Preview

Ioi Group

Satisfactory Essays
Open Document
Open Document
298 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Ioi Group
The IOI Group: Creating a Malaysian Palm Oil Multinational
The case discusses the story of the IOI Group, one of the largest palm oil players in Malaysia, which has seen rapid growth in the past two decades. Family-controlled since 1982, the IOI Group's main businesses initially were property and palm plantations. As a relative latecomer in the palm oil industry, it grew both organically and through acquisitions, and, in 2010, had sales of about US$4.3 billion and employed 30,000 people. Over the years, the IOI Group moved away from producing crude palm oil (CPO), a key commodity, and pursued a strategy of vertical integration by moving into downstream activities such as food ingredients manufacturing and oleochemicals. This transformed IOI from a Malaysian plantation company to a global ingredients manufacturer, making IOI a good example of a so-called "emerging market multinational." The case takes the point of view of the second generation family leader who is currently in charge of the downstream businesses, and discusses three challenges he faces in IOI's transformation process: 1) the issue of optimizing and integrating the global value chain; 2) the most suitable way to coordinate a multinational company with substantial global sales and operations; and 3) adaptation to changing needs of global customers. All this is supported by extensive information on the changing dynamics in the palm oil industry, where emerging market players are moving up the value chain, snapping up manufacturing assets from global fast-moving consumer goods companies, such as Unilever, while the latter increasingly focus on branded goods and seek to exit the lower margin and capital intensive manufacturing of ingredients. Students are asked to analyze the changing industry dynamics and provide recommendations given the goal to make IOI a leading palm oil

You May Also Find These Documents Helpful

  • Better Essays

    There are many businesses that have expanded their business internationally in order to benefit in some sort of way rather it revenue or a better market for their product. In this thesis, I will research a multination company and its international strategy over the last 10 years. I will elaborate on it international orientation and rather it etho-, poly-, or geocentric. I than explain why the company decided on expanding to the chosen locations. Then I will clarify if they had core capability to succeed in those markets, along with its opportunities and constraints. Last, I will define value chain dispersal and integration strategy and describe the strategy that’s organized around it.…

    • 945 Words
    • 3 Pages
    Better Essays
  • Powerful Essays

    The author of this paper’s intention is to present and examine a multi-national corporation. Dissect the how’s and what’s about it, and simply discuss its processes. The author will be giving a brief background on the company to easily elaborate how it is that the company is successful compared to its past. Its products and services will be conversed and the company’s industry will be discussed as well as its competitors and its market. Basically everything that has to do with the company will be discussed. Everything will be brought forth for the purpose of finding out what the company’s strategic management process is. In conclusion giving it a feasible action that can be applied to better the company overall.…

    • 2178 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    John Manzoni, Chief Executive, Refining and Marketing for BP, gave a speech in 2005 discussing BP’s future in globalization and the challenges that lie in an increasingly global business environment. He said that business (BP) is the heart of society and can’t ignore what is happening around it, and that BP exists for a purpose, which is to provide goods and services that people want to buy at a price they can afford to pay, and BP exists because of shareholders who put their money in trust with business expecting a reasonable return in exchange (Manzoni, 2005). “Business won’t succeed if it isn’t engaged with the society around it” (Manzoni, 2005, p. 1). The most dramatic change of the last two decades has been the globalization of economic activity, and even though there has been international trade for centuries, the scale of the change over the last twenty five years has been remarkable (Manzoni, 2005). Evidence of globalization is evident is in almost every sector and is changing the shape of international economy (Manzoni, 2005). Manzoni lines out four main challenges for BP as they prepare for this increase in globalization. The first is absence of framework of global rules, a company based in one country must obey the rules of that jurisdiction but it must also and simultaneously obey the law in each and every place in which it is working (Manzoni, 2005). The second challenge is the way in which BP is organized and managed, the sort of global scale and reach which is necessary to be competitive on an international scale requires a widely distributed set of operations, spread over many times zones and jurisdictions (Manzoni, 2005). The third challenge is cultural diversity. The nationality of the company has to be reflected in the makeup of the workforce and senior management especially. It is very hard to find people who can go into different cultures and bridge the divides (Manzoni, 2005). The fourth issue is…

    • 430 Words
    • 2 Pages
    Good Essays
  • Best Essays

    Organization for Economic Co-operation and Development, 2007, Moving Up the Value Chain: Staying Competitive in the Global Economy, viewed 3 May 2013,…

    • 2858 Words
    • 12 Pages
    Best Essays
  • Powerful Essays

    The authors name several examples of what challenges companies faced and how they restructured to adapt to markets in developing countries. Also, reasons for why existing structures are too deficient to exploit location-specific advantages and gaps between multinational companies' ambitions and achievements. Moreover they introduce structures such as the the so-called T-shaped structure as one model that companies can adopt. At the end the authors state that structural change is necessary, companies must make trade-offs, appropriate to the economic environment and competitive context to create a global competitive advantage.…

    • 1099 Words
    • 5 Pages
    Powerful Essays
  • Best Essays

    Report on Tesco

    • 1460 Words
    • 5 Pages

    All corporations have to work at expanding themselves within the region as well as internationally. They have to work at framing and adapting different strategies in order to reach optimum success. This report analyzes the external environment and scans it thoroughly so that strategies can be implemented and adopted later on.…

    • 1460 Words
    • 5 Pages
    Best Essays
  • Good Essays

    As head of the international division, Luis Morales should focus on improving the communcation between the domestic and the international companies. Kent's weak influence (due to minority shareholds) on the joint ventures and subsidiaries overseas made the organizational process even more complicated. Even after Kent become majority owner it proved difficult to exercise controll. Another obstacle for global integration was that markets abroad differed significantly from each other. Mainly by various regulations concerning products but aslo in political, cultural, economical and leagal aspects. These aspects can either raise or lower the cost of doing business. (Hill, 2011)…

    • 650 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Seven Rules Distribution

    • 4213 Words
    • 17 Pages

    new international markets makes a foray into an / \ emerging market, carefully limiting its exposure by appointing an independent local distributor. At first, sales take off, revenues grow pleasingly, and tbe entry is praised as a smart move. But after a wbile, stagnation sets in and sales plateau. Alarmed, tbe multinational 's managers try to discover wbat happened. They soon settle on wbat tbey perceive to be tbe main obstacle to sustained growtb: the local distributor that got the company off to a flying start bas run out of ideas and is now underperforming. This pattern is repeated again and again as multinationals expand into new markets in developing countries. Over time, a corporation 's executives decide tbat the distribution organization isn 't run as they would like. They rush in and make major changes, in some cases buying the local distributor or, more often, reacquiring tbe…

    • 4213 Words
    • 17 Pages
    Powerful Essays
  • Good Essays

    business assignment

    • 4918 Words
    • 20 Pages

    Introduction: this term paper is an assigned job. This job is about analysis’s the Marico Bangladesh limited of parachute coconut oil all of things start with first journey of Marico limited in Bangladesh and how they introduce parachute product ,what is the more important and what is less important ,which growth strategy use and so on . Marico is a leading Indian group providing consumer product .it is a multinational company. it will be helpful for any organization.…

    • 4918 Words
    • 20 Pages
    Good Essays
  • Good Essays

    Case Study-Caltex

    • 714 Words
    • 3 Pages

    Shift will bring oil giant closer to customers: chairman. American oil giant Caltex Petroleum is moving its global corporate headquarters to Singapore from Irving, Texas – making it the first multinational ever to do so. The global HQ relocation, which will become operational by March next year, will involve its top brass, including group chairman David Law-Smith and other executive management staff, being based here. “The move to Singapore will position us centrally in the area where we do most of our business and allows us to be closer to our customers and serve them more effectively,” Mr Law-Smith said in a statement out of Texas late on Tuesday. Besides, many of the group’s key operations are already located in the Republic, he added. Caltex is a joint venture between Chevron Corp and Texaco Inc. Elaborating on the rationale for the move, a Caltex spokesman in Texas said that the company obtains about 75 per cent of its revenue from Asia, making Singapore a more practical, centrally-located base for the 15 executives and support staff that will be coming here by March next year. Caltex decision is a significant feather in Singapore’s cap. A Caltex spokesman here told BT that the company had considered other Asian sites like Hong Kong, Manila and Sydney before deciding on the Republic. This highly significant shift of its world-wide corporate HQ to Singapore follows Caltex’s establishment of its global oil trading HQ here. In January last year, it also started increasing its Singapore Office’s Asia Pacific responsibilities by posting more of its key regional officials here. As a measure of how much oil trading it does from here, latest available figures show that its world-wide trading HQ, Caltex Trading, based here, was Singapore’s largest oil trader in 1996 with sales of US$9.9 billion (S$16 billion), or equivalent to about 12 per cent of Singapore’s gross…

    • 714 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    HBC case

    • 351 Words
    • 2 Pages

    Creating a social structure as family is still a very effective way to reduce the level of private trade nowadays. However a lot of global companies do not use it well which leads to failure of overseas development. For instance, Cemex’ integration strategy is to completely change the management team and draw clear boarder…

    • 351 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Multinational enterprises (MNEs) are increasing their presence in the lives of more and more consumers as companies seek to expand and promote their products to a still wider range of markets globally. As markets change and develop, so does the strategy used to enter them, and companies must be able to choose the correct way to enter markets in order to remain competitive. This thesis takes a look at how MNEs in the FMCG industry enters new markets, more specifically emerging markets. In order to gain an understanding of this we look at three specific markets, namely Russia, India and China. We attempt to answer if the way MNEs enter emerging markets is in keeping with what would be expected from the OLI framework (Dunning 2000) as well as the work done by Buckley and Casson (1998). Additionally we try to gain an understanding of why any discrepancies exist and whether they can be explained by the nature of emerging markets as well as the characteristics of the FMCG industry. An ability to adapt and tailor specific strategies to individual markets gains more importance, especially with regard to emerging markets, as the difficulties and obstacles presented when entering these markets often proves both new and unique. In many cases there are difficulties in underdeveloped markets, specifically concerning consumer spending power and brand awareness, as well as logistics and infrastructural inadequacies compared to western markets which serves to make the correct approach to entering emerging markets of high importance. The methods first employed when entering emerging markets are often unsuccessful and needs to be modified as market knowledge is gathered and opportunities present themselves. In the three markets analysed in…

    • 42801 Words
    • 172 Pages
    Powerful Essays
  • Better Essays

    P&G: SK-II case study

    • 2272 Words
    • 10 Pages

    In this case study we are introduced to P&G as an organization and their changes in structure overtime. More specifically, after the acquisition of Max Factor Japan and success in its SK-II line, questions are raised about whether global expansion is feasible and profitable as a franchise. De Cesare ran this skin-care line in Japan, but he reported directly to Lafley. This is crucial because global expansion would require Lafley’s approval in budgeting and organizational support. P&G recently went through major organizational changes over a period of six years known as O2005. This created huge questions in the strategy that would be put together in the case of a global expansion for SK-II. Within the U.S. Procter & Gamble originally followed an organizational structure consisting of seven different divisions that were furthermore shattered into 26 distinct categories. Each category had its own R&D, supply management and marketing. In addition, the international organization was divided into four regions that were then broken down individually by country. The GM’s of each country and each of the four individual regions were uniquely held responsible for earnings. This would create conflict and resistance in unifying the company due to cultural issues affecting sales in certain countries.…

    • 2272 Words
    • 10 Pages
    Better Essays
  • Satisfactory Essays

    [University of Phoenix Custom Edition e-Text]. New York, NY: McGraw Hill. Retrieved from University of Phoenix, MGT448 – Global Business Strategies Course Web site.…

    • 400 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    During the last half of the twentieth century, several barriers to international trade fell. In the present economy, a successful corporation is one that thinks globally, making decisions with an understanding of the nature of global industries and dynamics of global competition. Gaining the competitive advantage hinges on a well designed global strategy. The McDonald's brand, for example, has achieved solid growth in its international division for the past fifteen consecutive years. Its international division now accounts for almost sixty percent of corporate profits. The McDonald's global success story is set in an aggressive growth, competitive standard-cycle market and hinges on a strategy that includes a market-leading multi-domestic strategy that includes careful external environmental scanning, innovation, and tactical competitive action that builds on its core competencies.…

    • 1893 Words
    • 8 Pages
    Powerful Essays