Agrana case
AGRANA case
From an industry-based view, how would you characterize competition in this industry?
At the beginning of 1990’s the competition in Europe depended on two major factors – regional integration in Europe and globalization. In 1990 the process of European integration speeded up and that’s why small firms were trying to develop their economies of scale to beat the larger competitors. Also, Central and Eastern European countries began to open markets for other Western European firms. And this was a chance to expand a new territory and its consumers. So the competition at that time was intense, but there were a lot of possibilities for companies to enter new markets. Such small firm as AGRANA took the advantages of this opportunity and began investing to CEE.
Globalization brought to the Europe such big companies as Nestle, Coca-Cola, Danone, which were looking for local suppliers, and AGRANA who produced sugar and starch took the chance to have contracts with these huge corporations. The main competitive advantages of AGRANA Company were high product quality, just-in-time logistics and excellent customer service.
From a resource-based view, what is behind AGRANA’s impressive growth? AGRANA achieved its growth by acquisitions and diversification.
AGRANA was concentrated on sugar and starch production in CEE till 2003 when European sugar marked was reorganized. After such step the company decided to find a new way for future growing. To achieve this goal AGRANA decided to use its main competitive advantage –the refining and processing of sugar beets, cereal and potatoes and enter the fruit-processing market. Also these agricultural raw materials grown all over Europe, the prices are steady and there is no need to import them from far countries.
The first reason of AGRANA’s growth is that entering fruit market gave to the company additional benefits in the starch division, as it has already established connections with food and beverage
From an industry-based view, how would you characterize competition in this industry?
At the beginning of 1990’s the competition in Europe depended on two major factors – regional integration in Europe and globalization. In 1990 the process of European integration speeded up and that’s why small firms were trying to develop their economies of scale to beat the larger competitors. Also, Central and Eastern European countries began to open markets for other Western European firms. And this was a chance to expand a new territory and its consumers. So the competition at that time was intense, but there were a lot of possibilities for companies to enter new markets. Such small firm as AGRANA took the advantages of this opportunity and began investing to CEE.
Globalization brought to the Europe such big companies as Nestle, Coca-Cola, Danone, which were looking for local suppliers, and AGRANA who produced sugar and starch took the chance to have contracts with these huge corporations. The main competitive advantages of AGRANA Company were high product quality, just-in-time logistics and excellent customer service.
From a resource-based view, what is behind AGRANA’s impressive growth? AGRANA achieved its growth by acquisitions and diversification.
AGRANA was concentrated on sugar and starch production in CEE till 2003 when European sugar marked was reorganized. After such step the company decided to find a new way for future growing. To achieve this goal AGRANA decided to use its main competitive advantage –the refining and processing of sugar beets, cereal and potatoes and enter the fruit-processing market. Also these agricultural raw materials grown all over Europe, the prices are steady and there is no need to import them from far countries.
The first reason of AGRANA’s growth is that entering fruit market gave to the company additional benefits in the starch division, as it has already established connections with food and beverage