Fruitco, a fruit juice processor, recently considered the businesss future after a period of turmoil. Fruitco came
Question:
Fruitco, a fruit juice processor, recently considered the business’s future after a period of turmoil. Fruitco came into being as a bulk producer of fruit juice, processed from fruit purchased in the Boland area in South Africa. Before Fruitco’s establishment, farmers had to discard 10–20 percent of their crops that were not suited for sale due to quality specifications (appearance or slight damage to the fruit). Fruitco initially sold all of its production to Fruit Brand, a downstream bottling company that added a few additives, bottled the fruit juice, and sold it to the retail market. Fruitco’s plant is close to many of the large farming cooperatives and also close to Fruit brand’s bottling facility.
Fruitco realized that their facility was underutilized for a large portion of the year and began to experiment with different approaches to utilize capacity. This included processing fruit with different seasonality, which now had to be purchased in different locations and included buying cheap, semi-processed fruit juice in bulk from China, which still required some processing. These actions caused a large oversupply (they now produced much more than the Fruit brand required) and new markets had to be explored. Fruitco was able to find some bottling clients between 100 and 200 kilometers away from their facility, but in the process also decided to start their small bottling operation and sell directly to the retail market.
About 2 percent of current sales is to the retail market, but the supply chain function is in turmoil. As the managing director of Fruitco, you are trying to understand why the supply chain operation has become such a headache.
Question 3.1
Analyze the current organizational strategy at Fruitco.
Question 3.2
Discuss the following supply chain strategy improvements at Fruitco:
- Functional vs innovative products
- The 4 R’s
- Dynamic value networks.
International Business
ISBN: 9781292274157
8th Edition
Authors: Simon Collinson, Rajneesh Narula, Alan M. Rugman