Strategic Management Report: Bellamy's Organic China Market Analysis

This report provides a comprehensive strategic management analysis of Bellamy's, an Australian organic food company, focusing on its expansion into the Chinese market. It begins with an executive summary and an introduction to Bellamy's, its product range, and its current generic strategy of product differentiation. The report then delves into Porter's value chain analysis, examining both primary and support activities. A key focus is on the new strategic initiative of product development tailored for the Chinese market. The report includes a detailed market analysis of China, highlighting the growth of the organic product sector and relevant demographic trends. It assesses the suitability of the strategic initiative through macro (PESTLE) and micro (Porter's Five Forces) analyses. The report outlines a strategy implementation plan, including proposed changes and implementation steps, followed by a discussion of measuring strategic initiatives using a balanced scorecard and strategy map. The report concludes with a summary of findings and recommendations for Bellamy's to succeed in the Chinese market.

Running Head: Strategic Management
Strategic Management

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Executive summary
The report is based on Bellamy's company, an organic company based in Australia. Bellamy’s is
specialized in selling the organic products for the babies and toddlers. The report is based on the
finding of the strategy that company should implement to establish the business in the Chinese
market. The strategy helps the company in achieving and maintaining the sustainable
competitive advantage in China. The paper covers the theoretical concepts and the analytical
tools such as PESTLE analysis, Porter’s 5 forces, Porter’s value chain, balanced scorecard and
the strategy map.
The paper includes a brief discussion and analysis of the Chinese market for the Organic
products. The company should implement product development as a new strategic initiative that
helps the company in establishing the business in China. To measure the suitability of the
strategic initiative for the China market, company utilize the analysis of the external
environmental factors. The external environment can take place in the form of the macro and
microanalyses. These analyses help in evaluating the factors that can affect the working of the
company. The Porter's 5 forces can help the Bellamy’s in understanding that the company should
continue implementing the strategy in the Chinese market. Further, the report consists of the
strategy that needs to be implemented and the implementation of the strategy conducted by the
company. At last, the report talks about the measuring the strategic initiatives that are measured
by the company with the help of the balanced scorecard and the strategy map.

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Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................4
Range of the products..................................................................................................................4
Current generic strategy of Bellamy’s.............................................................................................5
Porter’s value chain.....................................................................................................................5
Primary Activities....................................................................................................................6
Support Activities....................................................................................................................7
New strategy Initiatives...................................................................................................................9
Market analysis of China.................................................................................................................9
Organic products in China.........................................................................................................12
Growth in the China market......................................................................................................12
Product development in China.......................................................................................................13
Suitability of strategic initiative.....................................................................................................14
Macro analysis...........................................................................................................................14
Pestle analysis........................................................................................................................14
Microanalysis.............................................................................................................................18
Porter five forces analysis......................................................................................................18
Strategy implementation plan........................................................................................................20
Changes to implement the plan..................................................................................................20

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Implementation of the strategy..................................................................................................22
Measuring strategic initiatives.......................................................................................................23
Balanced scorecard....................................................................................................................24
Strategy Map..............................................................................................................................27
Conclusion.....................................................................................................................................29
References......................................................................................................................................30

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Introduction
Bellamy's is an organic company which is founded by a Tasmanian family in the year 2004. The
company provides a convenient nutritious choice to the children. The company offers a wide
range of the organic food and formula products for babies, toddlers and young children with
more than the 30 products in the range from birth to early childhood. Bellamy's natural was
obtained by Tasmanian Pure Foods Limited in 2007. It is an exclusive business whose mission is
to put resources into and develop the Tasmanian sustenance and agribusinesses. Tasmanian Pure
Food Limited was renamed to Bellamy's Australia Limited in June 2014 (Bellamy’s Organic,
2017).
The mantra of the company is mindful eating from the beginning. In simple words, the company
wants to bring the awareness of what we eat and teaching the children good eating habits from
the beginning. The company believes in continue to grow into healthy happy children and adults.
The report talks about the strategies that the company follows in expanding the business in the
Chinese market. The brief evaluations and analysis about the market of the china are discussed.
Range of the products
The company's range of products includes the infant formula, baby rice, toddler milk, cinnamon
breakfast, brown rice pasta, baby macaroni, and vegetable macaroni. The company manufactures
the product for the different categories of the people (Paull, 2017). The target of the company
consists of the new-borns (0-6 months), toddlers (1-3 years) and infants (6-12 months). In the
year 2014, the company expanded the range of the product, now the company started organic
milk drinks for the children of the age group of 3+ year’s age group. This shows the
differentiation of the products that the company is providing (Morgans, 2015).

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Current generic strategy of Bellamy’s
The Bellamy’s company follow the strategies to enhance the working and sales of the company.
Most of the Australian is now getting to know the benefits of the organic food for the children.
The generic business strategy that is used by the company is product differentiation; this is the
marketing strategy that is used by the company to distinguish the product from the similar
offerings in the particular market. The company follows the product differentiation to increase
the brand loyalty of the company by providing the different and high-quality products (Hoberg,
and Phillips, 2016). If in case the customer will get the cheaper product from the competitors
than also customer like to purchase the product with the Bellamy’s. The reason being customer
believes in the services provided by the company with the quality products.
Product differentiates change the customer perception for the single product. The product
differentiation doesn't mean that the company needs to bring the changes in the product but it
means that the company can bring the changes in the advertisement, promotion strategy or sales.
With the change in the packaging of the product, a company can attract the customers towards
the product. This is the strategy which is followed by the company in the Australian Market.
Porter’s value chain
The porter's value chain is used by the company to analyze the activities that an organization
performs. This helps the Bellamy Company in analyzing where the company activities are going
wrong and where the changes are required (Porter, and Heppelmann, 2015). These activities are
managed by the company for the evaluation of the performance of the company. The value chain
consists of the primary activities as well as the support activities.

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(Source: Miller, and Mork, 2013)
Primary Activities
Inbound logistics
The inbound logistics of the Bellamy’s include the selection of the raw material which is used by
the company to produce the organic products in the market. The raw material purchased by the
company going to be transported to the storage sites of the Bellamy's. After completing the
manufacturing of the organic products, the company sent the products for the packaging of the
product (Bharati, and Chaudhury, 2015). Once the packaging of the products finished then the
company send the product for the distribution at the different stores.
Operations
The main operations of the company take place in Australia itself. Though, the company exports
its product to the other countries and the company is also willing to expand the business in the
different places. In the year 2012, the company opened the new office in Shanghai and in the

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year 2014, the company opened the office in Singapore, the reason being the organic products
are high in demand in Asia (Christopher, 2016).
Outbound logistics
The company supplies its product range to the pharmacy chain, supermarket chains, and sells the
product directly to the customer, or provide the product online. The company maintains the
independent stores in Australia through which the company makes the products available to the
customers (Sandhu, 2015).
Marketing and sales
Bellamy’s invest in increasing the product range of the products and company invest in
enhancing the awareness about the organic products to the customers. This is possible with the
marketing and sales of the product. The company performs the marketing activities when the
company launches a new product in the market (Stadtler, 2015).
Service
The company believes in providing the certified organic products to the customers that help in
enhancing the customer experience and loyalty towards the company (Bornemann, and
Wiedenhofer, 2014). The certified organic product provides the peace of the mind to the
customers that they are feeding their child chemical free products. The company provides the
organic products online, so a company needs to provide the after sales and before sales services
to the customers.
Support Activities
Infrastructure

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The infrastructure consists of the departments like legal, finance, management, etc. which is
must for the company to manage the store's operations (Bharati, and Chaudhury, 2015). The
employees of the company try to generate more of the information about the organic products.
The stores situated in the Australia are well designed and pleasing stores.
Human resource management
The company’s employees are the one that helps the company in achieving the success and
growth. The company motivates the employees by providing them benefits related to the perks,
and incentives. The work culture of the company motivates the employees to perform the
activities and to retain in the business (Armstrong, and Taylor, 2014). The training programs are
conducted for the employees which helps the employees to deal with the customers of the
company.
Technology Development
The company Bellamy’s is using the technology to connect the customers. The technology helps
the company in enhancing the availability of the company. The company is using the technology
in the manufacturing process of the products (Montgomery, and Oladapo, 2014). The company
should work on the innovation to enhance the sales of the products in the Australian market. This
innovation helps the company in enhancing the network in the Australia.
Procurement
To manufacture the final product the company has to procure the raw material. The company
forms a good relationship with suppliers to keep the regular flow of the raw material (Chen,
2016). The company manufactures the products with no chemical pesticides, no chemical

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fertilizers, and no artificial additives. For maintaining the standard company needs to procure the
raw material.
New strategy Initiatives
The company uses new strategy in expanding the business in the China market. The strategy
initiative Bellamy's consider for the establishing business in China is product development. The
product development includes the new product with the different characteristics that offer new
and extra benefits to the customer (Reinertsen, and Bellinson, 2014). The company can bring the
modification in the existing product of the Bellamy’s through which the company will be able to
fulfil the demand of the customer and the Chinese market. Though, the different market consists
of a different requirement of the customers. Similarly, in the Chinese market, the demand of the
customers varies from the Australian customers. In China Company can bring the change in the
development of the product which helps the company in setting the market in China. The China
market shows the growth for the baby non-food product, so the company can implement this
strategy to enhance the baby food products.
Market analysis of China
Since 2012, the company is growing direct and the cross-border sales in the China markets with
the on-the-ground presence. The company is manufacturing the products considering the demand
of the China market. The baby food industry shows a rapid growth in the Chinese market. In
China, the growth of the whole baby industry reached 11% with the non-food categories growing
over 17%. In China, the removal of the one-child policy can provide the advantage to the
company. With the removal of the policy, the demand for the baby products will increase in the

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market. More than 70 per cent of the mother's formula feeds in the first 6 months. The culture of
the China says that they have the deep connection with the wellbeing and the health of the babies
(Li, and Huang, 2014). The country is consist of the biggest demographic for the online is
Women aged 25-35.
Data source: Nielsen Retail Index updated till Dec.15
The diagram shows the growth in the sales of the baby food and baby non-food in the China
market. The growth for the baby non-food is high as compared to the growth of the baby food.
The company found that the China market for the IMF is a unique market and it is the largest
IFM revenue pool across the world.

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Data Source: Nielsen Retail Measurement Service, updated to 1506
The infant milk formula (IMF) market grew in the china at 21%. The above image talks about
the sales of the different channel such as MT, MBS, and B2C. The images show that there is a
change of approximately 5% and 21%. There are 9 distinct retail networks servicing infant
formula customer’s product of the Bellamy’s. These networks help the companies in enhancing
the brand recognition of the company. It is required to make the customer aware of the
development that the company is bringing in their products (Ellickson, Houghton, and Timmins,
2013).
The company's route to market in China is enhanced with the strategic partnership with a focus
on providing the delight services to the customers. Company sales the product in the market in
different ways which include platforms and resellers, offline, flagship stores and many others.
The company is trying to build the capabilities to win the China market. The company is willing
to build the strong relationship and collaborations with the Chinese market in order to enhance
the business activities. Though, the market share of the company is declining from the past few