What business model does Kerry group operate under? Examine Kerry Group’ Business Model.
Kerry Group PLC is a large supplier, operating in the food and beverages industry. Kerry Group supplies over 15000 food products ranging from ingredients and flavours, to beverages and consumer products to over 140 countries in the world. This encorporates manufacturing plants in over 23 countries and sales offices ina further 20 countries. The company currently employs over 220,000 employees across the globe.
In 1986 Kerry Group PLC was launched as a public company and was released on the Dublin and London stock markets. It now has a current market capitalisation of over €4 billion and with a cash.
The current CEO of Kerry group PLC is Stan Mc Carthy, who since his appointment to the position on 1 January 2008 has helped streamline and grow Kerry group PLC to a globally dynamic organization with increased effincies and commitments to innovation through increased investment in R&D.
The company has a defined structure, segmenting different elements to specific regions and with a very experienced and comprehensive leadership. (see below)
REVENUE GENERATION AND MARGINS
Kerry Group is the world leader in Flavours and Ingredients. The group develops and delivers innovative new ingredients flavours and derives specialized solutions for the food and beverage industries. In the domestic market (Ireland and the UK) Kerry group is the leading supplier of customer branded goods and offerings in its chosen categories.
In this diagram we see how Kerry Group is a leader in the Food and Beverage industry, (left column), and The leader in added value fridge food.(see right column).
Kerry group estimate that the added value chilled market within Ireland and the UK is approximately €18 billion out of an industry total of €90 billion. Kerry Group have strived to increase their share in this market and maintain market leadership this year with an increase of 2.1% in 2010 contrary to a -0.3% drop in 2009. This can be attributed to their innovations and developments created through R&D; although there was no increase in expenditure in R&D in 2008, it remained the same although in reality it was an increased % of expenditure relative to total revenue. It must be noted that as well that this can also be attributed to a slight recovery in the economic climate. Although Kerry group operates in a non-cyclical market system, it still showed a marked decrease in earnings.
Below is a pie chart illustrating the diversification of Kerry Group’s revenue sources from the Industry within Ireland and the UK.
While doing our study of Kerry Group PLC, it was evident that Kerry Group PLc recognizes the need for increased value and newly arising needs and as such they implemented new innovative products and ingredients so as to address these issues and generate increased revenue. Innovations such as “Egg Replacement” “Dough strength” “Dough development” were targeted at the ingredient marketplace whereas “extended shelf-life” and “Freeze-thaw Stability” were innovated so as to create better value for both the retailer and the end consumer.
Kerry Group has 5 main elements to its competitive strategy, using these it attempts to gain a competitive advantage over the over its rival firms and dominate the markets.
• Go-to-market strategy
• Added value chilled foods
• Unrivalled supply chain
• Supply chain innovation
• Acquisition & development strategy since 2001
Kerry Group operate a Go-to-market strategy which allows them to guide consumer interactions. This is achieved through technological advances and their innovative product solutions for the Flavour and Ingredient sector. This helps build strong customer relationships and develop already prosperous business channels. Kerry Group identify which...
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