Executive Summary
Maple Leaf is one of the leaders of the Canadian agricultural industry. Nevertheless, even industry leaders face challenges once they make a decision to expand and start operations in foreign economies. One of the most significant problems of the company is its effective functioning within the operating environment of the United States of America, a signatory of the Trans-Pacific Partnership.
Even though Maple Leaf’s products are highly recognizable for their quality and diversity, expanding into the American market is a challenge because other competitors have close relations with retailers. So, it is complicated to overplay them. To solve this problem, the primary recommendation for Maple Leaf is to review its organizational policy and recommend itself as an integral part of the U.S. business environment and agricultural industry, thus winning the trust of big retailers and becoming more popular among customers.
Description of an Existing Challenge
The specificity of Maple Leaf Foods company is the fact that it operates in two sectors of the agricultural industry – production of processed meat products and bakery. Its agribusiness group specializes in conducting operations that are necessary for supporting a firm’s demand in products for meat and bread production (Maple Leaf: Our business, 2016). It means that the company supplies itself with grains and cattle that are needed for driving the business and satisfying the needs of consumers and the industry.
As for now, Maple Leaf operates in Canada and the United States of America and exports its goods to more than 20 global markets, including other Trans-Pacific Partnership countries, Asia, and Europe (Maple Leaf: About us, 2016). Because its specialization is the agribusiness sector, the firm is susceptible to changes in the operational environment. However, it is imperative to note that exports are less influenced by these changes, especially compared to running production in another business environment.
As the company decided to expand to the U.S., it faced numerous challenges connected with entering new business terrain. First of all, its bakery felt a robust impact on the trend toward gluten-free bread and related health-related issues. Moreover, as the company initiated operations in the American industry, it had to boost its activities and find channels for distributing processed food and finished products. Becoming involved in a new market, the scope of operations and production increased.
It means that the volume of distribution became higher than volume of exports to the United States before launching new facilities. That is why Maple Leaf faced the most significant problem – successful cooperation with powerful American retailers is complicated due to strong ties with influential domestic producers and established long-term contracts with domestic suppliers (Sparling, 2014).
U.S. Business Environment
Nowadays, business environment in the United States is greatly affected by environmental issues. The emphasis is made on reducing anthropogenic influence on the natural environment and minimizing destructive impact on human health (Business Legal Reports, n.d.). It means that companies, especially foreign companies that just started operating in this environment, should focus on getting certified and prove that their products are safe and healthy.
It should be mentioned that control over domestic companies is lighter and they have more opportunities for development. In addition, this business environment is characterized by openness to the influence of international developments and changes in regulations. It means that except for meeting domestic requirements for doing business, any operating company should correspond with the international standards, especially safety requirements, thus making its products globalized and reorganizing supply chains in order to keep up with the times and market needs (Hamilton & Webster, 2015).
Finally, the specificity of the U.S. business environment is its complexity, diversity, and dynamism. As there are numerous different companies operating in varying industries, there is always a risk of being outperformed by companies that are either bigger and more influential or offer products of better quality (CDA Media, 2016).
It means that all decisions should be smart and focused on long-term operational effectiveness, especially in case of producing easily imitable and replaceable goods, and deployed strategies should be easily adaptable so that reactions to market changes are prompt and accurate. However, at the same time, operating in this environment is promising due to the country’s position in the global economy and strong economic ties with numerous foreign trade partners. It is especially true for the agriculture industry (Government of Canada, 2014).
Company Analysis
Because Maple Leaf faces the challenge of winning trust of the U.S. retail giants, the best option for company analysis is to conduct SWOT analysis that will be helpful for designing strategies for becoming more successful, overcoming this problem, and stimulating necessary organizational changes that would improve operational performance and outcomes of business activities (Fleischer & Bensoussan, 2015).
Strengths (S)
First of all, Maple Leaf is one of the dominant food produces in Canada. It means that its products are highly recognizable and popular. It has achieved global levels of competitiveness due to high quality of offered products, responsibility, and lasting history of operation in the Canadian market (Sparling, Cheney, & LeGrow, 2011). Furthermore, the assortment of products is diversified and attractive for different groups of population. Finally, the level of price is more competitive compared to other domestic manufacturers, as Maple Leaf offers food of better quality for lower price.
Weaknesses (W)
Major weakness of the company is that it is made up of smaller brands. Even though they are supported and driven by the primary recognizable brand, significant effort is required to manage them. In addition, all products offered by the company are easily imitable that increases the risks of being outperformed by other firms operating in the agriculture sector. Moreover, the company is used to functioning within the Canadian market that is smaller that that of the United States. Because of it, there is a risk of being outplayed by the U.S. companies and those are already familiar with the rules of play.
Opportunities (O)
Due to recognition, Maple Leaf has a potential for global expansion of its production facilities. Because it exports goods to more than 20 global markets, there is an opportunity of starting production in these countries, thus winning more consumers, increasing output and revenue. In addition, there is a space for attracting foreign investment due to current reorganization of the company and going global that can serve as a tool for the further development. Finally, because the company manages smaller brands, it is helpful for becoming more flexible and easily adaptable to market needs as well as diversify products in order to satisfy the needs and tastes of more people, thus expanding consumer base and increasing revenues.
Threats (T)
Being outperformed by bigger companies is a primary threat faced by Maple Leaf Foods. Furthermore, the business model of the firm is easily imitable, thus aggravating the risk of being outplayed. In addition, there are bigger companies that operate in the market that have enough power and influence to affect the price level, thus making Maple Leaf uncompetitive. Finally, there is a severe threat of losing popularity due to the overall trend toward leading a healthy lifestyle, e.g., becoming vegetarians. This problem is aggravated by the overall green consciousness. In case if the company uses environmentally unfriendly packaging, it might negatively affect brand image and economic outcomes.
SO Strategies
- Turn recognition into a tool for becoming popular in the United States and enhancing cooperation with influential retailers. The idea is to point to the fact that millions of Canadians have already chosen the products offered by Maple Leaf and trust its quality, making this strength the driver for further development.
- I am using economies of scale as a tool for guaranteeing price competitiveness and outperforming U.S. domestic companies. The idea is to attract retailers by offering products of better quality for lower prices.
S.W. Strategies
- Point to the fact that numerous brands operated under one dominant brand is an attribute of diversity, i.e., realize the company’s potential to satisfy the needs of consumers belonging to different social classes and having different preferences.
- Continuing to go global by transferring production to other countries in order to guarantee price competitiveness and global expansion as well as reaching distant regions that face the problem of inadequate food resourcesю
W.O. Strategies
- Further diversification of products. Because the company is a network of smaller brands, it is easier to investigate the needs of different people and take steps to satisfy them.
- Use new technologies in order to improve performance and economic outcomes, i.e., make the process of production automated that will be helpful for becoming more price competitive.
O.T. Strategies
- They are improving the quality of products by making them healthier. The idea is to avoid antibiotics given to poultry and cattle as well as pesticides and other dangerous chemicals in the process of production in order to improve brand image and attract the attention of big retailers that focus on the exceptional quality of products offered in their networks.
- Focus on signing long-term contracts with retailers in order to guarantee sustainability and operational success in the long run.
Alternative Solutions and Decision Matrix
For overcoming the challenge of the lack of cooperation with U.S. retailers such as Walmart and Target, Maple Leaf decided to employ a consolidation strategy aimed at increasing the effectiveness of operations, improving the quality of offered products, supporting company’s brands, and taking steps for becoming more price competitive. The firm focused on growing more specialized, i.e. producing similar types of products within one facility, and invest in automating the process of production in order to guarantee price competitiveness in the American market (Sparling, 2014). Nevertheless, there are other alternative strategies that could be used for handling the problem and supporting further expansion in the United States.
First of all, reviewing company’s P.R. policy could become the first step towards gaining attention of both consumers and retail giants such as Target and Walmart. The focus of the campaign should be made on operational effectiveness of the company, i.e. the fact that it has enough potential to deliver needed volumes of products, and quality of produced good. The rationale for pointing to this alternative is the fact that everyone is interested in buying food products of exceptional quality.
Moreover, if the challenge is to draw attention of influential retailers, emphasis should be made on their primary strategic objective – offer healthy food. Both Target and Walmart choose suppliers that do not cross the allowable threshold of chemicals used in the production process. In addition, focus is made on water used in production process and safety of packaging materials (Geiser, 2015).
Because the goal is to reduce negative influence on both human health and natural environment, Maple Leaf should point to the fact that its products correspond with these requirements and turn it into on of the strengths for driving business and fostering cooperation with local retailers, thus outplaying domestic producers. The idea is to promote customer-centricity, just like Walmart centers on shopper-centricity (Roberts & Berg, 2012).
However, upgrading the P.R. policy is not enough for achieving the set objective. In order to cooperate with powerful retailers, it is necessary to guarantee the exceptional quality of the proposed manufactured products. The idea is to minimize feeding cattle and poultry with antibiotics, as well as avoid pesticides in growing grains so that all products are safe and do not have a deteriorating influence on human health (Nader, 2011). Once the company can prove that its products are healthy and of exceptional quality, influential retailers that are customer-centric will be interested in replacing local producers violating these requirements with responsible ones like Maple Leaf.
One more idea is to invest in developing a network of distributors. The motivation for this alternative is the fact that an opportunity to have an order delivered to online shoppers overnight is a common novelty offered by big retailers, e.g., Target (Bose & Layne, 2016). In case if Maple Leaf not only promotes its operational effectiveness but also brings it to life, proving that it can prepare a needed volume of products within a specified time, it would make it attractive. It means that another alternative is the further improvement of the company’s organizational strategy with a special focus on market needs (Egan & Thomas, 2011).
Finally, the focus should be made on becoming easily adaptable to market changes and developments in the domestic economy. This alternative is applicable to reviewing organizational strategy and diversifying products in case of necessity (Information Resources Management Association, 2012). The motivation for highlighting the necessity of flexibility and being easily adaptable derives from the very nature of the U.S. business environment, as it is the only way to survive and becoming successful under such conditions.
Recommendations
The primary criterion for choosing the best alternative is its applicability and helpfulness for overcoming the major challenge and achieving the set objective – attracting the attention of most influential retailers in the United States and further expansion of the company. That is why the primary indicators of success are the number of contracts for supplying retailers with the company’s goods and trade dynamics. In case if there is a constant growth of trade volumes, the strategy can be considered as successful.
That said, the recommendation for Maple Leaf is to position itself as an American company when operating in the business environment of the United States of America. It does not mean that the company should forget about its roots and erase its uniqueness. The idea is to follow the rules of play that are commonly accepted in this business environment, especially by giant retailers, the company is interested in fostering cooperation with, such as Walmart and target.
The rationale for this recommendation is the recognition that food products offered by the company are easily replaceable, as there are numerous similar products in the market. This recommendation is chosen because it is the combination of all alternatives that were mentioned and described above.
In order to bring this recommendation to life, several steps should be taken. First of all, it is necessary to analyze the requirements of the biggest retailers, i.e., find out what chemicals are forbidden and acceptable, delivery and distribution policies, etc. Second, PR methods should be launched in order to draw attention to the company’s products. Finally, after the contracts are signed, it is critical to guarantee that all requirements are met, i.e., no regulations are violated, and timeframes for deliveries are met (Alstete, 2014).
Moreover, the primary focus should be made on enhancing communication with consumers, i.e., becoming consumer-centered, in order to increase demand for the company’s products (Wang, Jones, & Brown, 2016). The rationale for this recommendation is simple – in case if people are interested in buying products of Maple Leaf Foods, the biggest and most influential retailers will seek cooperation with the company because they themselves are shopper-centered and strive to increase their economic outcomes and financial performance.
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