Agrana Case Study

Topics: European Union, Strategic management, Middle East Pages: 5 (1598 words) Published: December 3, 2012
Case Study: Strategic Analysis of Agrana

Agrana was founded in 1988 as Investment Company for 2 and 3 starch and sugar factories respectively. It has continually grown to a worldwide organization in at least 26 countries and with approximately 55 manufacturing plants. It deals with three kinds of commodities which are interrelated: fruit, sugar and starch. It main work is to disburse fruit concentrates and preparations to companies producing soft drinks, dairy and baked products. This means even without the knowledge of this company you would be curious enough to enjoy the services it offers. Being an origin of a small country Austria this industry has received many challenges in trying to reinstate itself in the entire Europe and then become multinational. It had to compete with other organizations found in more powerful countries to gain competitive advantage; this was not achieved not until in 1989 where the Eastern and Central Europe opened their market for it bringing a significant increase in their scope of customers and also involving those big countries as members as partners. At the same time global companies such as Nestle, Coca cola and Pepsi partnered with this company further increasing it fame as stated by Farnell and McDonald (2010). With the problem of reorganization of the sugar market in Europe Agrana has been forced to focus on future strategies on how to enlarge the company according to stipulations by the European Commission.

Agrana has faced a lot of competition from already developed countries thus being forced to indulge in other marketing activities to be more competitive, other than processing sugar and starch it has currently started sanitization and processing agricultural raw products such as beet and cereals. It has also initiated fruits, biofuel and beverage processing sectors thus being diverse in its production (Agrana’s strategy, 2010). With its new management it is determined to produce eminent products and then sell them at competitive prices, this has been largely emphasized by its economics of scale and it’s restructuring of various divisions so that they can operate well and competitively. It has also employed an unswerving acquisition policy that has helped enhance the fruit and juice sectors. Agrane has also applied the tripod strategy of industrial, resources and institution levels to enhance its performance. According to Porters five forces ( 2010, 1 of 7) it industrial competition has encountered the 5 forces found in any dynamic market and these are: the contention from competitors , threat of substitutes, the purchasing power of customers for their product s compared to companies producing similar products, the threats of contingents to their products and also the threats of entrance. To ensure that it has increased its focus, differentiation and reduced its cost of leadership it has encouraged the use of the strategies of market segmentation among other generic strategies to keep up with the competition. It has also acquired companies from other organization and in other countries and this has largely encouraged its expansion increasing its grassroots reach out for its customers. With time these advantages have worked to their favor increasing their annual gross profit according to annual all its annual financial reports. It has also ways to deal with risk via prior planning and strategic control in all its operations. Such risks include the credit, liquidity, commodity price, interest rate and currency risks preventing it from incurring losses. Agrana also emphasizes on quality and satisfactory customer service to maintain customer loyalty and also enhance created a customer oriented focus in their operations (Annual report 2008/09; Agrana’s financial report, 2009).

Considering it resources then Agrana has and is expected to grow to a big organization since it raw materials are locally available and due to its ability to use both the physical and...
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