Strategic Analysis of Bega Cheese: A Detailed Case Study

This case study provides a comprehensive strategic analysis of Bega Cheese, an Australian dairy company. It begins with an overview of the organization, its mission statement, and objectives. The analysis includes external factors using Porter's Five Forces and PESTLE analysis, covering political, economic, social, technological, environmental, and legal aspects impacting the company. Internal analysis is conducted through a SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. The study also incorporates a VRIO analysis to evaluate the company's resources and determine its sustainable competitive advantages. Key issues faced by the organization are highlighted, followed by a re-evaluation of the mission statement, a discussion of strategies, and an examination of potential fallouts. The analysis aims to provide a thorough understanding of Bega Cheese's strategic position and challenges within the Australian dairy industry. Desklib provides access to this document and numerous other solved assignments for students.

Case Study and Strategic Analysis
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Executive Summary:
The paper is focused in the elaboration of the business conduction of a chosen company in the
form of the Bega cheese. The company is one of the renowned names in the Australian Diary
industry. The paper produces a brief overview of the organization along with the mission
statement and the description of the mission of the mentioned organization. Along with that, the
paper conducts an external analysis of the organization through the Porter’s five forces and the
PESTLE analysis. In addition to that, a SWOT analysis is conducted for the evaluation of the
internal condition of the organization. The paper also conducts a VRIO analysis of the
organization in addition to the evaluation of the sustainable competitive advantages of the
organization. On the other hand, the paper also produces a brief description of the key issues
faced by the organization. Apart from this, the paper also includes the reevaluation of the
mission statement of the organization, strategies and the cases of fallouts as well for the chosen
organization.

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Table of Contents
Overview of the organization..................................................................................................3
Mission statement....................................................................................................................3
Mission....................................................................................................................................3
Internal and external analysis..................................................................................................4
PESTEL analysis.....................................................................................................................4
Porter’s Five Force Analysis.................................................................................................11
SWOT Analysis.....................................................................................................................12
Case Overview (Scenario and the issues)..............................................................................17
The VRIO analysis of the resources......................................................................................17
The SCA (sustainable competitive advantage)......................................................................18
Issues in the organization.......................................................................................................20
Re-evaluation of the mission statement.................................................................................20
Strategies................................................................................................................................21
Fallouts..................................................................................................................................23
Reference...............................................................................................................................25
Appendix................................................................................................................................28

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Overview of the organization
The Bega Cheese is an Australian company dealing in the dairy industry successfully in
the famous town of New South Wales named as the Bega. The company was founded as an
agricultural cooperative owned by the dairy suppliers of the country in the year 1899. As per the
reports of 2016, the company has revenues of $ 1,195,967, 000. In the year 2011, it became a
public company and became listed in Australian Securities Exchange (Begacheese.com, 2019).
The company has received the status of one of the biggest dairy companies in entire Australia.
The net valuation of the total assets of the company is Australian $775 million.
Mission statement
The mission statement of the Bega Cheese Ltd s to embrace challenges, driving the
change and building for the future.
Mission
The company aims to deliver quality to the lives of Australian people. The company has
collected the resource of more than hundred Bega Valley dairy farmers, and the company has
become able to produce and at the same time distribute high quality cheese products which add
value to the lives of the Australian people. For over a century, the company has been following
the mission, vision and objectives building on the pillars of people, heritage, community and
customers. In this way, it has achieved a position in the Australian dairy industry. There are
almost 4000 people connected with the company, and the leaders of the company are Aiden
Coleman (CEO) and Barry Irvin (Executive chairman). The leaders are also solely devoted to the
success of the company in every sphere and help to resolve the issues occurring within the

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organization. The Bega Cheese Pvt Ltd Company is engaged in the manufacturing, processing
and distributing of all kinds of dairy and food-related products mainly in all the parts of the
Australian continent. The company operates primarily in two segments such as the Tatura Milk
and Bega Cheese (Begacheese.com, 2019). The essential products of Bega Cheese are natural
cheese, powder, branded food products, processed cheese and many other varieties.
Internal and external analysis
The strategic audit of a particular business also involves the external and internal review
of it. In order to discern the strengths, weaknesses, opportunities threats, once it is necessary to
analyze the outer environment that the business is established and operates in. It is also a vital
part of business planning (Aburto-Oropeza et al., 2018). It helps to assess the primary areas of
the company and propose strategies to overcome the issues which come across the business
process. There are many tools to examine the factors such as the Pestle analysis, the Porter's five
force analysis and most importantly the SWOT analysis (Ansoff et al., 2019). These tools help to
give a proper picture of the situation. In the case of Bega Cheese, at first, the Pestle analysis and
the Porter's five force analysis is done for better analyzing the strengths, weaknesses,
opportunities and threats.
PESTEL analysis
The Bega Cheese PESTEL analysis helps understand the macro environment of the firm
through a strategic tool. The term PESTEL stands for the political, economic, social,
technological, environmental and legal aspects in the country of Australia that can leave an
impact on the operations of the company (Hitt & Duane Ireland, 2017). The industry is ever-
changing, and the modifications and alterations in the macro environment can also influence the
other major players in the food, beverage and tobacco industry. It has also been found that the

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macro climate impacts the Porter Five Forces and shapes the competitive scenario. They can also
leave an impact on the competitive advantage of the firm over the market rivals, the rates of
profitability and many other aspects. On the other hand, the pestle anslysis helps to get in-depth
details regarding the challenges the Bega Cheese Company might face.
Political- The political factors play a significant role in the business industry and help to
get an overview of the long term profitability factors in a particular country or market. Notably,
the Bega Cheese operates in the Food, beverage and tobacco industry in many nations. It has
increased the possibility of many political factors that affect the operations of the company.
Different countries have their unique political system and turbulences which can quickly impact
the business of Bega Cheese (Meyer, Neck & Meeks, 2017). In order to operate smoothly in
different political and systematic risks of the industry, the company must focus on few mar
factors in the market keeping in terms with the case study of Bega Cheese; it can be said that the
government, its systems and policies will be the main concerns for the company.

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Image 1- Production of dairy products
Source - (Morden, 2016)
 The political stability of the existing market needs to be focused on. The Bega Vegemite
is distributed in many countries, and there are different policies based on the states. The
company will face greater instability in the markets due to the recent populism rise.
 The local government is an essential player in the market. They play an integral role in
the market and the business regulations in every sector. The Bega Vegemite must monitor
the changes in the local government and the finance and accounting (Morden, 2016).
 The time scale and the resource allocation is also another factor which must be analyzed.
It can be said based on the data collected from the case study of Bega Vegemite, that the
resource allocation will be changed.
 The taxation policies are factors which the Bega Cheese Company was refrained from. It
benefitted from the low taxes throughout the western part of the hemisphere. This had
saved the expenses that the company had invested in the research and development.
However, the decision can change this profit levels.
 The case study suggests that the Bega Vegemite will have to address the international
regulations.
Economic- In general, the economic factors include the exchange rates, the inflation rates,
consumer disposable income, labor market conditions, economic performance, economic
stability of the countrymen, the taxation rates, the interest rate and others.
 The skills level of the employees in the market is an important factor. The Bega
Vegemite can support the development of the good skills among the employees in order

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to improve the services regarding the finance and accounting. It will also create the
global opportunities for the company.
 The exchange rates are also playing factors. When the Bega Cheese Company bring back
the Vegemite in home, the investment plans of the company can be impacted by the
volatile exchange rates.
 The availability of the infrastructure is another factor to be concerned about. The
government is focused towards developing investment on the business infrastructure for
improving the business. The Bega Vegemite can make good use of this in order to
penetrate the market.
 The economic performance of the Bega Vegemite might also impact the business. The
sector Bega operates in has shown growing economic performance due to the disposable
income, the huge investments and the government expenditure in the sector.
 The growing inequality in the society can impact on the consumer interests and their
spending behavior.
 The inflation rates are high in the market which can impact the consumers of the Bega
Vegemite.

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Image 2- Global milk production
Source - (Hitt & Duane Ireland, 2017)
Social- The way of doing business is different in different societies and cultures. The social
factors can help the companies like the Bega Cheese or Bega Vegemite to better understand
demands of the market it operates in. The social factors include the tradition, culture, attitude,
acceptance of the spirit, health and safety, gender roles leisure interests and the demographics.
 The inequality in the income levels has also created inequality on the power structure. It
can also create difference in the buying behavior.
 The social hierarchy and the norms is different in the home market and other markets as
depicted in the case study. The company can employ a team which can understand the
societal norms and behaviors in order to serve the customers in a better way.
 The demographics of the Bega Vegemite is preferable to the company.

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 The public opinions are often influenced by the media outlets. The social media and the
traditional media are growing significantly, and the Bega Vegemite can make good use of
this for the marketing purpose.
 The migration of the people from different parts of the world in the home country of
Bega Vegemite will help the company to find put international talents in order to manage
the operations in the country.
Image 3- Global cheese market
Source - (Morden, 2016)
Technological- The technological aspects are disrupting the industries. The most effective
technological factors are the access to the mobile phones, the innovation and the customer
services, the technology-driven change, the supply chain disruption, information technology,
product offering and many others.
 There might arise some technology transfer and licensing related issues for the Bega
Vegemite. In the present scenario, the companies are reluctant to license the
technologies, for the fear of creating the competitors.

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 The investment on the research and development on the micro and macro level is
enhancing. It will surely lead to disruption industrywide by the help of innovation in the
services and new product launches.
 The user experience is another factor that the Bega Vegemite will have to monitor. The
increasing speed and access of the internet services can completely change the user
experiences of the customers.
 The development of mobile technology has inevitably transformed the expectation of the
customers, especially in the finance and accounting sector. The Bega Vegemite will have
to address this and stay sustainable in the competitive market.
 The Bega Vegemite will also have to incorporate the technological advancements in its
supply chain model too for better outcomes. It will lead to higher profit sharing.
Environmental- Throughout the last decade, the environmental and sustainability factors have
become crucial for the business organizations. The government along with the pressure groups
are asking to adhere to the standards. Few of the environmental factor are increasing focus on the
sustainability, the safe waste disposal, the insurance policies, the limited carbon footprints, laws
related to pollution, safe disposal, safe water treatments and many others.
 The urban cities have given greater importance to the waste reduction and management.
The government might fast come up with strict regulations on the waste management that
can impact the Bega Vegemite.
 There might occur greater scrutiny of the adherence to the environmental standards. The
Bega Vegemite can become influenced in both the emerging and the developed markets.
 Nowadays, the customer is even highly aware of the environmental factors and will
expect Bega to adhere to the standards of the environmental and legal factors.

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 The Bega Vegemite can make good use of the popular renewable technology. They might
also receive the government subsidies regarding this.
Legal- The legal factors are the last but not the least important factor in the PESTEL analysis.
The management of the Bega Vegemite must consider some of the legal market before
penetrating the international markets. The factors are the data protection laws, the copyrights
laws, the justice delivery time, intellectual property rights, the discrimination laws and any
others.
 The environmental laws are the most essential to be followed by Bega Vegemite.
 The Bega Vegemite will have to consider the time taken for the specific cases while
doing business in the international market.
 The legal protection and the intellectual property rights are important, and the
company might face difficulty if there are no such laws.
 The health and safety norms are the most important for Bega as it deals in the food
industry.
 The data protection and the business laws are the most important that emerges as a
critical part of the privacy issues.
Porter’s Five Force Analysis
The porters five force is an effective tool for analyzing the competitive factors rigorously.
The model of Porter's five force is borrowed from the field of micro economics. After the case
study of the Bega Vegemite, the five forces of the industry can be analyzed in the following
manner.
Bargaining Bargaining Threats of New Threat of Rivalry in the