Dairy: Milk and Clover

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Clover S.A. (Proprietary) Limited (“Clover”) is the biggest dairy processor in South Africa with a turnover of R 4.3 billion and staff in excess of 6 000. Clover collects approximately 30% of South Africa’s milk supply and processes it into well known branded dairy and related products which is then distributed nationally and even exported into certain African countries

In this document, Clover’s external opportunities and threats, and its internal strengths and weaknesses will be evaluated in order to complete the relevant matrices, whereafter the Grand Strategy Matrix will be used to devise appropriate strategies to deal with the key opportunities, threats, strengths and weaknesses Mission and Vision Statements:

Clover’s mission (which answers the question “What is Clover’s business?”) is as follows: “Clover is a branded foods and beverages group with a strong emphasis on value-added products. Clover's South African dairy business is the perfect enabler to reach the Group’s widely dispersed customers and consumers. Extraordinary care is taken to develop brands which will occupy the number one or two positions in its chosen segments. It believes in the superior procurement, production, marketing, sales and distribution of these branded consumer goods (BCG) to its loyal consumers.” A review of the mission statement shows that most of the “9 C’s” (i.e. Customers, Products, Markets, Technology, Concern for survival, Growth and Profitability, Philosophy, Self Concept, Concern for Public Image and Concern for Employees) have been utilised in a short statement. It is suggested that the following of the “absent” “9 C’s” be included or elaborated upon in the mission statement Concern for employees;

Philosophy.
Its vision (which answers the question “What do we want to become?”) is as follows: “To be a leading and competitive company in South Africa and selected African countries, reaching every consumer on a daily basis with its most admired branded and trusted products, delivering improved and sustainable shareholder value by being a responsible corporate citizen and preferred employer.” A review of the vision statement shows stronger and more reliance by Clover on its brand than on its products. However, Clover’s vision is most certainly achievable, and in certain aspects one may argue that the vision statement might be outdated. THE EXTERNAL ASSESSMENT

Introduction:
Broadly, the purpose of an external assessment is to a company’s (in this case Clover’s) opportunities which could benefit it on the one hand, and on the other, threats that should be avoided. Generally, these external “forces” can be divided into the following categories: Economic forces;

Social, cultural, demographic and environmental forces;
Political, governmental and legal forces;
Technological forces; and
Competitive forces.
Each of these categories will be discussed briefly, as well as the opportunities and threats will be listed under each heading. Economic Forces:
The current and ongoing recession had a negative impact on the company’s interim financial results for the 6 months ending December 2008. More particularly and in the words of Clover’s Chief Executive, Mr JH Vorster, “a recent international publication on dairy matters stated that the industry faces a perfect storm of destructive economic forces and South Africa and Clover could not escape these forces”. The high unemployment numbers (which increases by the day) have an impact on disposable income, which in turn has an impact on buying behaviour, especially towards branded products (which Clover prides itself on), which as a very general rule carries a price margin. This, however, will continue to pose a problem, and as such, Clover must continue to ride the wave of brand recognition to endeavour to brace itself against the prevailing negative economic forces, which is seen as a huge threat. A further threat is the high number of farmers leaving the trade due to what they...
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