Background description on Smithfield Foods Company
Smithfield Foods Company produces and manufactures pork and pork products. It is the largest pork producing company in the world. The company was established in 1936 and the current headquarters are based in Virginia. Smithfield Field raises approximately 14 millions pigs annually.
The company processes about 27 million pigs are each year, to produce pork and beef products. Various brand names are used in the global markets to represent the pork and beef products. Smithfield has experienced various challenges in offering better products in the market.
The management has made efforts to improve the performance of the company, and to reduce the negative effects of its activities (Smithfield Foods website, 2011). The implementation of Customer Relationship Management will help improve the performance of the company, both internally and externally.
The challenges facing the company will be resolved by installing and implementing eth CRM system. However, the management should have strategies of ensuring that the system is successful because there will be various challenges to be experienced during the implementation process (Thomas, 2011).
The issues and challenges facing Smithfield Foods Company
According to Hirsch and Person (2009), Smithfield experiences many problems concerning its relationship with customers, employees, environment groups, and other stakeholders in the industry. The customers of the company have complained about exploitative process imposed to the products of the company. The company has been able to dominate the global market, and this makes it impose prices discriminatively (Pride & Ferrell, 2008).
Smithfield has been sued for its poor waste management practices. It was alleged that the company disposes untreated animal waste into waterways. This has affected the health standards of the workers and the neighboring communities. Cases of bad animal waste stenches have been reported by the people living around the company (Fainaru, 2009).
A fine of $12.6 was issued to the company in 1997 for violating Clean Water Act. Despite the efforts made by the company to operate in a clean environment, the company has been alleged to spread swine flu due to its poor waste management practices.
It was reported that the company failed to dispose dead animal bodies, and dogs would consume the carcasses. In addition, people living around the company were reported to complain about headaches. Therefore, the outbreak of H1N1 in 1999 was linked to the company (Squier, 2011).
The company has also been practicing poor animal handling. The pigs live in crates which are too small. In addition, transportation of the animals is done poorly such that some animals end up dying on the way. Animal abuse has been reported, and this has affected the demand for the products of the company.
The need to know the source of foods found in the market has increased, and this has created the need for customers to seek information about the process of manufacturing as well as production of food components.
As such, the treatment of animals has become important in determining good practices by manufacturers. This has affected the market for the products produced by Smithfield Foods Company because the company has been mishandling animals (Thomas, 2011).
In addition, most of the customers are concerned about the welfare of the employees’ working conditions. The company has been sued severally for its poor workplace conditions. The management of the company interferes with the operations of the labor union of the employees.
This makes it possible for the company to oppress its employees because it can easily manipulate the rules of the union. For example, in 1994 and 1997, the United Food and Commercial Workers Union (UFCW) sued the Smithfield Foods Company for manipulating elections of the union.
The National Labor Relations Board had issued injunction to the management of the company to stop interfering with the activities of the union. In 2006, the management of the company failed to provide finances for conducting fair elections at the union. Due to the unfair practices of the company employees have held several public demonstrations to protest the behavior of the company (Bacon, 2008).
The UFCW called for mass boycott of Smithfield’ products in 2007 and this affected consumer perception about the products of the company. The campaign affected the image of the company’s products in the domestic and global markets.
Even though an agreement to stop the boycott was reached between the UFCW and the company, the demand for the products from the company has been affected due to the poor working conditions of the company.
In addition, the image of the company has been tarnished, and the company may lose its global market share in the near future. Smithfield has encounter other disputes which have caused it incur a lot of fines. For example, in 2009 the company was penalized $900,000 for engaging in illegal merger (Pope & Treacy, 2011).
The benefit CRM will bring to Smithfield Foods Company
By adopting Customer Relationship Management (CRM) strategies, the company will interact with customers. This will help identify the problems that customers may have concerning the products offered by the company to the market.
The company will identify changes in consumer demand, and any aspect of the products that the customers may wish to be added. With the implementation of CRM, the customers will be able to convey information to the company.
This will help the employees to develop products according to the specific needs of the customers. Since the company has many customers, and operates in many countries, the introduction of CRM will help get in touch with all customers by establishing appropriate information collection system (Sunil, Krishnan & Fornell, 2005).
The CRM system will help the company identify complaints from customers and other stakeholders. By installing an electronic CRM, the management of the company will easily monitor the feedbacks provided by stakeholders.
Communication with relevant departments will also enhance the provision of appropriate remedies to the prevailing problems. The company requires using the information obtained from the customers to develop strategies of improving the welfare of its employees, animals and to maintain appropriate environmental standards (Eugene, Fornell & Mazvancheryl, 2004).
Developing custom-made products will be possible by applying the CRM strategy. The company will be able to identify the specific needs of the customers, and this will be incorporated in the product design, performance strategies as well as improving the environmental conditions.
Therefore, the company will achieve higher customer satisfaction, and this will lead to higher profits being made. Consumer loyalty will also be achieved when customers are satisfied (Hennig, 2000). Customers develop a repurchase behavior when they are satisfied by the products and services of a certain company.
The high levels of customer satisfaction will help improve the market position of the products of the company. As such, the company will achieve a higher competitive position in the domestic and global market. This will help improve the sales made by the company, and ultimately it will be able to dominate the global markets (Asim & Mela, 2003).
Developing appropriate marketing campaigns will be possible by the use of CRM. Smithfield has experienced boycott campaigns against its products in the past. By applying CRM, the company will be able to overcome challenges it encountered in the past where the image of its products was tarnished. The application of CRM will neutralize the negative campaigns provided by the UFCW (National Labor Relations Board, 2008).
According to Shimp (2010), conducting corporate social responsibility will be possible by applying CRM. The company has experienced moments of poor brand image in the global image, and there is need to develop strategies of promoting the image of the brands of the company by conducting corporate social responsibility activities.
These activities will help build a better product image among all consumers of the company’s products. Identifying the social needs of the communities where the company operates in will be possible by implementing the CRM strategy. The company can collect information from all stakeholders concerning projects which are essential for improving the status of the communities (Ruth, Kannan, & Bramlett, 2000).
By conducting CSR activities, the company will develop better relationship with the communities where it operates in, and thi9s will help improve the image of the company in the global markets. Meeting the social needs of the communities will help resolve some problems the company has been facing in the past.
For example, the challenge of environmental cleanliness can be dealt with more easily by mobilizing communities to help clean up the water ways. By installing appropriate facilities to protect the communities from being affected by the animal waste will also help improve the relationship with the neighboring communities.
This implies that the company will develop strategies of promoting better environment by collecting information from the neighboring communities by the use of CRM tools (Owyang, 2010).
The type of CRM system that is best suited for Smithfield Foods Company
The use of closed-loop CRM is the most applicable for Smithfield Foods Company. The closed-loop CRM helps customize marketing campaigns and measures their effectiveness. This helps improve the overall performance of an organization. Through the closed-loop CRM system, the company will measure how effective the organizational systems are.
It also predicts the customer behavior in the future. The available data is modeled to predict the behavior of consumers in future. The system also allows managers to act upon the observed behavior of customers. Since Smithfield Foods Company aims at improving the overall satisfaction of all stakeholders, using the closed-loop CRM system will be the most applicable because it will help identify the factors affecting all stakeholders (Kale, 2009).
The types of multi-channels venues the company should adopt in this CRM approach
The first channel is measuring the extent of CRM. This means that the company will measure the success of implementing the CRM by the use of profits, sales volume or any other organizational aspect. The measures should be easy to quantify so that the management can know the extent to which the company has achieved change after implementing the new strategies (Kale, 2009).
The other channel will involve acting to accomplish the CRM system is taking action. After identifying the appropriate CRM to be applied, the management must act on the strategies to ensure that they are impended. This will ensure that the entire process is complete. This channel ensures that the strategies are implemented according to the requirements of the customers and other stakeholders (Foss & Stone, 2002).
Predicting is the last channel in the implementation of the CRM channel. This will help determine the future requirements of the company. Prediction provides the management with the necessary strategies for improving the performance of employees to achieve the changing market conditions.
By applying the current market variables, the management can predict the market performance or the behavior of customers in the near future (Kale, 2009).
The areas of support the company needs for a successful implementation of CRM
The company will need support in financing the implementation of the system. Installing a workable CRM requires having enough capital resources. The funds can be sourced internally or from external sources. The company should be ready to pay all expenses associated with any method of providing funds to finance the process.
In addition, the company will require support in the areas of professional skills. There implementation of the CRM process requires the use of appropriate professions to ensure that the entire process is successful.
To achieve this, the management will be required to outsource people with skills to perform the activities of implementing the CRM process. Alternatively, The Company can train its employees to implement the CRM internally. This will reduce the costs; however, the internal employees may not have all the skills required in the implementation of the CRM process (Dyche, 2002).
The company should consider outsourcing its software
Smithfield Foods Company should use outsourced CRM system. This is a system whereby the company makes a contract with another company to supply with CRM system. This type of system is the most suitable because Smithfield Foods does not specialize in manufacturing and developing CRM system.
Outsourcing the system will improve on the quality of CRM system developed for the operation of the company’s activities. In addition, developing the CRM system might require special skills and professions, and these may be costly for the company. Outsourcing the system will also help save the time that would have been used to developed the system by the employees of the company (Kale, 2009).
Some of the hardware’s the company needs to consider
Smithfield Foods Company will need to install internet systems in almost all departments of the company. In addition, computers and computer peripherals will be required to capture the required data. The use of data capturing and analysis tools will help implement the strategy of the company.
With the use of internet system, the stakeholders of the company will be able t communicate with the management of the company. The company will be required to install data recovery system. This will help retrieve data in case the system is affected by viruses or any other malicious damage. Soft copy and hardcopy of the most valuable data should be kept as a security measure (Kale, 2009).
How the company will address the changes in organization
To address the changes in the organization, the management will be required to communicate with all the stakeholders to inform them about the expected changes. A discussion should be introduced to allow all stakeholders provide their opinions concerning the new system of management.
The employees should be prepared psychologically to allow them accept the new system of operation. This will help change their mindset so that they can easily adapt to the new system. This will help reduce conflicts as a result of rejection of the new system.
In addition, the skills of the employees will have to be aligned with the new system of operation. For instance, employees will have to be trained on how to use the communication system so that they can acquire better skills (Kale, 2009).
In addition, the employees will have to be trained on the technologies required to collect data from the customers and other stakeholders. Business partners with the company will have to be informed and involved in the transition process.
As such, the ideas of the business partners will be of great importance because they will enable the management to improve on its operational systems. Suppliers to the company will have to be communicated about the new demand and needs of the company.
Change in the products supplied will be essential because better materials will be required to improve the quality of pork manufactured. Communicating with suppliers will also improve the process of production. Materials required in the waste management process will be required (Kale, 2009).
Issues relating to implementation of a successful e-CRM
Successful implementation of CRM system will help reduce conflicts between Smithfield Foods Company and its customers. The company will be able too develop better strategies of improving customers’ satisfaction. Therefore, the level of customer loyalty will be high after implementing the CRM system.
The system will also improve the corporate social responsibility of the company. By the use of the CRM, the management of the company will develop better strategies of improving the welfare of the communities where it operates (Shin, 2005).
In addition, the company will have better strategies of dealing with waste emanating from the production and manufacturing process. The conflicts between the company and environmental activist groups will be eliminated because the company will easily communicate with the stakeholders to identify any necessary changes in the strategic management of the company.
Therefore, the CRM system will improve the status of all stakeholders of the company, and this will help improve the profits, competitiveness and market position in the domestic and global markets (Kale, 2009).
Management of CRM
To manage the CRM system of the company in the long-term, the management will be required to develop a Research and Development (R&D) team to carry out research about changes in consumer behavior. The team will monitor the system and any improvements will be done accordingly.
It is important for the R&D team to identify the best solutions to the challenges facing the company. The team should also predict the future expectations of consumer behavior. The management should work in collaboration with the R&D team to develop appropriate strategies.
In addition, the ideas from external and external stakeholders should be collected to ensure they are involved in the decision making process. The CRM system will have to be developed according to prevailing customer needs.
Since customers are the final users of the products of the company, their opinions should be highly valued. Therefore, the company should have a good relationship with its customers so that they can provide the necessary information about developing the CRM system (Kale, 2009).
List of References
Asim, A. & Mela, C. F. 2003, “E-Customization.” Journal of Marketing Research, 40 (2), 131–145.
Bacon, D., 2008, Illegal people: how globalization creates migration and criminalizes immigrants, Massachusetts: Beacon Press.
Dyche, J. 2002, The CRM handbook: a business guide to customer relationship management, New York: Addison-Wesley Professional.
Eugene W. A. Fornell, C. & Mazvancheryl, S. K. 2004, “Customer Satisfaction and Shareholder Value.” Journal of Marketing, 68 (3), 172–185.
Fainaru, S. 2009, “Mexicans Blame Industrial Hog Farms”, The Washington Post, May 10, 2009.
Foss, B, & Stone, M. 2002, CRM in financial services : a practical guide to making customer relationship management work, London: Kogan Page.
Hennig, T. 2000, Relationship marketing: gaining competitive advantage through customer satisfaction and customer retention: with 24 tables, Berlin: Springer.
Hirsch, J. A. & Person, J. L. 2009, Commodity Trader’s Almanac 2010, New jersey: John Wiley and Sons.
Kale, V. 2009, A guide to implementing Siebelcrm, New Delhi: Tata McGraw-Hill Education.
National Labor Relations Board (eds), 2008, Decisions and Orders of the National Labor Relations Board, National Labor Relations Board (U.S.), 347.
Owyang, J. 2010, Altimeter Report: The 18 Use Cases of Social CRM, The New Rules of Relationship Management. Web.
Pope, C. L. & Treacy, D. H. 2011, Corporate social responsibility report 2008/09. Web.
Pride, W. M. & Ferrell, O. C. 2008, Marketing Express, Massachusetts: Cengage Learning.
Ruth, B., Kannan, P. K. & Bramlett, M. D. 2000, “Implications of Loyalty Program Membership and Service Experiences for Customer Retention and Value.” Journal of the Academy of Marketing Science, 28 (1), 95–108.
Shimp, T. A. 2010, Advertising, promotion, and other aspects of integrated marketing communications. Mason, Ohio: South-Western Cengage Learning.
Shin, N. 2005, Strategies for generating e-business returns on investment, Hershey, PA: Idea Group. Smithfield Foods website.
Squier, S. M. 2011, Poultry science, chicken culture: a partial alphabet, New Brunswick, N.J: Rutgers University Press.
Sunil, M., Krishnan, M. S. & Fornell, C. 2005, “Why Do Customer Relationship Management Applications Affect Customer Satisfaction?” Journal of Marketing, 69 (4) 201–209.
Thomas, G. 2011, Animals, International Law, International Trade, and Morality, Netherlands: Kluwer Law International.