Dairy Farm

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Dairy Farm Group-Redesign of Business Systems and Processes The Dairy Farm Group of companies founded by Sir Patrick Manson began as a small business of supplying cow’s milk to the people of Hong Kong in 1886. In the next 100 years it gradually expanded to become one of the major food retailers with more than 1350 stores, restaurants in major cities of the Asia-Pacific region with employee strength of more than 45000 employees. The main business goal of the company is to be a leading food and drug store operator in both sales and shareholder value. Over the years it has followed a growth through acquisitions and partnerships strategy with major acquisitions like 200 7-Eleven stores, 180 Simago’s in Spain and joint ventures like that with Nestle. In addition to these internal problems, the group is said to have faced a host of external problems as well. Margins were shrinking because of economic crisis that gripped the Asian market in the latter part of 1997. Also new competitors had begun to emerge from European and US retail chains. I think the Daily Farm Group tried to expand too quickly without matching its resources and capabilities to fit with the increasing demand created by the expansions. I also think the group has no problem with its human resources. The problem lies in the integration of the workforce with its existing systems and operations. Also as the group comprises of a large number of small companies which are geographically dispersed, the group needs to identify and implement centralized basic core processes such as accounting, supply chain, supplier identification and management and also build a open network of communication where free flow of information could benefit each of these companies and lead to substantial cost reductions. In a bid to focus their attention towards achieving their mission of being a leading food and drug store operator, the group reorganized its entire management with a new CEO being hired in...
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