BUS7333: Strategic Management Analysis of Fonterra's Challenges

This case study analyzes Fonterra's financial losses, marking the first time since 2001 the company faced such a crisis. The analysis identifies challenges including poor leadership, a shift in company mindset towards competitive dairy markets, and external factors like competition and changing demographics. To address these issues, the company is advised to focus on key markets like India, increase protein content in products, consider low-income consumers, leverage technology, and prioritize content-based leadership. These strategic directions aim to restore profitability, maintain market share, and ensure the company's long-term success in the global dairy industry. The analysis emphasizes the importance of adapting to new competitive landscapes and leveraging technological advancements to improve product quality and market reach.

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Summary of the analysis
In this analysis, it revolves around on the
actual analysis of the Fonterra Company and
the losses that it has faced at different times
of inception.
This is a case study based analysis for a
period of the last one year. Since the financial
year 2001, research and analysis have it that
this company has never faced any losses or
any financial crisis

This, therefore, has forced the company’s management and
leadership to seek and identify the issues that consequently
contributed to the financial loss during that particular year.
 In respect to research analysis conducted, it was indicated
that most of the challenges arose from the time the company
objective was made to achieve in evolving the company’s
mindset from the commodity basis to a strong competition of
dairy industry within the markets that were emerging by then.

Challenges as per the research analysis
Poor leadership issues have greatly contributed
to very bad performance for some few months
(Fonterra.com, Management team, 2017)
Change of company’s mindset from the
commodity basis to a strong competition of the
dairy industry within the markets that were
emerging by then
The threat of stiff competition being posed by
new entrants entering the dairy products
market

Unwavering Forces are originating from
demographic, social-cultural, economic,
technological, political and ecological factors.
The bargaining power of customers due to
the new entrants in the market making
various company companies that are
producing dairy products to increase

Therefore, after the company noted that
something was wrong, they took the initiative
to work under a corrective measure.
This was meant to prevent further losses
within the coming financial years.

This was also geared by the fact that,
Fonterra being one of the large-scale dairy
companies in New Zealand; it played a major
role in the growth of the country economy.
The dairy industry is a major contributor
when it comes to that country’s economy

As noted, the Fonterra company vision is to
be the regular wellspring of dairy
nourishments for everyone, all over and
consistently.
It has as well had a system that aims at
spreading out in numerous numbers in global
perspective dairy products and do so in all
often manner

The company, therefore, with the help of
effective leadership guidance has come up
with some strategies in line with their
objectives, vision, mission, system, and values
to help solve the identified challenges and
issues that led to the onetime loss and
financial crisis experienced in 2001.

Strategic directions with supporting arguments for Fonterra Company
To cope with the above challenges and avoid
future losses that can be attributed to by the
above challenges, the following are some of
the advocated for a list of strategic actions
that Fonterra dairy company will employ:

To concentrate on India as one of the major
hot spots for exporting the dairy products.
This is so since India has proven to be one of
the loyal and large consistent markets for
New Zealand based Fonterra Dairy Company.

To seek a way of producing more protein
content dairy products. This is as a result of
the increasing global growth on the rate of
consumption on dairy products and more so
products that have a high content of proteins
in them. As per this strategy, Fonterra should
seek beyond its New Zealand milk pools.

By the company’s visions statement, of being
the regular wellspring of dairy nourishments for
everyone, all over and consistently, there is
needed to be considerate too on the low-income
earners.
They can do this by regularly inspecting mixed
drains powders which tend to be cheaper than
basic product entire powder.
 This will encourage all levels of social classes to
be their potential customers. (Fonterra.com,
2018)

Dropping the company’s estimates on milk price.
Making use of the advantage associated with
employment of better technological advancements
that are associated with the expected merge and
incorporation between overall Chinese dairy
industry with that of American and European
technology on various dairy projects. Analysis
indicates that this strategy is helpful since It will
improve the quality of milk being processed thus
achieving the targets and solving the current
challenges the company is experiencing.

Advancing to content based when it comes to
leadership and management and not concentrating
on cost issues. This is a way of withdrawing the
idea on the Fonterra union of retailers which has
only led to less great customers.
The Globalization will be an important strategy
which can make an impact on business. Fonterra is
a Global trader; our business sectors will keep on
moving as new rivalry creates at home and abroad,
especially in the Asian market. So the firm must be
prepared to respond.

conclusions
There is a need for the Fonterra Company to
prevent further losses.
There is a need to keep making more profits
and maintain its markets as well as gaining
more markets.
 The above mentioned strategic directions if
adhered to will lead to the success of the
company as per the analysis

References
Fonterra.com. (2017, Jan 9). Management
team. Retrieved Nov 6, 2018, from Fonterra:
https://www.fonterra.com/nz/en/about/ourmar
kets.html.
Fonterra.com. (2018, Feb 23). Our markets.
Retrieved November 6, 2018, from Fonterra:
https://www.fonterra.com/nz/en/about/ourmar
kets.html.