MILK MANUFACTURING
BUSINESS PLANNING and STRATEGY
Most of you reading this will be aware of it but it perhaps this helps to re-inforce your focus
(This is not a comprehensive write up as it would need to be a book and you would probably not read it - it is merely a few bullet points)
The first step towards the future for the major dairy manufacturer is to recognise and take into account Global patterns and move with them before
they force the company to move through reducing margins and poor financial results
The Global dairy industry is in an established cycle of development
As education, infrastructure and wealth improves in a country it is natural that its agriculture and manufacturing base follows an established pattern.
The developed countries with well established education systems and higher incomes have higher costs.
It is a simple progression for the manufacture of commodity (esp food) products to establish in developing countries and replace the higher cost imports
The first phase in this cycle is the installation or re-installation of used plants closing down in developed countries (lower labour and other costs)
The second phase is partial automation and new plants (due to increasing wealth, labour and other costs)
The third phase is full automation and large plants - what is the next phase - do you know - are you in this phase - when should you change strategy?
Plants generally close as a result of being too high a cost base with increasing commoditization and global competition and this is mostly as a result of the rapidly growing pace of development in the developing world and it is recognising the need to change and when to review strategy that is critical.
Companies should be aware of their status in this global cycle and plan their move into the next phase at the appropriate time
The next phase of the cycle for the most developed countries may be increasing strategic allinces and Joint Ventures along with automation, innovation, branding, added value, niche, specialist and high technology products
The forces of globalization are rolling and no more reversible than the forces of technological change
Just as technology requires new management strategies, so does globalization.
More information can be provided on an individual company basis by arrangement - this is just a general very brief overview