HI5019 Strategic Analysis of Lion Company Australia

The purpose of the report is to undertake a strategic analysis of Lion Company Australia. The business background and the type of industry are discussed in the report. The report will be further focussing on the analysis of the economic, physical, socio cultural, global and technological facts of the company. The report is divided in major two parts. In the first part of the report an external analysis of the company is discussed while in the second part of the report, an internal analysis of the work processes of the company is discussed.

The tangible and the intangible assets of the company is identified that will help in identifying the capabilities of the company. The core competency analysis of capability of the company is highlighted in the report. The detailed strategic analysis of the business of Lion Company Australia is outlined in the following sections.

Part 1 

1.1. Business Background

Lion Company Australia is a food and beverage company operating in Australia.  The products of Lion Company include a range of beer, wine along with dairy and other beverages including milk, yogurts and juice and soy (Lionco.com. 2018). The lion company Australia market premium brands such as dairy, juice, cider and alcoholic ready to drinks along with the non alcoholic beverages. Lion Company is focused on long term sustainable growth.

It is one of the leading companies in Australia as Lion Dairy and drinks brings delicious natural goodness to every Australian. The products of Lion Company in Australia are highly aligned with the aim of providing a better quality and considerably less processed food. It is a local company as the majority of products that is produced by the organization come from the Australians farms. Along with the alcoholic products, the strength of Lion Company Australia lies in their dairy and juice portfolio products. The Company aims in providing nutritious supplements to the all the Australians. The strength or uniqueness of the company lies in the fact that it eliminates everything that is not natural from the kids’ product range including the artificial colours and flavours.

1.2. The Industry Details

The Lion Company Australia is a food and beverage company. The product of the Company includes alcoholic beverages along with the non alcoholic beverages such as plain and flavoured milks, alcoholic beverages, juices and soy products (Lionco.com. 2018). The Lion Company Australia further owns a number of breweries and contract bottling plants all over Australia. The Company operates in a transparent and responsible way to offer the products to the Australians. The dairy and the juice products of Lion Company Australia deliver the essential nutrients requirements to the families across Australia.

1.3. General Environment Analysis

The general environment analysis of Lion Company Australia will include the economic, physical, socio-cultural, global, technological, political and demographic requirements of company and its significance in the business of Lion Company Australia.

Environmental analysis is a strategic tools and a process of identifying the external and the internal elements associated with a business which might affect the performance of the organization, either positively or negatively. The general environmental analysis of a company aims in assessing the level of threats and opportunities that might be present in a company. The general environmental analysis of Lion Company Australia is discussed in the following sections.

1.3.1. Economic Analysis

Lion Company Australia is a leading Australian company in the food and beverage industry. The Company is focused on a long terms a sustainable growth and has a clear strategy of achieving excellence in the market. It is one of the leading beverages companies in Australia. Lion although initially aimed in producing alcoholic beverage, with the increasing demand of the non alcoholic drinks in the market, the Lion Company started producing a range of dairy products as well.  The Lion Company has a stable economic growth.

Each year, the company needs to purchase hundreds of millions of litres raw milk from nearly 400 Australian farmers to meet the demands of their dairy products. It is one of the largest branded dairy businesses in Australia and the company therefore vested interest in developing a long term sustainable value for the company. However, with the increase in the supplies of milk to the global market, the Lion Company in Australia receives a huge competition for milk.

This is mainly because the domestic acquisition of the raw dairy milk is mainly driven by the global demand and therefore the increase or the decrease in the international commodity prices reflects in the local prices paid by the farmers as well. Since Lion Company Australia fetches the milk from local markets of Australia, it has a considerable impact on the economic environment of the company. This can therefore be a huge threat to the company. However, the blossoming business of Lion Company has a steady economic growth each year.

1.3.2. Physical Analysis

The physical property is a characteristic of a business or an organization that is measurable. The changes in the physical aspects of a company can result in a considerable loss and therefore this is one of the most significant factors to consider. The Lion Company Australia is one of the leading food and Beverages Company in Australia. The market position of the company is quite good and the company has a clear strategy of maintaining its market position in the food and beverage industry in Australia.

1.3.3. Socio-cultural Analysis

An accurate analysis of the socio cultural environment is essential for a company to identify the active threats in the market (Sarker, Xiao and Beaulieu 2013). The social and cultural aspects of Lion Company Australia are to be analysed to identify the affect of same on the business of the organization. Initially the company mainly focused on development of hard drinks. With an increase in the demand of the dairy products in the local market, the company started focussing on the dairy products as well along with the alcoholic beverages (Peppard and Ward 2016). The Company aims in maintaining a high nutrition quotient in their dairy products thus maintaining the goal of providing good quality products to the customer. Therefore, it can be commented that the social-cultural aspects of Lion Company Australia affects the company positively.

1.3.4. Global Analysis

Lion Company Australia operates in the local market of Australia and has a huge competition in the global market. As discussed earlier, there is a huge competition for milk in Australian market considering the level of competition between the processers. It is significantly important to understand that the milk production in Australia accounts for a low proportion of the total global volume and in such competition; it might eventually become a problem for Lion Company in Australia to fetch such a large quantity of dairy products from the market. The acquisition of the raw dairy milk is mainly driven by the global demand and therefore it is essential for the Lion Company Australia to consider this problem.

1.3.5. Technological Analysis

The Lion Company Australia makes use of recent technology in their business process. Since it is a leading business organization operating in Australia, it makes use of high end technological processes in their business. Furthermore, the company provides the opportunities to the clients to offer feedbacks that help in business improvement of the organization (Henfridsson and Lind 2014). However, in order to compete with the global companies the company needs to make use of more upgraded processes to match up to their level. It is not a threat to the organization but improvement in the technological processes will definitely help in business growth.

1.3.6. Political/Legal Analysis

The political or the legal factors associated with a company determine the extent in which the government might influence the economy or the central industry. There are no such political or legal issues associated with Lion Company Australia (Ogiela 2015). The Company runs a registered business and therefore it does not possess any standing legal issues that might affect the growth of the organization.

1.3.7. Demographic Analysis

The location of Lion Company Australia is suitable for business growth. Both the location of centres of Lion Company Australia is suitable for a maximum customer reach. Furthermore, the company offers online ordering facility that provides a business benefit to the organization.

The above discussed points provide a detailed analysis of the general environment of the company. The industry environment of Lion is elaborated in the following section.

1.4. Industry Environment Details

From a range of secondary sources, it is observed that the supplier power of the Lion Company Australia is quite high as the company aims in providing fresh, nutritious and safe dairy products to the clients (Morecroft 2015). The company offers the facility of online order supply as well which makes the supply power of the organization even stronger.

Lion Company Australia is known to develop customer centric products. This has a positive contribution to the buyer power of the organization. The company supplies both alcoholic and non alcoholic beverages along with dairy products (Wu, Straub and Liang 2015). The dairy unit was opened mainly to meet the increasing demands of the dairy products of Australian customers. The goal of long term sustainability is achieved by designing customer centric products. The non alcoholic beverage that is produced by the organisation is high on the nutritious value (Holtshouse 2013).  There is a high competition in the Australian market on the food and beverages and therefore the company has a high competition.

1.5. Competitive Environment

As discussed earlier, Lion Company Australia has a huge competition with its other business counterparts. Although it is a leading company in Australia, the growth of the other business organization in the same industry can act as a threat to the business of Lion. In order to ensure a long term sustainability of the dairy supply chain, it is essential for Lion Company Australia to ensure that the adequate financial returns are achievable to the customers (Dimitrios,  Sakas and Vlachos 2013).

The relevant firms or the business competitors have the capability to aim and capture the market of Lion by offering similar products in a considerable low price (Beynon-Davies 2013). However since the business requirements of the company aims in always providing good quality products to the customers (Bharadwaj et al. 2013). Along with dairy products it is recommended for the organization to increase the varieties of the soft drinks manufactured by the organisation.

1.6. Opportunities and Threats

The Lion Company Australia has a number of business opportunities. With the growing demands of the Lion products in the local market of Australia, the company has seen a steady business growth over the years. Furthermore, since the company provides good quality product to the customers, the chances of market takeover by its business counterpart is considerably less.

However, there are a number of similar companies operating in Australia that manufactures similar products as offered by Lion. This is a considerable threat to the market and the business growth of the organization. In order to eliminate the issue and to manage the risk, the company should work on the price of their product as well (Rainer et al. 2013). A reduction in the price along with keeping the quality intact will give the company a competitive advantage in the market.

Part 2 

2.1. Tangible and the Intangible Resources

The tangible resources of an organization refer to the physical and measurable assets of the organization (Chang 2016). The tangible assets include resources like land, vehicles, machineries and other items. The tangible assets are mainly of two types which are current assets and fixed assets (Schriber and Löwstedt 2015). The current assets include the different items such as cash, inventory and marketable securities. The fixed resources of a company include the resources that the company is making use in its business processes for more than a year.  

The intangible resources of the company include the non physical assets that are used over the long time (Rainer et al. 2013). Intangible asset refers to the intellectual assets (Day 2014). However, it is difficult to assign a value to the intangible resources of an organization as there is an uncertainty of the future benefits from such resources.

The tangible assets of Lion Company Australia include the equipments, the company’s stocks and the inventory items (Yallwe and Buscemi 2014). Apart from that, the land on which the company is located falls under the tangible assets of the company.

The business strategies and the intellectual business processes refer to the intangible resources of the company. The company designs its business processes in such a manner so as to target a large number of audiences or customers. Along with this, the brand equity is an intangible asset of Lion Company Australia.

For Lion Company Australia, both the tangible and the intangible resources contribute to the business growth in Lion Company Australia.

2.2. Capabilities of the firm

Lion Company is one of the leading organisations in Australia. The capabilities of this organisation include business expansion in other regions as well apart from Australia and New Zealand. The dairy products as manufactured by the organization are capable of flourishing in the global market as well (Petter, DeLone and McLean 2013). The aim of the company is to keep the nutrition quotient high while delivering the products which is one major capability of the organization. Apart from that, the company is capable of making use of modern technologies to increase the customers’ satisfaction. With the increase in the use of the online ordering system, the Lion Company will be able to reach a larger number of customers.

2.2. Core Competency Analysis

The core competencies associated with an organization is a concept of management of the different work processes within the organization. Core Competency is a combination of multiple resources that provides distinguishing characteristics of the firm in marketplace (Zsambok and Klein 2014). The core competencies of the organization fulfil three criteria of the a project which includes potential access to a wide opportunities, helps the company in making a significant contribution in perceiving the benefits of the customers and the core competency makes it difficult to imitate by the competitors.

The capability of the organization is to expand its business further. The core competencies associated with this capability include, creative thinking, conceptual thinking, appropriate decision making and improvement of the client services. 

2.4. Suitable Information System

A suitable information system is to be proposed for the organization that will help the organization in achieving the identified goals (Stair and Reynolds 2013). The suitable information system that is recommended for Lion Company Australia is decision support system.

2.5. Decision Support system

The decision support system will help the managements in taking accurate decisions (Accorsi, Manzini and Maranesi 2014). It is recommended to make a correct use of the decision support system to ensure that the decisions are taken on basis of the requirements of the organization and will work for increasing the customers’ satisfaction.

Conclusion

The report undertakes a strategic analysis of Lion Company Australia and evaluates it on basis of external and the internal analysis of the different aspects of the organization.  Lion is a food and beverage Company that aims in providing nutritious dairy products along with alcoholic beverages in Australia. The competitive environment of Lion Company Australia is discussed in the report along with the threats and opportunities. In order to explore the opportunities, a decision support system is recommended for the organization.

References

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