Case Study - Hubbard Foods - Fake Company

COMPANY BACKGROUND

Hubbard Foods Ltd started up in mid-1988 and a private limited company. The company was originally named Winner Foods Ltd and only 4 employees at that moment, now currently has staff about 150.

In 1990, DickÐŽ¦s decision was made to introduce the Hubbard brand as the main brand for breakfast cereal products. The companyÐŽ¦s products set the price at both the high price range and low end of the cereal market.

HubbardÐŽ¦s has consistently built a culture around caring for others, creating employment and being socially responsible. In 2000, the company increased pay and allowances, and increased communication between management, the union and employees.

In 2000/2001, the company exported 14.4 per cent of its production mainly to Australia, but the small amount was exported to the United Kingdom, Singapore and Hong Kong and the turnover was $24.32 million, resulting the net profit before tax of $0.98 million. The market share was increased from 17.4% in 1998/1999 to 18.5% in 2000/2001. (Hanson, 2005)

VISION STATEMENT

The vision of Hubbard Foods Ltd is to provide sustenance for the mind, body and soul. The body means that a commitment to manufacture breakfast cereals and where appropriate, other food products that are innovation, nutritionally responsible and responsibly priced.

In addition, the company is concerned about social and people responsibilities, planet and environmental responsibility, and profits and financial responsibilities. Therefore, they pride themselves an innovation and embracing new technology and concept, and communication with their customer is huge importance to them.

INTERNAL STRENGTHS

Internal weaknesses

1.Lack of advertising

The company thinks that heavily advertising will cause the social pollution and it is not cost-saving measurement, and not matched with the companyÐŽ¦s policies.

2.DidnÐŽ¦t be the strategic follower

The company didnÐŽ¦t be the strategic follower may lost the position in the market because it didnÐŽ¦t follow the Uncle Tobys and KelloggÐŽ¦s to produce cereal bars.

3.Outdated workflow

The manufacturing process is still manually and some of the mixing still do by hands, so the company is weak in technology, the production line was not working so the machine have to be redesigned, otherwise it will waste a lot of time in production. This means there is no standard flow.

External opportunities

1.Capture in untapped market

The company has capture the untapped market, as a result of strong growth in 1993 and increasing the demand in the coming year.

External threats

2.Strong competitors

There are two main competitors: Uncle Tobys and KelloggÐŽ¦s.

3.Seasonal variation

The consumption in winter months is fewer than the summer months around 10%.

Change the product-style. The demand of muesli-style cereal is increasing because it is more convenient than the traditional cereal.

MAJOR DRIVING FORCE

Political Affairs

Export

In HubbardÐŽ¦s, they mainly exported the product to Australia, only small amount of product was exported to the United Kingdom, Singapore and Hong Kong. It exported 14.4% of our production where mainly to Australia, and small amount to U.K., Singapore and Hong Kong.

Due to the company size, it canÐŽ¦t expect the company can same as their competitors to export the product in a large proportion to the world-wide. ItÐŽ¦s the fact that the market share would be smaller than the competitors. However, it have a slightly increase in the export sales as percentage of the total sales if compare the figure. In addition, if they donÐŽ¦t have a well-designed production line, it canÐŽ¦t produce enough products to export out of New Zealand. It has a relationship between the production line and the export rate.

By the international strategies, due to the company is expanding; there is a chance to enter into larger market. Enter the new market through exporting, licensing, strategic alliances, acquisition and new wholly owned subsidiary. Using the exporting way and went into U.K., Singapore and Hong Kong, it can try to use the strategic alliances with the global supermarket first, because one of their competitors is the ÐŽ§no-frillЎЁ ÐŽV the local supermarket brand. In fact, it doesnÐŽ¦t have enough power to do the acquisition. Licensing is one of the good way also because it is both low in cost and risk, it only license out the production way is enough. However, the consideration is the returns are not high.

Actually, exporting rate is low; it have to see the internal strategic and external strategic position first if they analysis this problem. There has a major change in internal strategic position from no production line to a systematic production way, this would be the significant change. In an external way, the extension of the production would let to export product to the world-wide where is an untapped market. It should be a major change because it is only export to Australia, U.K., Singapore and Hong Kong only if it is not have a systematic production line. Now, which way should take if enter into a new market. Using exporting way; itÐŽ¦s a high cost and low control method because they need to spend a lot of marketing and distributing expense to form the channel for them to export, however, ÐŽ§no pain, no gainЎЁ. (Hanson, 2005)

A strategic alliance is a good way for the company because it allows sharing the risks and the resources with the alliance that mean does not have to bear all the risk of the exporting. In addition, the alliance can help it to develop the new competencies - maybe the new product or technology - to the future strategic competitiveness.

The company can try to find the local brand supermarket to become their alliances because they are well known in the competitive conditions, legal, social norms and culture, moreover, the buying habits. Most of the supermarkets would produce their brand name by the cheap price and similar product with the producer to attract the customer buys it. They would willing to join the alliance because they can have the technology but with