Strategic Management Analysis of Bellamy's Organic - [University]

This report provides a strategic management analysis of Bellamy's Organic, a company specializing in organic infant food products. The report begins with an introduction to strategic management and then examines Bellamy's strategic context, including its ownership structure, history, size, business scope, major products, and target markets. A PESTLE analysis is conducted to assess the macro-environment in Australia, considering political, economic, social, technological, legal, and environmental factors. The competitive landscape is evaluated using Porter's Five Forces model, analyzing the degree of rivalry, bargaining power of buyers and suppliers, and the threat of substitutes and new entrants. Finally, the report identifies resources that provide Bellamy's with a sustainable competitive advantage, likely using the VRIO framework. The conclusion summarizes the key findings and the references provide sources for the information presented.

STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Question 1........................................................................................................................................3
Strategic context of Bellamy........................................................................................................3
Question 2........................................................................................................................................5
Macro- environment analysis.......................................................................................................5
Question 3........................................................................................................................................7
Competitive analysis....................................................................................................................7
Question 4........................................................................................................................................9
Identification of resources that provide sustainable competitive advantage................................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

INTRODUCTION
Strategic management is regarded as a process that involves continuous planning,
monitoring and analysis of organizational aspects for the purpose of meeting organizational aims
and objectives (Haggège et al. 2017). The present research work has been made on Bellamy
which deals in organic infant food products. The organization is engaged in producing
wholesome, nutritious and organic food products for babies, toddlers and children. The study is
also emphasizing on historical aspects of the business entity and along with that external and
internal business environment is also analyzed in the research work.
Moreover, discussion has also been included regarding application of Porter’s five forces
model which gives information about competitive aspects of the business entity. Alongside,
researcher has also stated the impact of external environment and competitive factors on
Australian industry. Lastly, discussion has been included about VRIO model which describes
competences and strategic capabilities of Bellamy.
QUESTION 1
Strategic context of Bellamy
Ownership
The business has ownership with several management teams which comprises of senior
team members such as non- executive chair person, executive deputy chair and non-executive
directors. Robert Woolley is the independent non-executive chair person who is responsible in
handling business processes. Andrew Cohen has been acting as the CEO of Bellamy since its
establishment. Bellamy also has several share partners and investors across Australia (Apenko
2017).
History
Bellamy’s Australia is an Australian food and beverage company which is also a
subsidiary of Bellamy’s Organic. It was founded in the year 2014 in Tasmania; however the
main headquarter is in Australia. The company was started as a family oriented business. As per
the historical aspects, in the year 2007, Bellamy’s organic food products were purchased by
Tasmanian Pure Foods (Barney & Mackey 2016). The company became successful and
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afterwards it was listed on Australian Stock Exchange. The company acquired outstanding
success afterwards when the value of share price increased to 30%.
Size and business scope
Due to organic food products, parents consider the brand highly nutritious for children;
hence this also helps in enhancing health aspects of children. After expanding the business
services, Bellamy got appreciation and recognition from different market places which also
attributed to enhanced market share (Bettis et al. 2016). The business has the opportunities to
expand more through adding nutritional products for the targeted customers.
Further, Bellamy can also add several new beverages in the existing product line so that
customer base can be enhanced accordingly. Currently, Bellamy is operating business in more
than 8 locations. Around 46 employees are working with Bellamy which helps the business to
serve best services to the customers. It is regarded as a developed business because no other
entity has online presence like Bellamy (Brem & Wimschneider 2016). The cereal products of
Bellamy are also certified by Islamic Coordinating Council of Victoria which allows the business
to export food products to other countries as well.
Major products and services
There are various products included in the product line such as milk, baby rice, baby
porridge, cinnamon breakfast, baby macroni, grain & fruit snacks, teething rusks, spelt pasta and
different baby meals (Brunetti et al. 2017). Specially, these ranges of products are developed for
three age groups starting from newborns, infants and toddlers. Afterwards, the category of
products included organic milk drinks which help children to complete the diet. All the food
products are essential for children to enhance the health standards.
Major markets of Bellamy
Bellamy is engaged in supplying in all the products to supermarket chains, independent
stores and pharmacy stores across Australia. The business sells products directly to consumers
through the online portal. Bellamy also exports its products to Chin, Hong Kong, Singapore,
Malaysia, Vietnam and New Zealand. The demand for Bellamy’s products enhanced and as a
result, the company started selling in Asia. Bellamy’s has been experiencing great success in
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international markets and this also allows the business to expand the services more in diverse
countries (Butler et al. 2016). In the year 2014, Bellamy had attained 95% of share in organic
segment of that market. Afterwards, the company had been providing organic food products to
customers of South East Asia and Singapore. Bellamy in Australia had experienced 12% increase
in the value and the business also achieved 3% market share in overall baby food categories. In
Australia, food products of Bellamy are sold in more than 3000 outlets. Along with online
portals, Bellamy has independent stores which include all sorts of baby food products which are
offered to people in the market.
QUESTION 2
Macro- environment analysis
PESTLE analysis of Australia
Political factor
Political climate in Australia is stable and that significantly contributes in overall industry
development; hence the business has also acquired 32% of total value on consumer food service.
Australia is also characterized by transparent legal reference that does not have any provision for
corruption; hence it is highly essential for service sector. However, all the business entities are
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required to consider the policies and guidelines followed by Australian Competition and
Consumer Commission (Daspit et al. 2017). Australia is a liberal capitalistic and democratic
nation which gives rights and obligations to all the desired consumers in every industry.
Australian government has the authority to control price laws; hence business entities are
required adhering all such policies. However, at the same time, such regulation directs the
business entity to monitor the practices so that appropriate standards can be developed. Political
aspects also include provisions that promotes competitive pricing, price effective of ineffective
markets and regulating other business policies (David & David 2016). Nonetheless, in the case of
export and import, it is crucial for the business entity to follow advices of exchange controls.
Economic factor
Australian economy depicts growth in GDP rate after the year 2009. However, due to
financial crisis, the country witnessed economic downturn as well that affected all the industries.
In terms of government funds, Australia is acquiring benefits as compared to other developed
nations. Similarly, food services and logistic industry shows that expenses can improve other
segments which can aid in declining the impact of economic recession. It is also analyzed that
the economy has prepared to renew inflationary pressure which brings economic stains in
Australia when price increase to around 2.9% (Della Corte & Aria 2016).
Additionally, the volume of food service market has been increasing with fast food
operators which are also encouraging opportunities of growth and success. According to recent
survey, it is ascertained that the culture of purchasing food products from supermarket chains
and other stores are increasing; hence food industry is growing at a faster pace. Therefore, it can
be said that economic aspects of Australia has been increasing continuously (Ethiraj,
Gambardella & Helfat 2016).
Social factor
Australia is highly associated with British-Australian traditions which drive people to
consider social and cultural values on higher extent. Consideration towards environment and
increasing immigration has changed the lifestyle of people. Furthermore, in this respect the labor
market is attributed towards income-based promotions which impede the social agility. Australia
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is also experiencing increased levels of per capital revenue which brings more challenges to
survive in competitive market place (Peppard & Ward 2016). Consumers are more likely to have
healthy eating food products as they are becoming aware about health beliefs. Social factors
highly affect the demand; therefore food industry is required to consider all such values.
Technological factor
There are numerous benefits of technological advancement which not only traces to cost
reduction, but also aids in adopting new measures to enhance quality dimensions. Technology
aids the business entities to connect more with customers so that they can facilitate word of
mouth publicity (Brunetti et al. 2017). Technology is one of the major sources through which
new service provision can be added and as a result, value to customers can be enhanced
accordingly. Because of technology, all the companies are emphasizing on the source of e-
commerce to make the service more convenient for end users. Furthermore, information
communication technology is also one of the strong drivers that contribute in enhancing
Australian growth through facilitating innovation and creativity.
Legal factor
Changes have been prevailing in the country which not only changes service provision;
but also it leads to alter the operations to satisfy the needs of customers. However, there are
varied legal regulation and existing codes that direct the business entities to change service
aspects. Regulation system is typically based on liberal principles; however this also requires
scrutiny of existing legal system (Min et al. 2016). In food industry of Australia, New Zealand
Food Standards Code provisions have been developed which is essential to follow. Legal factor
also restricts new entrants to enter in food industry. This safeguards legal aspects of the business
and as a result, food industry is getting maximum benefits. Further, Australian intellectual
property laws also offer other regulation which helps the industries to become legal in
competitive market place.
Environmental factor
It is also analyzed that Australian government has been paying adequate consideration
towards safeguarding the environment. Ruling body have developed several standards so that
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business entities can become more eco-friendly while managing different operations. Australia
has been emphasizing on Biological Diversity Convention and Agenda 21 for the purpose of
striving to sustain for longer time span (Apenko 2017). Therefore, this clearly depicts that
business entities are required to focus more on environmental aspects to get contribution from
community.
Conclusion of the analysis
From the above discussion, it is clear that all these factors are favorable in some areas;
however consistency in external market can assist the industries to grab more opportunities of
success and prosperity. Moreover, it is also analyzed that social factors can assist the companies
to enhance the chances of prosperity. However, the businesses are also required to use all the
opportunities in appropriate manner to improve the overall industry standards.
QUESTION 3
Competitive analysis
Porter’s five forces model
Preferences of customers are changing; hence the need for healthy and nutritious food has
been increasing in the market place. This is the core reason for which different business entities
are entering in the same market place. The level of competition has been increasing at market
place; hence food industry is getting affected.
 Degree of rivalry within the industry: In organic and natural food industry, large number
of entities is operating business. Several business entities are entering in this domain so
as to expand the service aspects. Demand for natural and organic products has been
increasing as people are heavily emphasizing on eating healthy food. In food market,
several entities are operating business such as Costco Wholesale Corporation, Wal-Mart
Stores and Kroger Company (Lin & Tsai 2016). All these entities have been emphasizing
on competitive prices so as to grab the attention of customers. They have been selling
natural and organic food products to the end users which enhance the chances of success.
 Bargaining power of buyers and suppliers: Organic and natural food products have been
buying food products from other companies which enhance the bargaining power of
suppliers. There has been a significant shift in consumer’s choice which affects
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profitability and success of baby food product company. The competitors have many
suppliers including regional and national wholesalers which enhance supplying capacity
as well (Sehnem, Roman & Machado 2016). There is no such business who is dependent
on any single supplier; therefore the power of supplier enhances accordingly. Hence,
competition has been increasing because of this aspect. However, on the other hand,
customers have huge bargaining power because of the level of substitute products. Such
products have been assisting the business entities to grab the attention of customers on
higher extent. Moreover, potential customers also show greater commitment towards the
organization especially when they get suitable services from the business organization. In
addition to the same, it is also ascertained that demands of customers have been changing
because they are more concerned about consumption of healthy food products (Wheelen
& Hunger n.d.).
 Threats of new entrants and substitute products: Substitute products exist more in
natural and organic food domain which not only affects interest of customer, but also it
impacts the performance of business entities. There are various organizations providing
cheaper and affordable services to the consumers; therefore customer usually switches to
such organizations (Campbell & Park 2017). Any such organization which has non-
organic food products would not be able to generate competition for organic food Product
Company. Since, people more likely to have healthy choices; therefore existing business
organizations can act as barriers for organic food product company. In this industry,
small retail entities can also create competition for large companies; thus focus is
required to be laid on quality dimensions.
Impact of competitive forces and macro environment on the overall industry
Competitive forces show the core competency and standard of business in managing its
operations in external market place. There are varied industry players that can impact the value
and processes of other entities; hence this also affects external business environment.
Controllable and uncontrollable environmental factors changes the way business operates its
activities; therefore in this respect food companies are required to emphasize more on social and
economic factors (Krishnaswamy 2017). For instance – business can acquire more profits in the
case when it meets the needs and demands of customers. At the same time, consideration on such
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thing can also help the entities to identify all such measures through which opportunities of
success and growth can be encouraged.
Conclusion of the analysis
From the above analysis, it is identified that competitive environment can be created if
the business know the way to deal with controllable and uncontrollable measures. While
developing business strategies, it is essential for organizations to analyze all the dimensions that
could change the performance of subsequent company.
QUESTION 4
Identification of resources that provide sustainable competitive advantage
VRIO model
It can be stated that technology and employee are the two most significant resources
which are going to provide sustainable competitive advantage to Bellamy. Further, the company
will be required to invest money in upgrading its technology at regular intervals. The use of lasts
and innovative technology is going to support in delivering fast and accurate services to the
customers (Inman & Nikolova 2017). In addition to this, it will also assist in enhancing the
degree of customer satisfaction. The use of technology can be carried out to identify the
changing demand of baby food products and develop new product accordingly. On the other
hand, employees are considered as one of the most vital assets for any business enterprise.
Bellamy operates with a team of highly skilled and talented personnel’s. Human resources will
support in delivering satisfactory services to customers and therefore, will help Bellamy in
getting a competitive advantage over other market players. The effectiveness of Bellamy’s
resources using VRIO model is explained below as:
Valuable- The human and technological resources employed by Bellamy can be termed
as valuable because they are adding direct value to the company. The use of technology is
helping the organization to deal with external threats and challenges linked to changing customer
demand and increasing competition (Kar 2017).
Rare- It can be stated that both technology and human resources are rare as they have
been adopted by only a few companies. Bellamy is making use of advanced technology such as
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ECRM software to maintain long term relationship with customers and attain brand loyalty. On
the other hand, the substitute of skilled and talented personnel’s working in the company is also
not easily available (Sudrajat & Amin 2016).
The cost to imitate- The cost to imitate the existing resources of Bellamy is very high.
For example, the technology and human resources cannot be duplicated easily, and at the same
time, the substitute is also not available easily.
Organized to capture the value- Bellamy has also held its management practices and
systems in such a way that these resources are adding direct value to the company.
Thus, the application of VRIO model has highlighted that Bellamy is getting a
sustainable competitive advantage by employing different technological and human resources.
However, it can be critically argued that the selected business needs to carry out effective
monitoring of all its resources and should upgrade at regular intervals according to the changing
business environment.
With the help of VRIO model, it is being identified that Bellamy needs to develop its
resource capability to enhance the competitive potential (Johansson & Kask 2017). All the four
dimensions state that Bellamy has to expand the services so that attention of large number of
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customers can be acquired. With the help of this model, internal resources and capabilities have
been identified; hence changes can be implemented in strategic aspects of the business.
Moreover, the dimension of value contends that Bellamy is required to add all such food
products in the list that help in enhancing growth and success opportunities. Organizational
resources are highly valuable; hence it is required for Bellamy to chiefly focus on optimum
utilization.
In order to sustain in competitive market place, Bellamy has to enhance the resource
capability through adding several service provision (Farkas 2016). This will also be useful in
encouraging business performance of Bellamy. Long term sustainability and other necessary
benefits can be acquired through putting efforts in increasing value of services. Duplication of
activities shall also be avoided at the same time so that value of resources can be encouraged.
Services should be suitably organized to deliver only requisite products to the potential
customers of Bellamy. Thus, the model can also encourage the business to encourage the value
of all its systems.
CONCLUSION
Summing up the entire research work, it can be said that Bellamy has to emphasize more
on strategic values so that business can become more competent in external market place. It is
also identified that external environment of Bellamy has favorable impact on business which not
only enhances success prospects; but also it aids the business entity to provide value for
customers. Moreover, competition has been increasing in this market place; therefore Bellamy
needs to show greater consideration towards meeting the needs and demands of consumers.
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