suedzucker case study sample essay

suedzucker case study sample essay

CASE STUDY QUESTIONS – SUEDZUKER

1. Identify Three Critical Success Factors Of The Company, Then Use Pestel Model To Discuss Which And How Would The Pestel Affect The Csfs Directly Or Indirectly.

Suedzuker group of companies is a leading global entity in not only the production of sugar but also crop energies fruits and particular food such as the production of nutrients essential in animal food and frozen pizza. Being a traditional player its branch is the single most supplier sugar to the European market, it employs over 17000 employees, and the group boasts of a turnover of approximately 6.5 billion euros yearly. With such a trend in the modern economy, it is interesting to evaluate what are the critical components associated with the company’s achievements (Dockalikova, 2014).  The company has thrived due to three main critical factors, namely technology, innovation (Adaptation to change) and compliance (To legal and international standards). Below is an analysis of the mentioned critical factors in relation to PESTEL model. suedzucker case study sample essay.

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Technological Environment

Upon further evaluation and study of the company’s history, it is quite clear that one of the factors contributing to its success is its ability to use technology providing smart and secure access for both its employees and potential customers. These are through the enrolment of SAP system to control all access and shopping for their items. Through this method can efficiently manage its staff and access day in returns by every staff member. With every employee issued with an electronic badge, the system facilitates and eases the human resources job in identifying which worker did not report to work. These are essential for the elimination of ghost workers in a large company where monitoring of every employee is nearest to impossible. The system also ensures that chemical storages can only be accessed by authorized personnel and are under protection and surveillance. Being very vital in daily production, sabotage of this material may cause losses. Some of the stuff may also be hazardous in raw form if exposed (ROMAN, 2015) suedzucker case study sample essay. These developments have not gone unnoticed. Due to their ability to reduce cost in maintenance and also facilitate achievement of standardized grade the company received an IFS certification version 5, which benefits firms who value food safety, quality and customer satisfaction.

Economic environment

Every companies dream is to grow sustainably and gradually every year. In Suedzuker, the management of this institution is well aware of the importance of having sound investment strategies to facilitate growth in the company. Situated at the heart of the European trading block its economic growth would come under attack due to the recent Brexit vote. These will force the company to renegotiate business deals with Britain. If a blockade persists and causes halting of business processes, it may affect them negatively (Békési, 2017) suedzucker case study sample essay. Competition may take this advantage and scoop their market which can be a blow to the company. However, having invested in long-term projects such as the internationalization strategies, completion will work to their advantage as well as shine a ray of hope.

Social Environment

Diversity plays a huge role here in the group. Having several sister companies in the fruit and food industry benefits the organization in acquiring a new market. With the recent upsurge in illnesses such as diabetes and other lifestyle diseases. Doctors are advising people to eat healthy which includes fresh fruits. Having successfully set up a fruit processing company, AGRANA in Austria, the organization is strategically aligned to thrive in this area. Having a relatively young staff also works to their advantage since they possess the relevant experience and contain energy critically required to drive the company forward suedzucker case study sample essay.

Political Environment

Compliance with various government regulations ensures the company is in good working relations and trade relations. These translate to the appropriate issuance of permits and government goodwill towards them. An example is when the Chairman agrees to have a sitting for a regular fraud review meeting with external auditors. The company’s financial statements and reports are also available online as part of the compliance. However, with recent events of refugees hosting in European countries and the security tension in a majority of European cities due to the threat of terrorist attacks, could derail the business point suedzucker case study sample essay. Here employees may be afraid to travel, transport and work in various cities. Therefore governments should strive to eliminate these impediments to ease trade (OBSTFELD, 2016). However, operating in the economic zone, the company possess experience in the political environment suedzucker case study sample essay. Due to their long experience with tragedies or change of governments in the past gives hope of outright survival.

Legal Factors

Free trade agreements such as the MERCOSUR and Australia, have mainly benefitted the organization in its operations in the European trading zones. It ensures that there are no trade barriers, tariffs facilitating smooth and low market entry levels. The world trade organization in it negotiations with developing nations could impact the company positively in that elimination of export restrictions could be slashed. These imply all the extra sugar required they can deliver without cuppings on export like before. suedzucker case study sample essay.

2. Identify The Company’s Competitiveness By Porters Five Model

The Porters Five Model is a tool that is used to analyse, as well as evaluate the industry specifics on operations and facilitating a firm with the relevant techniques to increase competitive advantage over its rivals (DIACONESCU, 2017). It accomplishes the above by dwelling on five issues.

Threat Of New Entrants 

These are mainly due to government policy in making it easy for new players to access the market. Brazilian sugar manufacturers under their umbrella body ABICAB are a rising powerhouse and possible entrants to the European market. These, therefore, reduce the profit for the incumbents. However, there is no limit to entry since the sugar produced in the European Union is lesser than the demanded quantity. The companies brand is a household name, hence ensuring consumers will obviously buy it due to ‘consumer loyalty’. The firm also has well-structured systems of distribution which will ensure that they are always one step ahead of an upcoming competitor. Their knowledge of the European market also work to their advantage playing a part in orders and pricing (Kim, 2015) suedzucker case study sample essay

Threat Of Substitute Commodities

These are products that can perform the same purpose as products of Suedzuker. For instance, in the sugar section, there is an emergence of sweeteners. These sweeteners are 300 times sweeter than sugar, and amazingly, they do not possess the adverse effects as sugar does in a human body. However, they cannot be used in various forms as sugar does and there is no efficient distribution to trigger a change in consumer buying patterns (García-Segovia, 2013). Interestingly, people are reluctant to leave sugar since it is readily available in large quantities and cheaper compared to its substitutes. suedzucker case study sample essay

Rivalry In The Industry

The competition is stiff in Europe due to several existing companies in various countries. For instance, the British Beet Sugar is a sole manufacturer in the United Kingdom. It is vital that Suedzuker keeps track of its game. It is essential that a sound competitive strategy should be put in place. What’s more, innovation such as rebranding and coming up with new products is another technique to improve its market presence, making it more sophisticated to attract customers. suedzucker case study sample essay. Furthermore, transparency is also another important aspect. Activities such as publication of crucial reports and financial statements brings this into the limelight as consumers tend to get confidence with such companies. Advertising both offline and online always ensure the company increases its brand awareness, keeps up with the competition, as well as reaching its prospective buyers (WICKER, 2017). suedzucker case study sample essay.

Suppliers Bargaining Power

It is important to note that Suedzuker strives as much as possible to avoid external suppliers. This is done through cultivation of large plantations such as Sudzuker Polska and Moldova that ensure the organization grows enough cane for its sugar production. Through one on one partnership and the establishment of special Plants Suedzuker acquires essential chemical components for example, Bio- Ethanol that aids the company in its manufacturing process. This ensures that there is a steady supply of raw materials, as and when needed. With the above, the company is always much more ahead of its competitors who have to incur the costs associated with buying, delivering and storage of the needed commodities. suedzucker case study sample essay.

Buyers Bargaining Power

This occurs where a customer leverages lower prices and improvement in commodity quality from the firm. This is mainly present where substitutes are readily available. However, at times, the company may be forced to establish customer loyalty programmes to reward royalty and consistent buyers, as well as attracting new ones. Since the sugar in the Europe region is not sufficient, it is impracticable for the buyers to hold Suedzuker ransom due to its diversity and distribution channels in a majority of the countries in the region. suedzucker case study sample essay.

3. SWOT Analysis

This framework rates internal and external factors that are favourable and unfavourable in equal measure, as an honest self- assessment of the business. It also indicates the upcoming trends and the position of the company to adequately fit in and compete (Haleem, 2017). Strengths, weaknesses, opportunities, and threats are the components that complete the framework. suedzucker case study sample essay.

Strengths

The Suedzuker distribution channels are the primary strengths evident. Having made use of them for many years the group conforms to them. High growth rate of the population only ensures future consumption is a guarantee for the firm. In an age where technological advancements are fast-growing, the company is already making adequate use of machines and SAP management systems. suedzucker case study sample essay. These, in turn, reduces the labour cost it incurs since machines can sometimes perform duties of hundreds of employees flawlessly without tiring (Almonawer, 2017). If appropriately used, the above can tackle the majority of the opportunities presented and propel the company forward.

Weaknesses

The company’s principal weakness is that its global presence is not as strong as that of other market leaders for example Associated British Foods and Tereos who are well established globally The firm establishes itself to the European market only and not so much into the different continents. Hence it is not stretched to full capacity. The emergence of uncertainty in the economy of Europe has led to significant decline in consumption of non- staples such as fruit yogurt. With the rise in lifestyle diseases, people are also ‘walking away’ from high-calorie diets which the company manufactures. Due to unfavourable weather conditions, traditional wheat growing countries and significant suppliers to the company are experiencing bad harvests. These may prove a weakness when they are unable to deliver products due to this occurrences (Sudzucker, 2016). suedzucker case study sample essay.

Opportunities

The most significant gap to exploit is the market. In the European zone that it operates on, there is constant and consistent market growth. These means there is always room to expand, produce more and sell more. Being a peaceful continent opens up the ability to traverse it and do business in every corner. There is also growing demand for products. With the emergence of bakeries and other companies who use sweeteners and animal feeds there is only but a way to improve business (Siciliano, 2016). Income levels continuously increase this provides an opportunity in that many people can afford commodities traditionally viewed as luxuries suedzucker case study sample essay.

Threats

For multinationals so significant, risks are many. Technology as earlier highlighted is a substantial boost in production and management in large institutions. However, is such a business experiences technological problems, losses incurred rise to the billions (WALLACE, 2016). If the technology fails and a loophole is not detected, huge losses through burglary are to occur. Globally there is a cry to cut carbon emissions to protect the planet from further distractions from the wrath of Mother Nature. Company’s such as Suedzucker are to regulate greenhouse emissions and direct dumping of waste on land. Failure to which sanctions are to get imposed on them which may affect their ease of doing business. Margins of profit have reduced due to the sudden increase in commodities critical in ethanol manufacture. These may lead suppliers to cut production of the chemical or worst case scenario shut down the plants. suedzucker case study sample essay.

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