Answer to Question #263838 in Management for Mareeye

Question

You are a consultant to a small size Company engaged in Halal Food Products. The company is interested to expand its business to Europe and North America. Prepare a business report focusing on the business potential. Also, give advice on the entry mode and external risks if the decision is made to do business in the Europe and North America.  

 

PLO

CLO

Level

 

2

5

Answer 1

 Business Report 

 INTRODUCTION 

This report proposes to discuss the current marketing and operations strategies utilized by the Dangote Group of Ohayo - in order to deliver sustainable customer value to consumers . This sustainable customer value is delivered in an attempt to ensure the safety of market share, and increase the profitability and revenue of the existing organisation. 

This report will also investigate Dangote’s ability to introduce a new product into the current portfolio of products already being offered to the market of  Europe and North America. And how the current business practices, and marketing strategies will best suit the introduction of this new product, whilst still supporting the existing product range. 

 Objectives 

The overall objectives of this report are to: 

⮚ Conduct an evaluation of the existing market strategies being undertaken by Dangote ⮚ Investigate the impact and mechanisms for introducing a new product into the existing product portfolio, in order to appeal to both new and current consumers ⮚ Explain how the various marketing and operational strategies formulated by the organisation can work together to ensure a successful introduction, planning, implementation, and monitoring of the new product 

⮚ Establish the extent to which both the existing marketing and operational activities, and those proposed by the launch of the new product, will provide sustainable customer value in the long term

Marketing & Operations Strategy Business Report - Sample 

 ANALYSIS 

 The Current Situation 

 Company Background 

Established in May of 1981 as a cement manufacturer, the Dangote Group has expanded over the years to become one of the most diversified business conglomerates in America, and has established a brand reputation that is associated with high quality products and excellent business practices. The operational headquarters of the company are situated in Ohayo and the range of products now includes cement, food and beverages, real estate, telecommunications, steel, services, and a range of other products within other industries and markets. For the purpose of this report, the food and beverage section of the business will be assessed and discussed due to the nature of the new product being introduced to the market. In the 2010 business year, the company recorded a turnover of $ 89,980 and an operating profit of $ 16,148, and a profit after tax of $ 11,282. With a strong reputation and brand image already established among the consumers of America, and healthy overall profits across a plethora of brands and industries, the organisation is in a good position to launch a new product within its food and beverage range. 

SWOT Analysis for Dangote Group

STRENGTHS 

WEAKNESSES

⮚ Well established brand within the Nigerian markets 

⮚ Experience and success of a wide range of industries across the country ⮚ Shareholders are confident and well rewarded 

⮚ Already established within the food and beverage industry 

⮚ Most successful conglomerate in West Africa

⮚ Current economic downturn has had a negative effect of the profits and turnover of the organisation 

⮚ Previous political unrest has lead to high levels of crime and uncertainty 

⮚ Infrastructure within the country is not as efficient as it could be (although this is improving)

OPPORTUNITIES 

THREATS

⮚ Increasing population that is predominantly young or working age ⮚ Current brand strength means that new products can take advantage of the established nature of the company within specific industries 

⮚ Increasing employment opportunities will improve the corporate image of the company through increased social responsibility

⮚ Launching a new product during an economically difficult period carries a heavier risk than normal

 Analysis of SWOT and PEST 

The overall goal of the Dangote Group is “to touch the lives of people by providing their basic needs”. The introduction of maize meal as a cheaper alternative to pasta, rice, or potatoes will keep the company in sync with its mission through developing and improving current maize production across the country in order to better meet the nutritional needs of a growing population. Utilizing the well establish brand name within the food and beverage industry, the Dangote Group can launch their own maize product to the population and use existing production and packaging facilities to refine the maize and distribute it to supermarkets and wholesalers. The current economic climate affecting the country might actually work in favour of the product launch, as the cost effective nature of the product will offer a cheaper alternative to carbohydrates for consumers who are struggling to meet their nutritional demands within their current budget.

Current Marketing and Operational Strategy 

Due to the fact that the organisation has been in existence for a long time, and is an established brand across Nigeria, it is evident that the introduction of a new product will form part of a diversification strategy in order to broaden the product portfolio currently held by the company and improve its chances of growth and success. How forcefully the brand enters the new market will be dependent upon the financial resources made available to the initiative, and what the company can afford to spend on the process of diversifying into a new market (Keegan, 2001). According to Ansoff’s matrix (represented below), the introduction of a new product will involve a high level of risks (discussed further in the following section) and this will require careful marketing and operational strategies in order to keep costs manageable and minimize the risks to the company.

Strategy – How do we get there? 

Experiential marketing is a common form of promotions used all across rural African areas (Schmitt, 2000). It involved exhibitions and open days where companies travel to the consumers in order to provide samples, educate the masses on the benefits of the product and allows consumers to experience both the product, and the care and attention shown to them by the company launching the product. Fun games and demonstrations, as well as prizes and free gifts, draw huge crowds from a large geographical radius, and keeps consumers talking about both the product and the entire experience of the day for months to come. This type of marketing will improve the corporate social responsibility image of the organisation, whilst promoting the product and stimulating demand in the appropriate market segments. According to Aster (2009), research has indicated that the current production of maize in Nigeria can easily be doubled – which makes for a wealth of potential supply for the company. Contracting local farmers to grow maize, and assisting them both financially and in terms of fair trade, will also help to achieve the overall objectives set for the new product launch. 

 Action – Who is responsible for what and when? 

The procurement department will be responsible for researching appropriate farm land and owners to grow the maize within America and North Europe, and to educate farmers on how best to nurture and harvest a healthy maize crop. Marketing will need to ensure that appropriate and ongoing research is undertaken in order to make any necessary amendments to promotional campaigns as the product life cycle begins and progresses. Production and Manufacturing will need to manage the operations side of the business, and ensure that the correct level of capacity is made available and is efficiently utilized to ensure streamlined production levels that are capable of meeting demand. 

 Control – How do we keep track of progress? 

To ensure consistent monitoring and controlling of marketing activities and operational strategies, the company needs to regularly revisit the overall corporate objectives as well as those objectives set for the introduction of the new product. Consistent market research into consumer wants and needs, as well as the actions and strategies being adopted by competitive brands will help to keep the product targeting and positioning on the right track throughout the product’s life cycle. Sales figures and changes in market share proportions also need to be closely monitored in order to assess those marketing activities that are proving successful, and those which are having a negative effect on the overall product image and consumer demand. 

Operational Challenges and Plans to Overcome Them 

At present, the flour mill section of the Lagos factory is a streamlined facility, with well trained staff and effective operational procedures in place. There is also space within this section of the factory to add to the current machinery in order to add a maize mill that will use similar procedures and mechanisms to extract the corn and grind it into a fine maize powder. Current managers of the flour mill can be used to create quality circles in order to provide efficient guidelines for training new staff. Promotional opportunities into supervisory and managerial positions within the maize plant will also be made available to those employees who have proved to be a valuable asset to the flour production plant.

 Strategic integration of marketing and operations 

Marketing and promotions need to ensure that there is sufficient demand stimulated by the various campaigns in order to support the production levels being maintained by the operations department. Communication between the marketing and operations department is of paramount importance in order to ensure that the correct production capacity is made available in order to meet demand levels and avoid a production deficit – which can leave consumers wanting, and a production surplus – where stock is left unsold and requires storage or perishes over time. A Gantt Chart has also been formulated in order to ensure streamlined project implementation and efficient use of time 

 CONCLUSION 

The Dangote Group currently offers a wide range of products and services in various industries across Nigeria. Their range of food and beverage products includes flour, sugar, pastas and fruit juices. As an established company with a reputable image in various industries, the Dangote Group can look to expanding its current business through diversifying into a different market within the food and beverage industry, and utilize their current skills and expertise in this area to provide a cheaper product to lower LSM levels within the country. Offering sustainable value for customers and the community as a whole, the Dangote Group are committed to improving the lives of the population both through their products, and through the various corporate social responsibility initiatives undertaken within the community. Offering a maize meal product that is both nutritious and reasonably priced, and conducting experiential marketing in order to promote the new product and improve the lives and nutritional education of consumers within the lower LSM level areas.