There are four changes in RWD’s external environment.
1. The distribution is changed from direct sale to indirect sale for larger supermarkets such as Tesco. It depends on their ability to win contracts to supply retailers of the success of milk process. To adjust the situation, RWD improve ability to supply all a retailer’s outlets in a particular area. So RWD has the facilities to distribute milk in that area by improve the equipment and methods of distribution. Then they organize staffs to have training courses. Besides, they can outsource the distribution to other company. 2. The important customer Asda announced that in the future it would buy all its milk form Alar Foods. RWD lost its contract with Asda for the supply of 180 million litres of milk a year. And, 15% of RWD’s turnover and effectively wiped out the 15% increase in sales which the company had enjoyed during 2003. However, RWD has been able to recover from this setback. Later in 2004, it secured new deals with Sainsbury’s and Tesco’s. Then, in order to increase sales, RWD should maintain long-term, stable and friendly relationships with the customer. In addition, long-term contract with them is a good idea. 3. Competitor was down the purchase price. RWD in order to protect market share and profits, reduce the purchase price as well. This rivalry between milk producers has out strains on Wiseman’s relationships with its suppliers. RWD improves their production efficiency to reduce costs. In order to strengthen the relationship with suppliers, RWD made First Milk co-operative began to by 15% of shares in the company. RWD bought the farm, through backward integration to achieve cost savings. 4. OFT suspect there is a market monopoly of RWD’s business. And it launched an investigation in 2000. This investigation affects the corporate image and the loss of customers. To clarify the facts, RWD actively cooperate with the investigation. Through more public service activities such as financial award to help a community and improved company’s image. Since then, RWD adopts careful management. 1. The data are increasing year by year. Besides, the data have the rapid increase trend. These data shows that RWD Ltd is a successful company. 2. First is the Liquid milk sold (million litres) comes from milk volumes rate is about 57% from 2000 752 million litres to 2004 1180 million litres. RWD has a steady market share in UK milk market. The liquid milk market in the UK id dominated by three companies, Arla Foods, RWD and Dairy Crest which together have about 70% of sales. The liquid milk market in Scotland and the UK is static and growth comes from capturing a larger share of the existing sales. RWD’s achievement is 66% of its sales are now in England. Form the Product Life Cycle, the RED’s milk is in the Maturity Stage and it can be seen as the Cash Cows in the Boston Matrix. This kind of market and milk led RWD to compete for market share with its competitors. Additional, the management and structure didn’t bring RWD problems. The new structure is focusing on the core business goal and it is trying its best to provide market share. 3. Another important factor to show the successful of RWD is Fixed Assets. The Fixed Assets improved from 108336 in 2000 to 147246 in 2004. It is 10% of annual capital expenditure is committed to new IT equipment. In 2004, 1.5m pounds were spent on improving logistics. RWD companies continue to invest capital investment and it's expanding. RWD improve the buying milk, processing it and distributing by enlarging the company’s vehicle. Moreover, RWD continue to invest capital investment to expand production and sales scale. Finally, RWD’s business becomes the economies of scale. Economies of scale to help it better development. 4. To sum up, the data from RWD shows how successful it is. Q3:
To my consideration, there are three factors that influence the demand of RWD milk. There are Income, Substitutes, and...
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