Executive Summary
Sweet Milk Company is a provider for milk product. The milk industry is among the fast-growing industries. There is a high demand for milk by households and the company is leveraging the opportunity. There is also a high demand coupled with positive taste and preference for milk products including yoghurt and butter. The products of the company are in good position in the upper market of the industry (Everett 72-84).
The price and quality of the products is customer friendly. The popularity of the company has grown very fast. Sweet Milk has been in the industry for four years now. The company started on a small scale but has now broadened. The current president of the company is a qualified processing engineer. The processing knowledge comes in handy for the processing plant. The vice president of the company co-founded the company with the president. He is the organization’s marketing and sales manager. He holds a bachelor’s and master’s degree in sales and marketing
Sweet Milk has laid down several objectives to attain. There are plans to achieve in the next four years. The target is set for phases of one year. Since most of the market segment is a perfectly competitive market, the company intents to increase its sales by leveraging the inelastic demand for its products. Where the company is a monopoly and the customers’ preference demand and taste for the products is present, it will set price as per the elastic demand. This will ensure that the company positions its product in the market.
The other objective is to set up a product management team that will check out the market factors that affects the performance of the products. Its factors includes branding, packaging, labeling. The products offered by the company are more and sales have been on the rise. The company aims to be the leading supplier of milk products. It will achieve this by creating differentiated products that are sleek and meet the demands of the customers (Roger 15-20).
Product Description and Uniqueness
The company offers milk products. The company buys this milk from farmers and process in its plant. The products offered are yogurt and butter.The first segment of the plant is for receiving milk. Cooling is the next step. The milk is first treated and then graded to determine quality. The necessary chemicals are then applied. Processing engineers are responsible for this part. Fermentation produces yoghurt. First milk goes into the fermentation chambers. When lactose in milk is fermented, it produces lactic acid that converts the milk into yoghurt. Hitherto it is tang and bitter (Najmieh 12-22).
Production of butter is through churning of milk. It is also be done by churning fermented milk or cream. Milk from cows, goats, sheep, yaks and buffaloes is usable in manufacturing butter. The processed butter then goes through the next step that is the addition of preservatives. The processed yoghurt also goes through the same process. This preservative serves to ensure that the shelf life of the product is increased. Other additions balance and boost the nutritional value of the products. This is through the process of fortification. Although raw butter is prominent, a large section of people prefers processed and fortified one that contains minerals. To ensure that butter quality is high the butterfat percentage in the precessed fat is increased. The butter produced is salted or not (Najmieh 12-22).
The company does packaging and labeling of the product s on its own. The company buys packaging Cans for the two products from established suppliers. The outside of the products portrays the brand. The company has established its trademark and has cemented the same in the mind of consumers creating product loyalty. The products are also of high quality and hence more appealing to customers. The products have a well-balanced nutritional value and hence good for the health and well-being of the customers. There is a good proportion of minerals and irons.
The price of the products covers the cost of production. At early stages of start up the company experienced low turnover because it merely aimed at the break-even point. This has however changed; the company is cementing itself and acquiring a market share. The fruits are big. This is because the value of sales is far much bigger that the fixed and variable costs aggregated. The company experiences a competitive advantage for differentiated products. Improved quality, attractiveness, packaging, labeling, and positioning the product in the upper market is easy. The disadvantage is that much as the company has made its products there is still competition.
Market Segmentation
The company has segmented its market. The basis is on class, age, and geographical location. There are those parts of the country that are well financially and so the demand for the products is inelastic. This allows the company to discriminate the prices. On humble backgrounds, the prices are elastic. The market is more of perfectly competitive and this promotes price mechanism. The company also targets direct customers who buy from the company’s premises. There are also wholesalers, supermarkets and retailers who buy from the seller at lower price. They later sell at higher margin hence make profit (Trip 333-351).
Strategic Analysis
The strengths of the organization include a good reputation that has built good customer loyalty to its products. The trademark of the company has sunk in the minds of consumers. They easily identify with the products (Jost 27-30). The company has a well-structured distribution network. It links up with wholesalers and retailers. This ensures that the processing at the plant is a continuous process. The products have a good nutritional value and the company is leveraging this to improve sales. Resources and capital base of the company is high and well allocated.
The company adopted a divisional organizational structure. This ensures that there is specialization and division of labor. It also encourages innovation and competition among the units (Roger 15-20). The weaknesses the company experiences include the inadequate qualified staff. This reduces effectiveness and efficiency in the processing. This could affect negatively on the quality of the final product. The ripple effect of this is the reduction in sales and hence low turnover.
The opportunities that the company has include the positive state of politics in the country. When this is the scenario, the distribution of the products is easy because of security. It is also time to benefit from the social life of the people. Now the demand for yoghurt and butter is high as it is the tradition and current preference to use the products. Being competitive helps the company to remain viable and to stay above the break-even point. There are threats faced by the company. They include stiff competition from parallel companies and political instability. These reduce the level of security causing logistical problems in the distribution of the products. When the level of insecurity is high, the company cannot risk transporting its products. Changing tastes and preferences may also affect negatively the demand for the company’s products (Roger 15-20).
Works Cited
Batmanglij, Najmieh. Production of yoghurt. Cambridge: Cambridge University Press, 2007. Print.
Clarke, Roger. Starting Milk Business. Oxford: Oxford University press, 2002. Print.
Edwards, Everett. European Contribution To The American Dairy Industry. The journal of economic history 9 (1): 72-84. New York: Penguin, 1949. 72-84.
Huzinker, Trip. Studies On Butter Salt, Journal Of Dairy Science. 11 (5): 333-351 London: Routledge, 1929. 333-351.
Ralf, Jost. Milk and Dairy Products. Cambridge: Cambridge University Press, 2002. Print.