a2 milk company case study analysis

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• Published: 02 May 2005

The A2 milk case: a critical review

• A S Truswell 1  

European Journal of Clinical Nutrition volume  59 ,  pages 623–631 ( 2005 ) Cite this article

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This review outlines a hypothesis that A1 one of the common variants of β -casein, a major protein in cows milk could facilitate the immunological processes that lead to type I diabetes (DM-I). It was subsequently suggested that A1 β -casein may also be a risk factor for coronary heart disease (CHD), based on between-country correlations of CHD mortality with estimated national consumption of A1 β -casein in a selected number of developed countries. A company, A2 Corporation was set up in New Zealand in the late 1990s to test cows and market milk in several countries with only the A2 variant of β -casein, which appeared not to have the disadvantages of A1 β -casein.

The second part of this review is a critique of the A1/A2 hypothesis. For both DM-I and CHD, the between-country correlation method is shown to be unreliable and negated by recalculation with more countries and by prospective studies in individuals. The animal experiments with diabetes-prone rodents that supported the hypothesis about diabetes were not confirmed by larger, better standardised multicentre experiments. The single animal experiment supporting an A1 β -casein and CHD link was small, short, in an unsuitable animal model and had other design weaknesses.

The A1/A2 milk hypothesis was ingenious. If the scientific evidence had worked out it would have required huge adjustments in the world's dairy industries. This review concludes, however, that there is no convincing or even probable evidence that the A1 β -casein of cow milk has any adverse effect in humans.

This review has been independent of examination of evidence related to A1 and A2 milk by the Australian and New Zealand food standard and food safety authorities, which have not published the evidence they have examined and the analysis of it. They stated in 2003 that no relationship has been established between A1 or A2 milk and diabetes, CHD or other diseases.

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Truswell, A. The A2 milk case: a critical review. Eur J Clin Nutr 59 , 623–631 (2005). https://doi.org/10.1038/sj.ejcn.1602104

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Received : 19 November 2004

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Published : 02 May 2005

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DOI : https://doi.org/10.1038/sj.ejcn.1602104

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The a2 Milk Company

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The a2 Milk Company (a2MC) became the most valuable company listed on the New Zealand stock exchange in 2018 by capitalizing on a biochemical discovery related to the protein composition of cow's…

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The a2 Milk Company (a2MC) became the most valuable company listed on the New Zealand stock exchange in 2018 by capitalizing on a biochemical discovery related to the protein composition of cow's milk. Because many people find the A1 protein difficult to digest, and that protein may be related to other health problems (e.g., diabetes), a2MC sells dairy products containing the A2 protein only primarily in Australia and China. With sales of NZ$730 million in 2017 and a desire to grow, a2MC formed a strategic relationship with Fonterra, the world's sixth largest dairy company, in February 2018. But one month later, Nestle, the world's largest dairy company, confirmed that it had begun selling A2 infant formula in China, and people speculated that it would start selling A2 products in Australia and New Zealand later in the year. a2MC's retiring CEO Geoffrey Babidge and newly appointed CEO Janyne Hrdlicka must decide how to respond to Nestle's entry. Can this successful entrant become an incumbent with a sustainable competitive advantage?

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2) explore tactics for market entry (i.e., judo strategy) and barriers to response by incumbents

3) assess industry/market attractiveness using Porter's Five Forces or Van den Steen's Five Factors framework

4) analyze strategic evolution and scope expansion over an extended period in an entrepreneurial firm

Feb 3, 2019 (Revised: Sep 20, 2021)

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The A2 Milk Company Case Solution & Answer

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The A2 Milk Company Case Study Solution

Introduction:

Dr. Corran McLachlan established a2 Milk in 2000. The aimbehind establishing this firm was to deliver milk that contained only a2 protein, instead of other dairy companies’ products which contain a1 and a2 proteins. Dr. Corran McLachlan soon learned that several people feel discomfort after overwhelming normal products, as opposed to products that contain only a2 protein.

Australia’s leading a2 Milk Company’s product line, includes an infant formula, the widest selection and the most innovative canned powder before, during and after the pregnancy.a2 Milk Company primarily engages in product marketing, with its main markets being Australia, China, New Zealand and the United States of America (USA).

The company has 32% share of the Australian breast milk formula, and is the fastest growing manufacturer of the baby products in Australia, by value. In 2017, the company’s total revenue was $ 728 million, while its rival:BellamysOrganic’s revenue in the same year, was just $ 328 million. This huge margin of the company’s revenue against its rivals, provided it an opportunity of spending more money on R&D (almost 8.5 percent of turnover) and helping itself in acquiring better talent to meet the business’s needs.

The strategy:

• Creating a brand collection of dairy based nutrition products,grounded on the claim that they do not contain a1 protein.
• Investing in attractive markets where you think, you can strengthen your competitiveness.
• Deepening your knowledge and experience of a2 protein.

The company states that it wants to expand further in Asia. By 2020, the number of the population generating medium income, will increase dramatically, considering which, the company should also plan on cateringthe markets that are expected to have a large growth, such as India, where birth rate is higher, i.e. 2.3 and GDP and literacy rates are rising.

As competition intensifies in the milk industry; the company maintains its leadership in meeting theconsumers ‘needs. By continuously evaluating its internal and external business environment; it maintains its dominance and strong brand reputation. This analysis will help the company in determining its future strategy and growth direction. Software analysis analyzes the strengths and weaknesses of evaluating a company’s internal and external business environments, facilitating a strategic decision-making. Below, we have represented SWOT analysis of a2 Milk Company, for its sustainable management and understanding of its nonstop growth strategy…………………………..

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The a2 Milk Company

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Our Strategy

The a2 Milk Company has set clear goals for the business in four primary areas: People, Planet, Consumers and Shareholders, to ensure that in addition to achieving its commercial ambitions, it is also actively working to deliver its sustainability priorities and is executing in a way that further develops a trusted and transparent relationship with its shareholders.

How we create value

Our strategy

Medium term measures of success

Copyright © 2023 The a2 Milk Company Limited

The a2 Milk Company respectfully acknowledges the traditional owners of the land on which we live, work, and operate. We pay our respect to Elders past and present.  a2 Milk® is a trademark of The a2 Milk Company Limited

*A1 and A2 proteins refer to A1 and A2 beta-casein protein types

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The A2 Milk Company Harvard Case Solution & Analysis

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The A2 Milk Company Case Study Help

Technological

The Company is highly focused on the Research and Development of its new products.It uses latest technology to make such milk formula(powder), which helps itsconsumers, before, during and during the pregnancy.

A2 milk bean dust is manufactured bySynlait Company. The sustainable strategy of the company is to reduce 1 kg of milk’s solid production, in order to install electric boilers instead of coal-fired boilers, with 50% of total greenhouse gas emissions, and 20 percentof water / kilogram of milk products.

Legal factors are considered to be immenselyimportant foroperating a business in a country. In short, it depends on how long it takes to over-enforce the law. The corporate governance rules adopted by a2Milk are intended to oblige all of its employees to perform their duties and to protect the shareholders ‘interests. In short, all factors have a significant impact over a company’s success.

Option 1: Maintain the current business model and strategy.

• The patent expires.

Option 2: Target competitors in the general market.

• Loss of the premium price.

Option 3: Focus mainly on R&D and innovation.

• "a2 course"
• Resourceful destruction.

Recommendations:

The chart in Appendix 1, shows the performance of a2 Milk Company’s share price. The share prices are calculated by using the share price of  March 2011, i.e. 100 as a reference price, followed by the share price based on the calculation of the annual stock’s price performance.

Breast-milk substitutes account for more than half of a2’s total income. The infant based formula is mostly from China. Powdered milk is transported from Australia to China, through a so-called “gray channel”. The Gray Channel accounts for 45-50% of sales of a2’s infant based formulas in the Australian continent.

The recently signed free trade agreement between China and Australia, could eventually make the gray channel disappear. In my opinion, the contract will promote the sales of infant products in China. In fact, a2 Milk is able to gain the market share without imposing imports on the infant based milk formulas marketed in China.

In addition, a2 Milk hasalso planned on expanding its product portfolio in the UK, and it intends to sell its products primarily in the Chinese market;therefore, the best solution for the company is to reduce the current premium-based price and to have a better response when it enters the Nestlé dairy market...............................

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How The A2 Milk Company Limited can tackle the Threat of New Entrants?

• The A2 Milk Company Limited can develop brand loyalty by working on customer relationship management. It will raise psychological switching costs.
• It can develop long-term contractual relationships with distributors to widen access to the target market.
• The A2 Milk Company Limited can also an investment in research and development activities, get valuable customer data and introduce innovative products/services to set strong differentiation basis.

Threat of Substitute Products or services

The availability of substitute products or services makes the competitive environment challenging for The A2 Milk Company Limited and other existing players. High substitute threat shows that customers can use alternative products/services from other industries to meet their needs. Various factors determine the intensity of this threat for The A2 Milk Company Limited

The Threat of Substitute Products or services increases when;

• A cheaper substitute product/service is available from another industry
• The psychological switching costs of moving from industry to substitute products are low.
• Substitute product offers the same or even superior quality and performance as offered by The A2 Milk Company Limited’s product.

However, this threat is substantially low for The A2 Milk Company Limited when;

• The switching cost of using the substitute product is high (due to high psychological costs or higher economic costs)
• Customers cannot derive the same utility (in terms of quality and performance) from substitute product as they derive from the The A2 Milk Company Limited’s product.

How The A2 Milk Company Limited can tackle the Threat of Substitute Products or services?

• The A2 Milk Company Limited can reduce the Threat of Substitute Products or services by clearly emphasising how its offered product/service is better than the available substitutes.
• It should provide convincing reasons to the customers by offering a better experience and high value for money.
• It can raise switching costs by working on loyalty.
• Lastly, it can improve the quality, maximise value for money and set strong differentiation basis to discourage customers from using the substitute product.

Rivalry among existing firms

The Rivalry among existing firms shows the number of competitors that give tough competition to the The A2 Milk Company Limited High rivalry shows The A2 Milk Company Limited can face strong pressure from the rival firms, which can limit each other’s growth potential. Profitability in such industries is low as firms adopt aggressive targeting and pricing strategies against each other.

The Rivalry among existing firms will be low for The A2 Milk Company Limited if;

• There are only a limited number of players in the market
• The industry is growing at a fast rate
• There is a clear market leader
• The products are highly differentiated, and each market player targets different sub-segments
• The economic/psychological switching costs for consumers are high.
• The exit barriers are low, which means firms can easily leave the industry without incurring huge losses.

Similarly, there are some factors that increase the Rivalry among existing firms for The A2 Milk Company Limited For example, the company will face intense Rivalry among existing firms if market players are strategically diverse and target the same market. The rivalry will also be intense if customers are not loyal with existing brands and it is easier to attract others’ customers due to low switching costs. Competitors with equal size and offering undifferentiated products with slow industry growth tend to adopt aggressive strategies against each other. These all factors make the Rivalry among existing firms a major strategic concern for The A2 Milk Company Limited

How The A2 Milk Company Limited can tackle the Rivalry among existing firms?

The A2 Milk Company Limited should focus on the implicit needs and expectations of its customers to strengthen the differentiation basis. It should raise switching costs by developing long-term customer relationships. The organisation should also invest in research and development activities to identify new customer segments. In some cases, collaborating with competitors can be mutually beneficial. The organisation can look for this option as well.

Bargaining Power of Suppliers

Bargaining power of suppliers in the Porter 5 force model reflects the pressure exerted by suppliers on business organisations by adopting different tactics like reducing the product availability, reducing the quality or increasing the prices. When suppliers have strong bargaining power, it costs the buyers- (business organisations). Moreover, high supplier bargaining power can increase the competition in the industry and lower the profit and growth potential for The A2 Milk Company Limited Similarly, weak supplier power can make the industry more attractive due to high profitability and growth potential.

Bargaining power of suppliers will be high for The A2 Milk Company Limited if:

• Suppliers have concentrated into a specific region, and their concentration is higher than their buyers.
• This force is particularly strong when the cost to switch from one supplier to other is high for buyers (for example, due to contractual relationships).
• When suppliers are few and demand for their offered product is high, it strengthens the suppliers’ position against The A2 Milk Company Limited
• Suppliers’ forward integration weakens the The A2 Milk Company Limited’s position as they also become the competitors in that area.
• If The A2 Milk Company Limited is not well educated, does not have adequate market knowledge and lacks the price sensitivity, it automatically strengthens the suppliers' position against the organisation.
• Other factors that increase the suppliers’ bargaining power include-high product differentiation offered by suppliers, The A2 Milk Company Limited making only a small proportion of suppliers’ overall sales and unavailability of the substitute products.

Contrarily, the bargaining power of suppliers will be low for The A2 Milk Company Limited if:

• Suppliers are not concentrated
• Switching costs are low
• Product lacks differentiation
• Substitute products are available
• The A2 Milk Company Limited is highly price sensitive and has adequate market knowledge
• There is no threat of forward integration by suppliers.

How The A2 Milk Company Limited can tackle the Bargaining Power of Suppliers?

The A2 Milk Company Limited can strengthen its position against suppliers by decreasing the dependency on one or a few suppliers. It will increase its price sensitivity. Developing the long-term contractual relationships with suppliers from different regions not only lowers their bargaining power but also allows The A2 Milk Company Limited to improve its supply chain efficiency. Finally, The A2 Milk Company Limited can find the alternate ways of producing the product if product demand is high enough and the firm has required competencies and expertise. However, it requires detailed cost-benefit analysis to determine its feasibility. Product redesign and diversification of the product lines can also help the organisation reduce the suppliers’ power in the market.

Bargaining Power of Buyers

Bargaining power of buyers indicates the pressure that customers exert on the business organisations to get high quality products at affordable prices with excellent customer service. This force directly influences the The A2 Milk Company Limited’s ability to accomplish the business objectives. Strong bargaining power lowers profitability and makes the industry more competitive. Whereas, when buyer power is weak, it makes the industry less competitive and increase the profitability and growth opportunities for The A2 Milk Company Limited

There are some factors that increase the bargaining power of buyers:

• A more concentrated customer base increases their bargaining power against The A2 Milk Company Limited
• Buyer power will also be high if there are few in number whereas a number of sellers (business organisations) are too many.
• Low switching costs (economic and psychological) also increase the buyers’ bargaining power.
• In case of corporate customers, their ability to do backward integration strengthen their position in the market. Backward integration shows the buyers' ability to produce the products themselves instead of purchasing them from The A2 Milk Company Limited
• Consumers’ price sensitivity, high market knowledge and purchasing standardised products in large volumes also increase the buyers' bargaining power.

Some factors that decrease the bargaining power of buyers include lower customer concentration (means the customer base is geographically dispersed), customers’ inability to integrate backwards, low price sensitivity, lower market knowledge, high switching costs and purchasing customised products in small volumes.

How The A2 Milk Company Limited can tackle the Bargaining Power of Buyers?

The A2 Milk Company Limited can manage the bargaining power of buyers by increasing and diversifying their customer base. It can be done by introducing new products, targeting new market segments and adopting the product diversification strategies. Marketing and promotional strategies can also be helpful in this regard. Building loyalty by embedding innovation and offering excellent customer experience can raise the switching costs, which will ultimately reduce their bargaining power. The A2 Milk Company Limited can adopt these strategies to strengthen its competitive positioning in the market.

Porter 5 force model implications

The application of Porter five (5) forces model in real-world context allows organisations to .make wise strategic decisions. Impact and importance of each of the five forces is context dependent. By using Five Force analysis, The A2 Milk Company Limited can determine the industry attractiveness, make effective entry/exit decisions and assess the influence of these forces on their own business and competitors. Moreover, the dynamic analysis of this model can reveal important information. For example, The A2 Milk Company Limited can combine the Porter 5 force model with PESTEL framework to determine the industry’s potential future attractiveness. In some cases, companies do not have the required information to analyse five forces. In such a scenario, the analysis can be conducted with the help of assumptions. Mostly, consultants consider this model as a starting point, and other frameworks (like PESTEL and Value Chain) are used in conjunction for a better understanding of the external environment.

Argyres, N., & McGahan, A. M. (2002). An interview with Michael Porter. Academy of Management Perspectives, 16(2), 43-52.

Bartusková, T., & Kresta, A. (2015). Application of AHP method in external strategic analysis of the selected organisation. Procedia Economics and Finance, 30, 146-154.

Bose, R. (2008). Competitive intelligence process and tools for intelligence analysis. Industrial management & data systems, 108(4), 510-528.

E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45.

Grundy, T. (2006). Rethinking and reinventing Michael Porter's five forces model. Strategic Change, 15(5), 213-229.

Manteghi, N., & Zohrabi, A. (2011). A proposed comprehensive framework for formulating strategy: a Hybrid of balanced scorecard, SWOT analysis, Porter's generic strategies and Fuzzy quality function deployment. Procedia-Social and Behavioral Sciences, 15, 2068-2073.

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 78-93.

Utami, R. M., & Lantu, D. C. (2014). Development competitiveness model for small-medium enterprises among the creative industry in bandung. Procedia-Social and Behavioral Sciences, 115, 305-323.

Vining, A. R. (2011). Public agency external analysis using a modified “five forces” framework. International Public Management Journal, 14(1), 63-105.

Williams, B., & Figueiredo, J. (2014). Lessons from an innovation-leader and tools to learn them. Journal of Industrial Engineering and Management, 7(4), 932-960.

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The A2 Milk Company Case Study Analysis

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The A2 Milk Company Case Study Solution

The The A2 Milk Company Case Study Help describes the possibility of the environment destruction owing to the human activities, which in turn results in the indirect or direct harm to the people within an environment. The environment can be harmed due to the extensive use of resources, production waste, emissions, effluents etc. The factors impacting the environment also destroys the goodwill and reputation of the business as a whole in the market. The risk is Chevron management is fretted about includes; Risk of damage to the human health, natural surroundings, and the corporate profitability. Environment externalities and its influence on the general public items at every value chain phase The value chain from the extraction of raw material to the pumps Loss of track record and goodwill Cost of company disruption Being the valuable and leading energy organization, and strong market image in domestic and worldwide markets, the company needed to attend to and deal with the functional difficulties. There might be the negative and the unfavorable impact on the security and health of the staff member workforce, the resources used by business, natural surroundings in addition to the monetary efficiency and viability of the business because of the inadequate handling of the oil while in the production procedure. In addition to this, the working condition of the business would have extreme influence on the security and health of employees. The expedition of gas and oil is among the risky operation which more than likely require precaution to put in place. The leak or spillage of the gas or oil at any production phase would be dangerous for both the organization and animals and environment. In case of the long working hours of staff members, the health of the staff members would be adversely affected. For this factor, there should be a standardization of procedure so that the management of the company assure that the safety and health of worker is not at stake during the procedure o production. There is a qualitative and quantitative impacts of the The A2 Milk Company Case Study Solution on company. The fines and additional charges may be indicated by the nation's government and limit a few of the business operations and ban the company for damaging the environment.

Environment risk management

The executives or management of the business must not manage the environment risk as they have handled other risk including financial risk due to the fact that the management or executives of the business can determine the outcomes of handling the currency danger in quantitative terms by examining the cost advantage analysis. The objective of the management is the lower the expense sustained by company to support the management of other threat. It is considerably essential that the expense of managing the threat must be lower than the cost of risk itself. On the other hand, in case of the The A2 Milk Company Case Study Solution, the supreme objective of the business is to reduce the likelihood of occurrence of the possible risk. If the company is unable to leave the event of the threat, it might take measures for the purpose of lowering the adverse impact of such threats so that the cost pertaining to the effects of risk and the loses would be reduced to some extent. Typically, the impacts of the The A2 Milk Company Case Study Solution might not be determined in financial terms, so it would be tough for the company to compare the benefit earned and cost sustained in it. The expense required to manage the environment risk is based on the ethical considerations rather than state requirement or require by the policy of the business. This in turn, offers the sense of fact that it is one of the unneeded cost that is invest by the company, but it would bring desirable and positive benefits, thus enhance the bottom line of the company in indirect manner. It is tough to identify the environment cost due to the fact that it is embedded in the everyday operating cost.

Spending money on The A2 Milk Company Case Study Solution

Company capture risks

The environment and safety standards have been carried out by the Chevron Research and Innovation Center through developing the Company, (a choice making tool) in discussion with the executives tends to manage downstream as well as upstream operations. The Company offers support to the supervisors to prioritize the projects for the performing them and it also assists managers in undertaking the expense advantage analysis. Frequently, it is not real of the benefits that the expense required for handling the The A2 Milk Company Case Study Analysis projects can be evaluated in dollar values or monetary worths. ; in case the benefit comes as a low probability of the unfavorable or unfavorable events, it is not clear that by how much it would be lowered by the The A2 Milk Company costs. The extent of damage is decreased in other financial investment due to the fact that of the unfavorable event, however the qualification of the damage is challenging. Despite the problem in answering such inquiries, Company help handles in setting priorities for managing the The A2 Milk Company Case Study Solution. Essentially, the Business utilizes spreadsheet method. It tends to utilize different evaluations tables and inputs sheets for the purpose of converting inputs into the dollar worths. The managers are entitled to fill the input sheet for each threat reduction proposition with the info such as initial job capital cost, life of project or the length of time throughout which the benefits would be yielded by job and the occasion's description such as service disruptions, injuries and fire. The input probably compare customized and current scenarios. Considerably, the info is used by supervisors from the qualitative danger ranking metrics that tends to be included in the previous risk management procedure stage. Suddenly, The A2 Milk Company Case Study Help had effectively discovered Company effective tool for measuring the expense associated to the danger management proposals.

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Porter's 5 Forces of The A2 Milk Company Case Study Solution

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Porter's 5 Forces of The A2 Milk Company Case Solution

The porter five forces design would help in acquiring insights into the Porter's 5 Forces of The A2 Milk Company Case Analysis market and measure the probability of the success of the options, which has been thought about by the management of the company for the purpose of handling the emerging problems associated with the minimizing subscription rate of customers.

1. Intensity of rivalry

2. Threats of new entrants

There is a high cost of entrance in the media and entrainment market. The show business needs a big capital quantity as the companies which are taken part in supplying entertainment service have bigger start-up cost, which includes: Legal cost. Marketing expense. Distribution cost. Licensing cost. On the other hand, the existing home entertainment provider has actually been extensively working on their targeted sections with the specific expertise, which is why the risk of new entrants is low. Another important aspect is the intensity of competition within the essential market players in the industry, due to which the brand-new entrant think twice while entering into the market. The innovation and patterns in the media market are developing on constant basis, which is adapted by market competitors and Porter's Five Forces of The A2 Milk Company Case Analysis.

3. Threat of substitutes

The danger of substitutes in the market present moderate threat level in media and the entertainment industry. The customer may likewise engage in other leisure activities and source of details as compared to seeing media content and online streaming.

4. Bargaining power of buyer

The dynamics of media and entertainment industry enables the clients to have high bargaining power. The profits and sales created by company are based upon the customers placed in varied locations all around the world. The low expense of changing enables the clients to look for other media service suppliers and cancel their Porter's Five Forces of The A2 Milk Company Case Help subscription, for this reason increasing the company danger. Due to this, the business could not charge high rates for services from the customers, and it should keep the pricing strategy according to consumer need, with minimal increase in rate.

5. Bargaining power of suppliers

The bargaining power of provider is high force in the marketplace. This is since there are couple of number of providers who produce home entertainment and media based content. Given that Porter's Five Forces of The A2 Milk Company Case Solution has actually been competing against the traditional distributor of entertainment and media, it requires to show greater flexibility in contract as compared to the standard businesses. The products is innovation based, the dependency of the companies are increasing on constant basis. Goals and Objectives of the Business: In Illinois, United States of America, one of the best producer of sensor and competitive company is Case Option. The company is associated with manufacturing of broad product variety and development of activities, networks and processes for succeeding amongst the competitive environment of industry offering it a significant advantage over competitiveness. The company's objectives is primarily to be the manufacturer of sensor with high quality and highly personalized company surrounded by the premium market of sensor manufacturing in the United States of America. The aim of the organization is to bring reduction in the product prices by increasing the sales system for every single product. Secondly, the organizational management is involved in determination of potential products to offer their customer in both long term and short-term indicates. The organizational strength involves the establishment of competitive position within the manufacturing market of sensor in the United States of America on the basis of 5 pillars which includes client care, effectiveness in operation management, recognition of brand name, adjustable capabilities and technical development. The company is a leading one and carrying out as a leader in the sensor market of the United States for their customizable services and systems of sensor. Development in principles and item creating and provision of services to their consumers are one of the competitive strengths of the organization. The organization has employed cross-functional managers who are responsible for adjustment and understanding of the organization's strategy for competitiveness whereas, the organization's weak point includes the choice making in regard to the products' removal or retention only on the basis of financial elements. Therefore, the measurement of ROIC is not related to the trade incorporation and issues of customers.

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The a2 milk company limited porter five forces analysis, strategic management essays, term papers & presentations.

Porter Five (5) Forces Analysis is a strategic management tool to analyze industry and understand the underlying levers of profitability in an industry. The A2 Milk Company Limited managers can use Porter Five Forces to understand how the five competitive forces influence profitability and develop a strategy for enhancing The A2 Milk Company Limited competitive advantage and long term profitability in Food, Beverage & Tobacco industry.

Brief overview of The A2 Milk Company Limited

The A2 Milk Company Limited is one of the leading Australian firms in the Food, Beverage & Tobacco sector. Over the years The A2 Milk Company Limited has redefined the ways of doing business in Food, Beverage & Tobacco industry. The A2 Milk Company Limited is listed on the Australian Securities Exchange (ASX) and have the stock market ticker " A2M ". Order Now - Harvard Business (HBR) Case Study Solution Order Now - The A2 Milk Company Limited Porter 5 Forces Analysis & Industry Analysis

What are Porter Five (5) Forces

In his revolutionary article in Harvard Business Review (HBR) - "Five Forces that Shape Strategy", Michael Porter observed the five forces that have significant impact on a firm's profitability in the industry it operates in. The Porter Five (5) Forces are -

• Threat of New Entrants

Bargaining Power of Suppliers

Bargaining power of buyers.

• Threat from Substitute Products
• Rivalry among the existing players.

Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition. Porter Five Forces focuses on - how The A2 Milk Company Limited can build a sustainable competitive advantage in Food, Beverage & Tobacco industry. Managers at The A2 Milk Company Limited can not only use Porter Five Forces to develop a strategic position with in Food, Beverage & Tobacco industry but also can explore profitable opportunities in whole Food, Beverage & Tobacco sector.

The A2 Milk Company Limited Porter Five (5) Forces Analysis for Food, Beverage & Tobacco Industry

Threats of new entrants.

New entrants in Food, Beverage & Tobacco brings innovation, new ways of doing things and put pressure on The A2 Milk Company Limited through lower pricing strategy, reducing  costs, and providing new value propositions to the customers. The A2 Milk Company Limited has to manage all these challenges and build effective barriers to safeguard its competitive edge.

How The A2 Milk Company Limited can tackle the Threats of New Entrants

• By innovating new products and services. New products not only brings new customers to the fold but also give old customer a reason to buy The A2 Milk Company Limited ‘s products.
• By building economies of scale so that it can lower the fixed cost per unit. 
• Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as The A2 Milk Company Limited keep defining the standards regularly. It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry.

All most all the companies in the Food, Beverage & Tobacco industry buy their raw material from numerous suppliers. Suppliers in dominant position can decrease the margins The A2 Milk Company Limited can earn in the market. Powerful suppliers in Food, Beverage & Tobacco sector use their negotiating power to extract higher prices from the firms in Food, Beverage & Tobacco field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Food, Beverage & Tobacco.

How The A2 Milk Company Limited can tackle Bargaining Power of the Suppliers

• By building efficient supply chain with multiple suppliers.
• By experimenting with product designs using different materials so that if the prices go up of one raw material then company can shift to another.
• Developing dedicated suppliers whose business depends upon the firm. One of the lessons The A2 Milk Company Limited can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where these third party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.

Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This put pressure on The A2 Milk Company Limited profitability in the long run. The smaller and more powerful the customer base is of The A2 Milk Company Limited the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.

How The A2 Milk Company Limited can tackle the Bargaining Power of Buyers

• By building a large base of customers. This will be helpful in two ways. It will reduce the bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its sales and production process.
• By rapidly innovating new products. Customers often seek discounts and offerings on established products so if The A2 Milk Company Limited keep on coming up with new products then it can limit the bargaining power of buyers.
• New products will also reduce the defection of existing customers of The A2 Milk Company Limited to its competitors.

Threats of Substitute Products or Services

When a new product or service meets a similar customer needs in different ways, industry profitability suffers. For example services like Dropbox and Google Drive are substitute to storage hardware drives. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.

How The A2 Milk Company Limited can tackle the Treat of Substitute Products / Services

• By being service oriented rather than just product oriented.
• By understanding the core need of the customer rather than what the customer is buying.
• By increasing the switching cost for the customers.

Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. The A2 Milk Company Limited operates in a very competitive Food, Beverage & Tobacco industry. This competition does take toll on the overall long term profitability of the organization.

How The A2 Milk Company Limited can tackle Intense Rivalry among the Existing Competitors in Food, Beverage & Tobacco industry

• By building a sustainable differentiation
• By building scale so that it can compete better
• Collaborating with competitors to increase the market size rather than just competing for small market.

Implications of Porter Five Forces on The A2 Milk Company Limited

By analyzing all the five competitive forces The A2 Milk Company Limited strategists can gain a complete picture of what impacts the profitability of the organization in Food, Beverage & Tobacco industry. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity. By understanding the Porter Five Forces in great detail The A2 Milk Company Limited 's managers can shape those forces in their favor.

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The A2 Milk Company Case Study Solution Analysis

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The A2 Milk Company Case Study Solution & Analysis. Get The A2 Milk Company Case Study Analysis & Solution. Contact us directly at buycasesolutions(at)gmail(dot)com if you want to order for The A2 Milk Company Case Solution, Case Analysis, Case Study... More

The A2 Milk Company Case Study Solution & Analysis. Get The A2 Milk Company Case Study Analysis & Solution. Contact us directly at buycasesolutions(at)gmail(dot)com if you want to order for The A2 Milk Company Case Solution, Case Analysis, Case Study Solution. Benjamin C. Esty, Daniel Fisher Less

Email us for Any Case Solution at: [email protected] The a2 Milk Company Case Study Solution & Analysis The a2 Milk Company Case Study Solution & Analysis. Our tutors are available 24/7 to assist in your academic stuff, Our Professional writers are ready to serve you in services you need. Every Case Study Solution & Analysis is prepared from scratch, top quality, plagiarism free. Authors: Benjamin C. Esty, Daniel Fisher Get Case Study Solution and Analysis of The a2 Milk Company in a FAIR PRICE!! Steps for Case Study Solution & Analysis: 1. Introduction of The a2 Milk Company Case Solution The The a2 Milk Company case study is a Harvard Business Review case study, which presents a simulated practical experience to the reader allowing them to learn about real life problems in the business world. The The a2 Milk Company case consisted of a central issue to the organization, which had to be identified, analysed and creative solutions had to be drawn to tackle the issue. This paper presents the solved The a2 Milk Company case analysis and case solution. The method through which the analysis is done is mentioned, followed by the relevant tools used in finding the solution. The case solution first identifies the central issue to the The a2 Milk Company case study, and the relevant stakeholders affected by this issue. This is known as the problem identification stage. After this, the relevant tools and models are used, which help in the case study analysis and case study solution. The tools used in identifying the solution consist of the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis. The solution consists of recommended strategies to overcome this central issue. It is a good idea to also propose alternative case study solutions, because if the main solution is not found feasible, then the alternative solutions could be implemented. Lastly, a good case study solution also includes an implementation plan for the recommendation strategies. This shows how through a step-by-step procedure as to how the central issue can be resolved. 2. Problem Identification of The a2 Milk Company Case Solution Harvard Business Review cases involve a central problem that is being faced by the organization and these problems affect a number of stakeholders. In the problem

Email us for Any Case Solution at: [email protected] identification stage, the problem faced by The a2 Milk Company is identified through reading of the case. This could be mentioned at the start of the reading, the middle or the end. At times in a case analysis, the problem may be clearly evident in the reading of the HBR case. At other times, finding the issue is the job of the person analysing the case. It is also important to understand what stakeholders are affected by the problem and how. The goals of the stakeholders and are the organization are also identified to ensure that the case study analysis are consistent with these. 3. Analysis of the The a2 Milk Company HBR Case Study The objective of the case should be focused on. This is doing the The a2 Milk Company Case Solution. This analysis can be proceeded in a step-by-step procedure to ensure that effective solutions are found. In the first step, a growth path of the company can be formulated that lays down its vision, mission and strategic aims. These can usually be developed using the company history is provided in the case. Company history is helpful in a Business Case study as it helps one understand what the scope of the solutions will be for the case study. The next step is of understanding the company; its people, their priorities and the overall culture. This can be done by using company history. It can also be done by looking at anecdotal instances of managers or employees that are usually included in an HBR case study description to give the reader a real feel of the situation. Lastly, a timeline of the issues and events in the case needs to be made. Arranging events in a timeline allows one to predict the next few events that are likely to take place. It also helps one in developing the case study solutions. The timeline also helps in understanding the continuous challenges that are being faced by the organisation. 4. SWOT analysis of The a2 Milk Company An important tool that helps in addressing the central issue of the case and coming up with The a2 Milk Company HBR case solution is the SWOT analysis. The SWOT analysis is a strategic management tool that lists down in the form of a matrix, an organisation's internal strengths and weaknesses, and external opportunities and threats. It helps in the strategic analysis of The a2 Milk Company Once this listing has been done, a clearer picture can be developed in regards to how strategies will be formed to address the main problem. For example, strengths will be used as an advantage in solving the issue. Therefore, the SWOT analysis is a helpful tool in coming up with the The a2 Milk Company Case Study answers. One does not need to remain restricted to using the traditional SWOT analysis, but the advanced TOWS matrix or weighted average SWOT analysis can also be used.

Email us for Any Case Solution at: [email protected] 5. Porter Five Forces Analysis for The a2 Milk Company Another helpful tool in finding the case solutions is of Porter's Five Forces analysis. This is also a strategic tool that is used to analyse the competitive environment of the industry in which The a2 Milk Company operates in. Analysis of the industry is important as businesses do not work in isolation in real life, but are affected by the business environment of the industry that they operate in. Harvard Business case studies represent real-life situations, and therefore, an analysis of the industry's competitive environment needs to be carried out to come up with more holistic case study solutions. In Porter's Five Forces analysis, the industry is analysed along 5 dimensions. • These are the threats that the industry faces due to new entrants. • It includes the threat of substitute products. • It includes the bargaining power of buyers in the industry. • It includes the bargaining power of suppliers in an industry. • Lastly, the overall rivalry or competition within the industry is analysed This tool helps one understand the relative powers of the major players in the industry and its overall competitive dynamics. Actionable and practical solutions can then be developed by keeping these factors into perspective. 6. PESTEL Analysis of The a2 Milk Company Another helpful tool that should be used in finding the case study solutions is the PESTEL analysis. This also looks at the external business environment of the organisation helps in finding case study Analysis to real-life business issues as in HBR cases. • The PESTEL analysis particularly looks at the macro environmental factors that affect the industry. These are the political, environmental, social, technological, environmental and legal (regulatory) factors affecting the industry. • Factors within each of these 6 should be listed down, and analysis should be made as to how these affect the organisation under question. 7. VRIO Analysis of The a2 Milk Company This is an analysis carried out to know about the internal strengths and capabilities of The a2 Milk Company . Under the VRIO analysis, the following steps are carried out: • The internal resources of The a2 Milk Company are listed down. • Each of these resources are assessed in terms of the value it brings to the organization. • Each resource is assessed in terms of how rare it is. A rare resource is one that is not commonly used by competitors. • Each resource is assessed whether it could be imitated by competition easily or not.

Email us for Any Case Solution at: [email protected] • Lastly, each resource is assessed in terms of whether the organization can use it to an advantage or not. • The analysis done on the 4 dimensions; Value, Rareness, Imitability, and Organization. If a resource is high on all of these 4, then it brings long-term competitive advantage. If a resource is high on Value, Rareness, and Imitability, then it brings an unused competitive advantage. If a resource is high on Value and Rareness, then it only brings temporary competitive advantage. If a resource is only valuable, then it’s a competitive parity. If it’s none, then it can be regarded as a competitive disadvantage. 8. Value Chain Analysis of The a2 Milk Company The Value chain analysis of The a2 Milk Company helps in identifying the activities of an organization, and how these add value in terms of cost reduction and differentiation. This tool is used in the case study analysis as follows: • The firm’s primary and support activities are listed down. • Identifying the importance of these activities in the cost of the product and the differentiation they produce. • Lastly, differentiation or cost reduction strategies are to be used for each of these activities to increase the overall value provided by these activities. Recognizing value creating activities and enhancing the value that they create allow The a2 Milk Company to increase its competitive advantage. 9. BCG Matrix of The a2 Milk Company The BCG Matrix is an important tool in deciding whether an organization should invest or divest in its strategic business units. The matrix involves placing the strategic business units of a business in one of four categories; question marks, stars, dogs and cash cows. The placement in these categories depends on the relative market share of the organization and the market growth of these strategic business units. The steps to be followed in this analysis is as follows: • Identify the relative market share of each strategic business unit. • Identify the market growth of each strategic business unit. • Place these strategic business units in one of four categories. Question Marks are those strategic business units with high market share and low market growth rate. Stars are those strategic business units with high market share and high market growth rate. Cash Cows are those strategic business units with high market share and low market growth rate. Dogs are those strategic business units with low market share and low growth rate. • Relevant strategies should be implemented for each strategic business unit depending on its position in the matrix. The strategies identified from the The a2 Milk Company BCG matrix and included in the case pdf. These are either to further develop the product, penetrate the market, develop the market, diversification, investing or divesting. 10. Ansoff Matrix of The a2 Milk Company

Email us for Any Case Solution at: [email protected] Ansoff Matrix is an important strategic tool to come up with future strategies for The a2 Milk Company in the case solution. It helps decide whether an organization should pursue future expansion in new markets and products or should it focus on existing markets and products. • The organization can penetrate into existing markets with its existing products. This is known as market penetration strategy. • The organization can develop new products for the existing market. This is known as product development strategy. • The organization can enter new markets with its existing products. This is known as market development strategy. • The organization can enter into new markets with new products. This is known as a diversification strategy. The choice of strategy depends on the analysis of the previous tools used and the level of risk the organization is willing to take. 11. Marketing Mix of The a2 Milk Company The a2 Milk Company needs to bring out certain responses from the market that it targets. To do so, it will need to use the marketing mix, which serves as a tool in helping bring out responses from the market. The 4 elements of the marketing mix are Product, Price, Place and Promotions. The following steps are required to carry out a marketing mix analysis and include this in the case study analysis. • Analyse the company’s products and devise strategies to improve the product offering of the company. • Analyse the company’s price points and devise strategies that could be based on competition, value or cost. • Analyse the company’s promotion mix. This includes the advertisement, public relations, personal selling, sales promotion, and direct marketing. Strategies will be devised which makes use of a few or all of these elements. • Analyse the company’s distribution and reach. Strategies can be devised to improve the availability of the company’s products. 12. The a2 Milk Company Blue Ocean Strategy The strategies devised and included in the The a2 Milk Company case memo should have a blue ocean strategy. A blue ocean strategy is a strategy that involves firms seeking uncontested market spaces, which makes the competition of the company irrelevant. It involves coming up with new and unique products or ideas through innovation. This gives the organization a competitive advantage over other firms, unlike a red ocean strategy. 13. Competitors analysis of The a2 Milk Company The PESTEL analysis discussed previously looked at the macro environmental factors affecting business, but not the microenvironmental factors. One of the microenvironmental factors are competitors, which are addressed by a competitor

Email us for Any Case Solution at: [email protected] analysis. The Competitors analysis of The a2 Milk Company looks at the direct and indirect competitors within the industry that it operates in. • This involves a detailed analysis of their actions and how these would affect the future strategies of The a2 Milk Company . • It involves looking at the current market share of the company and its competitors. • It should compare the marketing mix elements of competitors, their supply chain, human resources, financial strength etc. • It also should look at the potential opportunities and threats that these competitors pose on the company. 14. Organisation of the Analysis into The a2 Milk Company Case Study Solution Once various tools have been used to analyse the case, the findings of this analysis need to be incorporated into practical and actionable solutions. These solutions will also be the The a2 Milk Company case answers. These are usually in the form of strategies that the organisation can adopt. The following step-by-step procedure can be used to organise the Harvard Business case solution and recommendations: • The first step of the solution is to come up with a corporate level strategy for the organisation. This part consists of solutions that address issues faced by the organisation on a strategic level. This could include suggestions, changes or recommendations to the company's vision, mission and its strategic objectives. It can include recommendations on how the organisation can work towards achieving these strategic objectives. Furthermore, it needs to be explained how the stated recommendations will help in solving the main issue mentioned in the case and where the company will stand in the future as a result of these. • The second step of the solution is to come up with a business level strategy. The HBR case studies may present issues faced by a part of the organisation. For example, the issues may be stated for marketing and the role of a marketing manager needs to be assumed. So, recommendations and suggestions need to address the strategy of the marketing department in this case. Therefore, the strategic objectives of this business unit (Marketing) will be laid down in the solutions and recommendations will be made as to how to achieve these objectives. Similar would be the case for any other business unit or department such as human resources, finance, IT etc. The important thing to note here is that the business level strategy needs to be aligned with the overall corporate strategy of the organisation. For example, if one suggests the organisation to focus on differentiation for competitive advantage as a corporate level strategy, then it can't be recommended for the The a2 Milk Company Case Study Solution that the business unit should focus on costs. • The third step is not compulsory but depends from case to case. In some HBR case studies, one may be required to analyse an issue at a department. This

Email us for Any Case Solution at: [email protected] issue may be analysed for a manager or employee as well. In these cases, recommendations need to be made for these people. The solution may state that objectives that these people need to achieve and how these objectives would be achieved. The case study analysis and solution, and The a2 Milk Company case answers should be written down in the The a2 Milk Company case memo, clearly identifying which part shows what. The The a2 Milk Company case should be in a professional format, presenting points clearly that are well understood by the reader. 15. Alternate solution to the The a2 Milk Company HBR case study It is important to have more than one solution to the case study. This is the alternate solution that would be implemented if the original proposed solution is found infeasible or impossible due to a change in circumstances. The alternate solution for The a2 Milk Company is presented in the same way as the original solution, where it consists of a corporate level strategy, business level strategy and other recommendations. 16. Implementation of The a2 Milk Company Case Solution The case study does not end at just providing recommendations to the issues at hand. One is also required to provide how these recommendations would be implemented. This is shown through a proper implementation framework. A detailed implementation framework helps in distinguishing between an average and an above average case study answer. A good implementation framework shows the proposed plan and how the organisations' resources would be used to achieve the objectives. It also lays down the changes needed to be made as well as the assumptions in the process. • A proper implementation framework shows that one has clearly understood the case study and the main issue within it. • It shows that one has been clarified with the HBR fundamentals on the topic. • It shows that the details provided in the case have been properly analysed. • It shows that one has developed an ability to prioritise recommendations and how these could be successfully implemented. • The implementation framework also helps by removing out any recommendations that are not practical or actionable as these could not be implemented. Therefore, the implementation framework ensures that the solution to the The a2 Milk Company Harvard case is complete and properly answered. 17. Recommendations and Action Plan for The a2 Milk Company case analysis

Email us for Any Case Solution at: [email protected] For The a2 Milk Company, based on the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis, the recommendations and action plan are as follows: • The a2 Milk Company should focus on making use of its strengths identified from the VRIO analysis to make the most of the opportunities identified from the PESTEL. • The a2 Milk Company should enhance the value creating activities within its value chain. • The a2 Milk Company should invest in its stars and cash cows, while getting rid of the dogs identified from the BCG Matrix analysis. • To achieve its overall corporate and business level objectives, it should make use of the marketing mix tools to obtain desired results from its target market.

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