Bellamy's Strategic Management: Market Development and Expansion

This report provides a comprehensive analysis of Bellamy's strategic management, focusing on its adoption of a focused differentiation strategy within the organic food market. The report delves into Porter's Value Chain model to assess how Bellamy creates value through its primary and support ac...Read More

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STRATEGIC MANAGEMENT
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Executive Summary
This report discusses the generic business level strategy of Bellamy. The company focuses on
focused differentiation strategy which is analyzed. The Porter’s Value chain model of Bellamy is
analyzed. An analysis of the market development strategy of Bellamy in China is provided. The
mode of entry of Bellamy for China is export strategy which is discussed. The strategic
initiatives that can be adopted by Bellamy for market expansion in China can be discussed.

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Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
1-Generic Type of Business Strategy for Bellamy......................................................................3
Analysis of Porter’s Value Chain Activity Implemented of Bellamy.........................................5
2.New Strategic Initiative of Bellamy..........................................................................................6
Market Development- International Strategy..............................................................................6
Conclusion.......................................................................................................................................9
Reference lists................................................................................................................................11

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1. Bellamy focuses on focused differentiation strategy as its generic corporate strategy. The
value chain model of Bellamy helps us to analyze how the company creates value for its
consumers in Australia by collaborating among its primary activities and support activities
(Paliwoda and Thomas 2013).
Generic Type of Business Strategy for Bellamy
The organization Bellamy does not focus on cost leadership rather the leading organic
food manufacturer has adopted focused differentiation strategy and delivers products of high
quality to customers. The focused differentiation strategy adopted by Bellamy is as follows-
i) Bellamy applies specialized organic Formula STEP 1 for manufacturing food products
for infants. The company has special formula for infants who are less than 6 months old.
ii) The Company has also adopted focused differentiation strategy by manufacturing
organic food products for children who are six months to one year old by implementing
specialized Formula Step 2,so that essential nutrients, vitamins(Piercy 2014).
iii) The Company adopts focused differentiation strategy is for manufacturing products
for children who are 1 year to above 3 years old. The products of Bellamy is a combination of
specialized formula or milk of highest quality from cows and other 13 nutrients like fat, calcium,
iron and inulin.
Bellamy also manufactures foods that could be instantly served to children like snacks,
pasta and cereals.

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Analysis of Porter’s Value Chain Activity Implemented of Bellamy
The Value chain activity was proposed by Michael Porter in the year 1985. Bellamy
follows the primary activities in the value chain model like inbound logistics, operations,
outbound logistics, Marketing and Sales and service. These primary activities are supported by
procurement, technology, human resource management and firm infrastructure. Bellamy
implements the value chain activities in order to achieve competitive advantage by delivering
organic food products of more than 30 varieties to children. Bellamy focuses on Michael Porter’s
generic strategy of differentiation for broad market and focused differentiation for narrow market
(Armstrong et al 2014).
The primary activities of the Bellamy is supported by support activities like procurement
of ingredients for developing organic food products for children, technological and research and
development division of Bellamy constantly focuses on upgrading modern technology to
increase its product line and product width so that the products of Bellamy can be differentiated
from other organic food products of the market (Morschett, Schramm-Klein and Zentes 2015).
Support Activities
Firm Infrastructure-
From the product line of Bellamy it could be well understood that the leading organic
food manufacturer uses focused differentiation strategy by targeting a very niche market for
children and also by using special formula to manufacture organic products of highest quality.
The formula used to produce food products for children of different age brackets are also
differentiated like Formula Step 1, 2 and 3. Thus products of Bellamy are highly differentiated
from the food products that are available in the market. All food products of Bellamy abide by

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the rules and regulations of Australian Food Authority and by adopting the focused
differentiation business level strategy in Australian market as well as South East Asian market.
The Company gains competitive advantage as it is the pioneer in manufacturing of organic food
products for children since the Company was established in 2003 and possesses all the
technological know-how to be a market leader in Australian market. Thus after gripping a strong
foothold in Australian market the leading organic food manufacturer is planning for global
expansion. There is emphasis on production of products of high quality and the information
systems like data mining tools are used to understand preference of customers. (Ford and
Leonidou 2013).
Human Resource Management- Personnel training is superior and compensation
programs encourages productivity and creativity of workers in Bellamy.
Technology- From the highly differentiated products of Bellamy, it is well understood
that the Company invests in basic research to produce high quality products.
Procurement-The organic raw materials purchased by Bellamy is of highest quality.
The primary activities of value chain of Bellamy are as follows-
1) Inbound logistics - Bellamy uses modern technology to handle the raw materials so
that quality of final products improves and damage is reduced.
2) Bellamy manages its day to day operational activities and responses rapidly to
customer’s feedback and implements specifications from customers while manufacturing
attractive products for them.

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3) Outbound Logistics- The processing of order from customers are fast and delivery of
products to customers by Bellamy are always on time because customers can purchase products
from Coles, Woolworths and other retail chains.
4)The marketing and sales division of the company by building a strong brand image in
the mind of customers and positioning itself as a premium manufacturer of organic food products
for children and Bellamy maintains personal relationship with customers and buyers.
5) The service provided to customers by Bellamy is of highest quality.
2. New Strategic Initiative of Bellamy
The mode of entry in the Chinese market for Bellamy is export strategy and Bellamy
should have a strong logistics system to exports its products to China. The Company should have
a strong distribution system in China so that products of the Company are easily available to
consumers in China and the Company should focus on promoting and selling its products in
digital platform in China
One new strategic initiative for Bellamy could be to promote its products online using
modern marketing tools like digital marketing and data mining techniques. The company can
have an online platform of its own and a mobile app should be available to customers for easy
payment. Also, Bellamy can sell its food products in leading online platforms like Alibaba. Also,
since the Company is targeting children who are the consumers of the leading organic food
manufacturer but the customers of the organic food products are the parents of the children who
actually pay to buy products for children. Thus the company can extend its product line by
manufacturing organic food products for the mothers of children. After delivery of children,
women require essential vitamins and supplements to maintain the calcium requirement of their

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body. Bellamy can diversify its product portfolio by manufacturing products for the mother of
children and can often market the products together so that nutritional requirements of both
mother and children are satisfied by the products of Bellamy. The Company has already
established itself in Australia. Thus to gain a huge customer base in the global market and
improve its cost the Company should focus global market expansion. The leading organic food
manufacturer has already expanded in Asian countries and plans to set up its operation in China.
The generic strategy of the Bellamy is focused differentiation and the organic food manufacturer
Bellamy has a niche market base. Though the Company continuously invests in Research and
Development to upgrade its product line and tries to add more new products manufactured by
latest technology and innovation, still the organization should focus on diversifying its product
base by offering organic food products for mothers of the consumers. Before entering the
Chinese market the Company should focus on research about the Chinese market and should
benchmark its value proposition with the similar products offered by Chinese manufacturers. In
order to gain trust of Chinese consumers Bellamy should strike the emotional chord with
consumers in China, invest corporate social responsibilities in China and should create
employment opportunities in the country which will help the Company to be profitable in the
long run in China (Papadopoulos and Heslop 2014).
Market Development- International Strategy
i) Bellamy is planning to enter in the Chinese market and the mode of entry followed by the
Company would be export strategy
Bellamy can tie up with banks, financial institutions in China and develop its export
strategy by shipping its products in China. Bellamy can tie up with distributors in China and
should have a strong logistics system to distribute its exported products. The Company should

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ensure that the products are delivered to consumers on time. This will enable the Company to
create credibility in the minds of Chinese consumers and create a lot of employment opportunity
and create source for income for Chinese population. By developing its Supply Chain and
logistics management facility in China, the Company can make its products easily available to
the Chinese consumers. The stocks supplied to consumers in China will be fresh in nature and
will be delivered on time if the leading organic food manufacturer Bellamy sets up its
manufacturing facility in China (Hemmerling, Hamm and Spiller 2015).
It can be noted that there was a scandal about food products for Children in China which
led to the death of 6 children. Thus the consumers in Chinese market will trust a brand that has
market reputation. The strategic initiative that can be adopted by Bellamy in China is to increase
its brand value in China. The company should promote itself in China and gain trust of Chinese
customers. Since the Company is already a well- established brand in Australia, it will be easier
for the company to gain trust of Chinese consumers. While purchasing products for children,
parents already do a lot of market research in the buying process of consumer behavior. The
leading organic food manufacturer already has the scope to gain trust of Chinese consumers and
gain consumer perceived value by leveraging its brand reputation in Australia (Epstein, Buhovac
and Yuthas 2015).
It often gets difficult for a foreign brand to establish its market in another host country. It
might be difficult for Bellamy to establish its brand name in China. Thus the company should
invest heavily in promotional activities in China. Both Above the Line and Below The Line
promotional activities should be used. The brand should also connect to the consumers, that
means, parents of the children emotionally. Thus while advertising the brand should have the
emotional brand elements so that consumers in China especially the mother of children can

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immediately connect with the internal Values and emotions of the organic brand Bellamy(Lee
and Yun 2015)
The leading Organic food manufacturer Bellamy should focus on Corporate Social
Responsibility in China to gain the credibility of Chinese manufacturers. All products of Bellamy
should be manufactured aligned itself to the environmental issues of China. The Company
should focus on sustainability concerns and provide information to customers in their website
specially designed for China so that Chinese consumers can be aware how Bellamy focuses on
Top three bottom line of business like people, profit and planet (Grunert, Hiekeand Wills 2014).
Bellamy should invest in market research and competitor’s market in China. The
company should benchmark its products against that of competitors and also the pricing strategy
of Bellamy should be customized keeping in mind the market standards of organic food products
of China and the price of competitors should be analyzed in detail before setting up price of its
products in China which could be different from price of Products in Australia (Czinkota and
Ronkainen 2013).
Bellamy can offer market penetration strategy in the introduction stage of the Product
Life Cycle in Australia, so that the products of Bellamy can penetrate into the huge population of
the Chinese market and can later on adopt to marketing skimming pricing and bundle pricing.
Bellamy can also cater to the needs of mothers of children by manufacturing nutritious
organic products for them so that the nutritional requirements of the mothers are satiated and the
Company can offer bundle pricing strategy for products of mothers and children. Bellamy
should constantly add new products and extend the product line and width in China through

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constant research and innovation. Strategy for pruning of non-profitable products should be
adopted to maintain the product portfolio and to manage cost.
The more than a trillion e-commerce market should be leveraged by Bellamy and focus
should be to take advantage of digital platform in China apart from tie-ups with local
supermarkets and hypermarkets for gaining shelf-space. The Company should tie up with digital
platforms in China for selling its products and should connect with consumers via social
networking sites like Facebook, Twitter, Instagram, Pinterset and its own website for the China.
The social media platforms of Bellamy should convey the values of the Company and should
have all the information and manufacturing process of the organic products of Bellamy(Cairns et
al 2013). These sites should reflect the goodwill the Company wants to spread among Chinese
community. Bellamy should also have a separate digital marketing team to handle the activities
in digital platform. Payments should be made safe and secure on digital platforms and the
Company should also have logistics for delivery of products at the doorsteps of consumers. The
digital marketing team of Bellamy should handle customer complaints if any and should take
feedbacks from customers about their products

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Reference lists
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing.Pearson
Australia.
Cairns, G., Angus, K., Hastings, G. and Caraher, M., 2013. Systematic reviews of the evidence
on the nature, extent, and effects of food marketing to children. A retrospective
summary.Appetite, 62, pp.209-215.
Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.
Epstein, M.J., Buhovac, A.R. and Yuthas, K., 2015. Managing social, environmental and
financial performance simultaneously. Long-range planning, 48(1), pp.35-45.
Ford, D. and Leonidou, L.C., 2013. Research Developments in Interna-tional Marketing. New
Perspectives on International Market-ing, edited by SJ Paliwoda, pp.3-32.
Grunert, K.G., Hieke, S. and Wills, J., 2014. Sustainability labels on food products: Consumer
motivation, understanding, and use. Food Policy, 44, pp.177-189.
Hemmerling, S., Hamm, U. and Spiller, A., 2015. Consumption behaviour regarding organic
food from a marketing perspective—a literature review. Organic Agriculture, 5(4), pp.277-313.
Lee, H.J. and Yun, Z.S., 2015Consumers’ perceptions of organic food attributes and cognitive
and affective attitudes as determinants of their purchase intentions toward organic food. Food
quality and preference, 39, pp.259-267.

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Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international
management.Springer.
Paliwoda, S. and Thomas, M., 2013. International marketing.Routledge.
Papadopoulos, N. and Heslop, L.A., 2014. Product-country images: Impact and role in
international marketing. Routledge.
Piercy, N., 2014. Export Strategy: Markets and Competition (RLE Marketing). Routledge.