Introduction
Achieving exemplary performance, profitability and proper re-organization of activities in institutions requires effective management and leadership skills. This is essential since effective management and leadership skills are integral elements that hold the capacity of driving or impeding business performance in various facets of operation.
This explains why institutions that are founded under visionary and performance ideals should adopt effective management techniques. This is vital in ensuring that the execution of various activities is in accordance with the best business practices to enhance profitability. They should integrate lean administration strategy to facilitate optimization of resources and enhancement of quality in the production chain.
This is critical for institutions such as Goya Food Corporation that seeks to gain competitive advantage especially in the current competitive world. Optimization of resources and reduction of wastes is paramount in facilitating production of items especially foodstuffs or services that conform to standards. This is a management concept that helps in ensuring adequate satisfaction of consumer’s needs.
Indeed, this report adopts Goya Food Company that focuses its potentials in storing and selling of food items to various calibers of consumers as the corporation under study. The company has grown from a small food outlet to a renowned supplier of foodstuffs to various destinations in the world. Its performance has been remarkable over the years due to its flexible operating policies and effective management.
However, the company is currently facing some challenges that may impede its expansion and growth plans. The challenges that range from logistical, policy and structural complications requires proper re-organization or re-strategizing. Therefore, its managers have an obligation to develop vibrant and viable operating policies to drive its performance.
The policies must be favorable and conventional in nature to motivate stakeholders to enhance their production capacity. They should also re-organize and develop viable working guidelines and effective service delivery procedures. This is vital in ensuring holistic adoption of new ways of coordinating activities, allocation of resources, control and organization of activities.
This will ensure that resource allocation is executed in a proper manner and assessment of the production process is done perfectly. It will also ensure that realistic, measurable, attainable and specific goals are set to aid the execution of the new projects.
The company’s brief overview, its core business and product portfolios
Goya Foods Company founded by Prudencio Unanue in 1936 is the largest family owned company in U.S offering quality food items. The company specializes in varying products such as grocery, dairy products together with frozen goods among others.
Apart from that, the company is responsible of maintaining many manufacturing and distribution facilities in different regions including Puerto Rico and Spain (Theodore, 2003, P. 31). The supply chain in America has 6 factories and 14 distribution centers, with more than 400 vendors. The supply chain manages to distribute 1, 600 Latin products that including rice, beans, frozen foods and beverages.
Interestingly, the company has a direct delivery store which ensures that customers within metropolitan regions receive orders that match their ethnic needs. This has been successful as evident by the positive remarks that customers are able to relay pertaining to the convenient nature with which they receive services.
Furthermore, the company has more than 1000 sales representatives with the aim of collecting orders from different stores and ensuring that they deliver them on time (Theodore, 2003, P. 32).
The goal of the company is to attain 98% service level provided at the shelf, without up surging the inventory. This is imperative because the company believes that through increasing its services, it will be in a better position of increasing the organizational sales. In addition to its shorter life products, the company introduced canned products to support in selling longer life products.
The two strategies have played a vital role in the aggressive growth of the company. Furthermore, the company aimed at increasing its total sales, thus prompting its reorganization and implementation of different strategies, which included a workable demand planning and fulfillment capabilities (Theodore, 2003, P. 32). Surprisingly, the company has been able to attain its major goals of 98% service level, without enhancing its inventory.
Additionally, it has acquired efficient buyers, who supported it in increasing the number of short-life items. The significant operating units of the company include Goya Foods of South Jersey, New York, Spain, Florida and Texas among others. However, the core competitors of the company include Ruiz Food Products Inc., GrupoJumex S.A and C $ F Foods Inc..
Factors that promote performance in the company
Prudencio Unanue founded Goya Foods Company in 1936 in Puerto Rico then moved it to New York, where he was playing a role of a food broker for products from Spain. Currently, Goya Foods is the biggest food company in U.S that provides Hispanic, African, British and carnelian food items (Theodore, 2003, P. 33).
The company has been able to increase its performance because of the following factors. Initially, it implemented a television campaign in English language, with the aim of increasing its market share through diverting the taste of Americans to their products.
For example, it came up with different advertisements with significant intentions of encouraging people to eat healthy. Additionally, the company ensures that it retains its customer base by encouraging sales representatives to wear suits and ties daily.
The company’s sales representatives also feed customer orders in the company’s data processing system. This is imperative because it facilitates automatic updates on information pertaining to consumer needs and preferences. This ensures accurate delivery of services and products to consumers who expect quality at all levels of operation.
Moreover, supermarkets also play a significant role in the virtuous performance of Goya Foods because they display the company’s products appropriately thus familiarizing them to many people (Theodore, 2003, P. 33). Remarkably, the fact that Goya is a direct store delivery company has enabled it to perform well.
This is because the company ensures that it delivers its products in metropolitan areas, while keeping in mind that the orders match with ethnic needs of clients. Furthermore, the company has more than 1000 sales representatives, who visit different stores to pick orders, thus delivering the needed orders in time.
The company has ensured good performance through communicating its expectations to employees and insisting on their personal accountability. This is essential because it has encouraged all Goya employees to understand their respective contribution to enhancing value addition and successfulness of the company.
In ensuring this, the company’s management ensures that it conducts regular staff meetings, to review their proceedings, and determine whether employees are meeting organizational goals. As well, the staff meetings act as follow-up to the pending projects, and this support implementation of effective solutions (Burrows, 2006, P. 111).
The company also monitors and evaluates job performance of employees after every 6 months, which plays a significant role in its good performance and profitability. This is a vital process in Goya Foods because it enables employees to identify areas that they need to improve, and decide whether training can enhance performance.
Employees at Goya Foods conduct self-evaluation with intentions of identifying achievements and the problems hindering them from attaining organizational goals. Apart from that, Goya Foods has a fair system that acknowledges merit. The company ensures this by noticing and appreciating the work of every employee through offering bonuses, excellence certificates, elevations and compliments among others.
Goya offers mentorship and coaching programs to employees so that they can realize the role-played by the organization in ensuring that the performance of the company improves. Notably, the company has quality management body, which ensures that its relationship with employees rely on trust, and it encompass employees in the decision making process within the organization (Burrows, 2006, P. 111).
The company also has quality employees, who believe in teamwork thus collaborating in attaining organizational goals. Finally, the company has been successful because of its continuous improvement and innovation styles that enable it to apply modern services, which increases its customer base.
The company’s SWOT analysis
SWOT is an acronym that refers to organizational internal Strength and Weaknesses together with the environmental opportunities and threats affecting it. SWOT analysis is a vital process in an organization because it supports managers in implementing a faster overview of different situations affecting them.
However, it is imperative for them to focus on maximizing their strengths and opportunities while minimizing weaknesses and threats, in order to increase their performance (Burrows, 2006, P. 113). Therefore, the following is a SWOT analysis for Goya Foods Company. Initially, the strength of the company is that it has a strong brand portfolio, which enables it to maintain its current customers while attracting new ones.
The company has diversified its business in different parts of America enabling it to increase on total sales. The diversification is also imperative because it supports it in sustaining competitive strength.
Furthermore, the company has valuable business brand, applies modern technology and draws much attention on customer satisfaction enabling it to emerge successful in the highly competitive environment. The company has a driven visionary management, positive perception towards the public and meets the consumer preference on top of being convenient (Burrows, 2006, P. 114).
Notably, the company has some weaknesses, which include the fact that it operates in manufacturing plants dealing with dairies, bakeries, beverages and meat plants thus increasing the risks of food contamination. This is disadvantageous to the company because contamination is likely to damage its brand and affect its total profits negatively. Conversely, the company has the following opportunities.
The different expansions that the company has been undertaking are beneficial since they offer dependable future opportunities. The company provides convenience foods to the American population, thus being in a better position of mimicking the success of America’s food industry. There is also an increase in demand for private labeled products, thus increasing the company’s sales.
The consumer demand is also growing; it is benchmarking other companies together with the opportunity of diversity and changing consumer preferences for ethnic foods.
The company also encounters some threats including the competition of price in the market, decreased demand for canned products, unfavorable regulations and a slowing economy dominated with high inflation likely to affect the price of foods. Finally, it is possible that consumers who are cost conscious are likely to shift their buying habits to less expensive foods.
The company’s administrative system and performance strategies
Indeed, Goya food Inc is a renowned corporation that has recorded tremendous growth since its inception due to its effective management. The food store has been administered under quality ideals and strategies that are performance oriented. The strategies have ensured proper policy formulation, allocation of resources and coordination of activities.
The strategies have also promoted teamwork, marketing, customer segmentation and identification of viable distribution channels (Smith, 2007, p. 59). These elements have enabled the company to satisfy the needs of its customers who range from Africans, British, Hispania’s and Caribbean’s effectively. They have also ensured timely delivery of services and products to consumers.
As noted, the company’s strengths that include teamwork, quality service delivery and proper planning has enabled it to cut a niche for itself in the competitive operating environment. In particular, teamwork has enabled the company to gain competitive advantage and record high standard of performance since the arrangement has promoted the establishment and adoption of innovative ideas of service delivery.
It has facilitated the integration of more conventional operating techniques that are set with strong performance orientation based on creativity. This has also helped in advancing the performance level of the company financially.
The company’s financial analysis and the factors that contributed to its financial stability
It is imperative to note that, Goya Food Company has been recording an upward trend in terms of financial performance over the years. This is evident in all its business portfolios that have always been able to record significant improvement in sales and returns on investment.
The business portfolios that focus in providing African food items, British, Caribbean and Hispania foodstuffs have been significant contributors to its sound financial capacity (Smith, 2007, p. 59). This is factual as recorded in the company’s financial statements and reports that show its yearly performance.
The reports justify the company’s steady growth since 1981 when it reported an immense increase in asset base and cash inflows. In the year, the company’s financial income stood at $150million up from $115millio in the previous year. This showed a remarkable growth of more than $35million that can only be achieved in corporations that operate under clear policies and performance guidelines.
This indicates that the company started to inculcate a culture of proper allocation and utilization of resources with an aim to maximize on proceeds or eliminate wastage in ancient days. As established, key product portfolios contributed significantly in the realization of the figure presented.
Firstly, British food portfolio that focuses in providing foodstuffs such as rice, beans, sauces and canned meals accounted for 20% of the total growth that was realized. Variably, African and Hispanic portfolios that focus in providing African red-palm oil, Malta, mango paste, canned vegetables, meat soup, meat stew and cheese accounted for 60% of the total income.
Caribbean portfolio that provides seasoning foodstuff such as spices, canned meat, cheese and herbs also accounted for 20% of the total income (Smith, 2007, p. 62). This statistical findings show how these portfolios and business units that have over 9300 clients including 1200 salesmen were instrumental in enhancing the company’s financial performance.
Since then the company has continued to report positive performance levels where in 1993, its income capacity rose to $400million with a strong employee base of 2500 individuals. In 1995, the company’s performance rose steadily to $500millio. This was evident due to its expanded business units, product portfolios and quality of its products that attracted more customers including repeat purchasing.
During the year, the company expanded its production chain and streamlined the distribution system as a performance strategy to boost sales of food items (Smith, 2007, p. 63).The strategy adopted translated into the growth where its business units also contributed significantly.
Consequently, the company recorded a performance index of $750million in the year 2003. The performance index included $31million in profit alone after necessary deductions were done. This trend has continued up to date as the company still reports positive growth financially and in physical asset.
Currently, the company is seeking to expand its production center to enable it meet the needs of its growing customers. This has seen the company embark on developing or construction a modern manufacturing facility that holds the capacity of storing and producing large quantities of food items.
It also seeks to expand its international presence by opening branches in various locations and nations to ease distribution of items. Variably, it seeks to build strong strategic alliances with credible institutions in diverse nations to expand its market share (Smith, 2007, p. 67).
These initiatives will enable the company to grow with speed and achieve the highest level of competitiveness that will guarantee the realization of its objective of becoming a market leader. The company’s good performance and financial capacity is also depicted in its financial ratios. The ratios that include current ratio, liquidity, acid test, earnings per share and asset turnover ratios report positive growth over the years.
The upward trend in terms of profitability that the company has been recording is attributable to various factors that range from administrative to logistical aspects. Firstly, the company has been operating under lean concept of administration. The administrative style that emphasizes on waste minimization and effective utilization of resources has enabled the company to achieve optimal gains.
This is apparent since the concept has been fostering value addition by ensuring that all the requisite processing procedures of food items are adhered to effectively. This has ensured production of quality items that matches consumer needs and expectations thereby improving sales. Secondly, the company has had a strong supply and distribution chain or network.
The competitive tool has enabled it to distribute its items to consumer’s real time and in a systematic manner that guarantees products availability. The company has also been able to record exemplary profit margins since it understands the purchasing patterns of its customers effectively.
This has been enabling sales department to plan and distribute products to areas where there is demand to reduce wastage of resources especially delivery cost. Fourthly, the company’s financial department has been able to plan, allocate and distribute resources to various departments appropriately.
Its managers have been using priority based cost allocation concept that is widely recognized as a credible financial management concept (Smith, 2007, p. 69).
It has been instrumental in promoting accountability in all business portfolios by ensuring that there are no cash wastages or misappropriations. This has been a key driver of the company’s performance since financial misappropriation has been impeding performance in most corporations (Smith, 2007, p. 69).
Its current performance levels and future expansion plans
Goya Foods Company has been performing well since it started. In 2010, the company’s revenue reached $810 million and 891 in 2011. However, the revenue of the company continues to increase because it has been introducing new products such as frozen bread pudding, Caribbean style rice mixes and salsas among others.
The company has also introduced other distribution facilities in different parts of the state including Webster, Massachusetts and New Jersey. Additionally, the company focuses on its expansion enabling it to transfer its Seville manufacturing facility to Gillette on a 550, 000 square foot plant.
Additionally, the company plans to set up new centers in Richmond, Virginia and Houston, Texas, which highly contributed to its successfulness. Notably, Goya Foods Company has been in a position to increase on its production and performance because of opening up dissimilar centers in varying regions within the state (Burrows, 2006, P. 112- 113).
Challenges that the company faces and how it can reorganize to counter their effects
Notably, the company’s performance is under threat due to the emerging environmental and structural complications. The complications require the company to re-organize its operating systems by adopting more conventional approaches of service delivery. This is essential in ensuring that it maintains its performance levels and customer satisfaction (Smith, 2007, p. 71).
Indeed, the company faces cracks in its inventory control process for its key product lines such as the supply of beans. This may cut the supply flow of its major products in the near future if proper mitigating measures are not undertaken. The company has also failed to respond with speed to align the production of Mexican food items with its initial product portfolios it introduced in 1977.
The company also faces substantive product management challenges that threaten to impede the introduction of its new line of production of soft drinks that it seeks to roll out. This is an issue since the initiative has elicited some resistance from key stakeholders who view the incorporation of the new product line as an improper diversionary venture.
These challenges may present severe implications to the company’s performance levels if they are not addressed professionally. Therefore, the company’s management must re-organize the institutions operating strategies and plans. In particular, the management should restructure the processing system and create more processing centers to facilitate smooth manufacturing of soft drinks.
They should also facilitate personnel training on issues and procedures that appertain to fruit production to enable them adjust amicably. This is essential in making staff members to be receptive to the idea and participate in its execution with at most diligence.
Conclusion
Indeed, Goya Foods Company has been performing well since it started its operations. It remains the largest family owned Hispanic Food Company in U.S, with six factories in America and fourteen distribution centers.
The company has more than 400 vendors and deals with more than 1,600 Latin products. It has been able to record high performance levels due to its exemplary management and leadership. It has also been able to attain its high profitability status due to proper utilization of resources and effective cost management.
List of References
Burrows, K. 2006, “A Growing Market; After Decades of Experience in the Industry, Goya Foods Says It Relies on the Expertise and the Dedication of Its Employees to Truly Understand the Needs of Its Customers,” US Business Review, vol. 4, no. 6, pp. 111-14.
Smith, F 2007, The Oxford companion to American Food and Drink, Oxford University Press, New York.
Theodore, S 2003, “Goya’s Authentic Approach; Hispanic Food Company Stays Relevant with Core Market While Enticing General Population,” Beverage Industry, vol. 1, no. 2, pp. 31-34.