Question: The case is about The Maple Leaf Foods (MLF) which created a vision to change and became a sustainable company by focusing on society and
The case is about The Maple Leaf Foods (MLF) which created a vision to change and became a sustainable company by focusing on society and the natural environment.
Required:
- Discuss the key internal and external factors that led to the need for organizational change at Maple Leaf Foods.
- Discuss the significance of organizational vision in guiding the change management efforts at Maple Leaf Foods.
- Discuss the challenges faced by Maple Leaf Foods when implementing organizational change.
- please answer in deep detail...
- here is few things i find related to the maple leaf case.or you can search case study online.
- Issue Identification Due to increasing competition, the primary issue faced by Maple Leaf Foods is their ability to increase and, even more importantly in the here and now, maintain market share along with solidly defining their brand image as a result of their proliferation of brands. Although their average selling price per kilogram was increasing, they were selling less as an aggregate. All of this comes on the heels of their major competitor being aggressive on pricing and the smaller players swallowing up more of the niche markets. MLF will have to find a way to boost their sales and brand image in the hot dog industry if they want to capture any loss that they have incurred and gain on their competitors. Other issues of concern are the lack of marketing research available to aid with strategic decisions and, to a lesser extent, low employee morale. Analysis Objectives and Goals MLFs strategic direction is shaped by 7 core principles (see exhibit 1 on page 164). Most notably, these value focus on market leadership, operation efficiencies, brand equity and being the lowest-cost producer. Kelly Gervin, the newly appointed senior marketing director of the packaged meats group in the consumer foods division, has discovered that the previous marketing director had a goal to become the lowest-cost producer and yet, was nowhere near achieving this. Tying some of these principles together, it becomes quite evident that MLF can become the market leader in some, if not all, market segments through a cost leadership strategy, as it is more sustainable in the long run if relatively stable, no-frills products of reasonable quality are involved which, in this situation, is the case. In addition, economies of scale come in to play and MLF, with their ability to produce large quantities of hot dogs, have the ability to obtain this. Given the volatility of their market position, this strategy must be considered carefully if MLF wants to increase their performance in the hot dog marketplace. Background/Theories While their current strategy is not explicitly stated, it can be inferred from their 7 core principles that utilizing a cost leadership strategy is their approach to rebuild their competitiveness. The issue here is that they are not successful at it, as they have raised prices on several brands in both 2000 and 2001. Consequently, sales declined noticeably and were swallowed up by their main competitor Schneider Foods (JMS). By using Porters Five Forces model, it becomes quite clear that the bargaining power of customers is high. Because there are no or minimal switching costs between rival brands, customers will inevitably buy the brand which is the least-expensive (as they are mainly price-sensitive), so long as it meets their requirements (beef, pork, poultry, etc.). In addition, the threat of potential substitutes is quite high, as a wide variety of picnic and barbeque fare include hamburgers, sandwiches, souvlaki on a bun and others permeate buyers choices. Despite the obviousness of these facts, MLF made pricing decisions which caused customers to turn away from their products and JMS pounced on the situation. In general, the Five Forces model indicates that the hot dog industry is fairly competitive and raising prices with no justification in the product while your main competitor is very aggressive on pricing is the business equivalent of suicide. Consistency also becomes more and more a focusing point for MLF, as their main competitor JMS has been rock-steady with regards to its physical products, brands, packaging, and employees. While MLF has tinkered with its brands and proliferated regional markets with them, resulting in market share loss, JMS has (for the most part) left their products unmolested, minimized the subbrands all the while retaining a national product line, resulting in market share growth. Looking at MLF and JMS through a resource-based view and performing a SWOT analysis on both reveals that their reputation is valuable, rare, and difficult to imitate, as it comes from being in the industry for over a century, selling their products nationwide, and the experience that comes with both. They are sustainable competitive advantages that should be the fundamental underpinnings of their marketplace positioning, yet JMS is the only one to have taken advantage of this. Related to this is the fact that MLF markets their products under different brands for different provinces while JMS has strong, national brands. While regional branding is fine so long as it has its reasons, no one can really explain why MLF has so many regional brands. Given this, MLF can address the issue of utilizing their brand equity by nationalizing their brands. Strategic Alternatives Get Out of the Hot Dog Industry One possible alternative would be for MLF to exit the hot dog industry and focus its efforts in other areas, such as bacon, ham, deli meats, etc... The risk on such a move is high, as hot dogs account for the largest portion of sales for MLF Consumer Foods. With hot dogs being more widelybought than other meat products and still having the second-largest market share of hot dogs, this does not seem to be a good approach for MLF. Streamline the Product Portfolio MLF can also get rid of all brands that are not very profitable (relatively speaking) and focus on the brands that generate the largest margins. Doing so would require the presence of national brands so as to leverage their brand equity. With such a strategy, MLF would be able to align their strategy with their vision, thereby creating and sustaining a core competence. This would be very easy to achieve, as nationalizing their brands would lower packaging as well as advertising costs. Streamlining their product portfolio would also help eliminate the cannibalization that MLF has experienced with their many brands, due to the fact that as many as 6 different MLF brands would compete for shelf space in any given outlet at the same time. The only issue here is that the advantages obtained by minimizing costs could possibly be less than the foregone sales of all their brands, as some customers may not be willing to switch from MLFs less profitable brands to their new national brands or may be alienated altogether from MLF. Focus on International Markets MLF also has the option of venturing into newer markets, such as the U.S. and Asia. Being larger consumers per capita of hot dogs while having a market 10 times the size of Canadas, the U.S. market has a bounty of potential. Entering such a market and obtaining even a sliver of the market share could represent vast profits, offsetting the advances of JMS in the Canadian marketplace. However, extensive market research needs to be conducted, as American consumers preferences need to be determined. An issue with this approach is that there may be, and probably are, different and even stricter government regulations regarding the sale of pork, beef and poultry. The Asian marketplace is similar in regard to legal and cultural issues. However, there has been a growing trend toward more Western products and with hot dogs being known as classic American fare, they would most definitely fit the bill. Focus on Mainstream Brands and Compete in Niche Markets Through Acquisitions Another strategy MLF can take is to focus solely on their brands that generate higher sales, such as the Hygrade and Top Dogs. They can then slowly take back market share by acquiring the smaller companies that focus on the niche markets. This would obviously allow MLF to eliminate its competitors and take their market share. It would also give MLF an opportunity to learn the core competencies of its former competitors and use them against JMS. With a strategy such as this, the benefits of acquiring such firms must outweigh the cost of their purchase price and little is known about MLFs or its competitors financial situation in the case. Recommendation The most effective option for MLF would be to streamline their product portfolio, and nationalize their brands, focusing on brands that are the most profitable. By conducting extensive market research, MLF can determine the most profitable brands (or after nationalizing brands, the most profitable hot dog products) to focus on, all the while determining which brands or segments to pursue in the future once profitability and growth in the current segments are maximized or waning. This may even lead into venturing into foreign markets, thereby combining the two strategies. Being one of the few, if not, the only company to not have national brands, it stands to reason that that may be one of the reasons for JMSs success and MLF has little to lose by promoting their brand equity in this fashion. It should be noted that, regardless of the recommended strategy, extensive marketing research must be conducted, as MLF is very unaware of its customers preferences and their perception of MLF brands. Essentially, MLF is flying blind and the only way that they can successfully execute any strategy is to know what their customers want and cater to them. Implementation Initially, MLF must conduct extensive market research in order to obtain information crucial to making the appropriate strategic decisions. If MLF does not feel it is up to the task, outsourcing this to firms specializing in marketing and market research is a viable option. Next, a decision as to what hot dog products are profitable has to made and, in turn, the process of canceling production, sales and advertising of less profitable brands need to commence. Employees should be notified of the changes in strategy and efforts must be made to get them to embrace the new direction the firm is taking. Then, the amalgamation of similar regional brands into national brands must occur along with an aggressive advertising campaign, with advertising done well before the nationalization so as to inform customers of the companys changes. After the notification advertising, MLF can begin to produce the new national brands in mass quantities and take back its rightful place of leader in the hot dog industry.
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