the target nations it is recommended that the
company should follow the following guidelines:
 Carry out research through questionnaires and interviews that will give the
company a proper idea about the taste and preference pattern of the
consumers.
 Carry out PESTEL analysis through which the company will be able to screen
and point out the possible points that they could improve on or take care of.
 Set CSR as a goal as that would help the company maintain satisfied
stakeholders and through which the company will be able to pay service to the
welfare of citizens of the country they are operating in.
The outcomes of the proposed strategic plan are deemed to be favourable for the long
term survival of the company. The price penetration policy that the company expects to
implement on the subject markets will help sustain the long term operations of the company.
It is recommended that a survey should be carried out in denser parts of the nations which
would give the policy makers a generalised idea about the preference styles of the consumers.
Thus it can be concluded that a favourable five forces model analysis, the prevalent economic
conditions and the population of the countries along with the fact that there is no competition,
ensure that the operation of the company would turn out to be successful, profitable and
charitable.

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References
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[Accessed 14 Jan. 2019].
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