Business Strategy of Associated British Foods - Assignment Example

Comments (1) Cite this document
Summary
This research aims to evaluate and present Business Strategy of Associated British Foods. The company was formally employed in the sugar industry; however, it spread its operations to other unrelated sectors such as grocery, retail and ingredients…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.5% of users find it useful
Business Strategy of Associated British Foods
Read TextPreview

Extract of sample "Business Strategy of Associated British Foods"

Download file to see previous pages In relation to the study the company which has been selected is Associated British Foods, an international public limited company that has its headquarters in London. The company was established in 1935 and is the leading British supermarket chain as far as production of sugar and baker’s yeast is concerned. The company has five strategic business units: Sugar, Agriculture, Retail, Grocery and Ingredients. The grocery division stocks both branded and own label products. Brands that fall under its grocery division include Mazola, Ovaltine, Ryvita, Jordans and Twinings, Silver Spoon, Tip Top and Kingsmill. The company’s retail division (called Primark in UK and Penneys in Ireland) has a global presence with over 215 stores covering a total area of 6.9 million square feet. The retail division’s outlets are located in Belgium, Germany, Ireland, the Netherlands, Portugal, Spain and the UK. In 1963, the company acquired the British supermarket giant, Fine Fare which it sold later in 1986 in order to acquire British sugar. As of 2009, British Sugar fulfills the sugar requirements of more than half of UK. Finally, in 2007 ABF acquired an Indian food business. The company provides employment to more than 97,000 people and operates in more than 44 countries. UK contributes to around half of the company’s sales and profits. ABF has been rigorously diversifying into other markets than Sugar since early 2000s which is a crucial aspect of its strategy. ABF acquired ‘Twinings’ in 1964 to broaden the range of national and international marketing resources available. (Whittington, R. and Mayer, M., 2002). To date Twinings has been an asset in the company’s portfolio as it enjoys strong brand loyalty and has had a pull effect which has increased sales of other brands within ABF’s portfolio (Whittington, R. and Mayer, M., 2002).ABF further diversified into the food business with the intention of providing one-stop convenience shopping to customers; the company had realized that customer buying habits and trends were changing (Whittington, R. and Mayer, M., 2002). One of the most important reasons however was the instability of earnings from sugar sector due to its seasonal nature, coupled with the anticipated EU reform (Bertin, O., 2002). Another crucial aspect of ABF’s strategy has been its diversification and growth strategy. The company has, over the years, expanded to sectors beyond sugar which is a conscious and well-thought out strategy based on strong reasoning. Firstly, the highly debated EU sugar reform intended to cut surplus in sugar beet production by slashing prices by an exorbitant 43% which would adversely affect the company’s earnings (Bertin, O., 2002). Secondly, sales from the sugar business were subject to seasonal fluctuations which had to be recovered from non-seasonal businesses so the diversification to other lines such as retail, ingredient and grocery was well justified for ABF. (Bertin, O., 2002).Thirdly, world markets had become very unstable especially in the years following 2000 because of which its sugar line was capable of being harshly affected (Cherney and Elena, 2001). Furthermore, its sugar industry was highly dependent on the local UK economy for raw materials and output which made it undesirable for the company due to the country’s history of slow recovery from economic recessions so its diversification was justified. (Cherney and Elena, 2001). Therefore, it is evident from the reasons mentioned above that the company was formally employed in the sugar industry; however, it spread its operations to other unrelated sectors such as grocery, retail and ingredients (Austen and Ian, 2007). A key aspect of ABF’s diversification strategy has been its geographic diversification. In 2006, it got hold of Illovo; a South Africa based company which it has used as a means of penetrating deeper into the South African sugar market and could ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Business Strategy of Associated British Foods Assignment”, n.d.)
Retrieved from https://studentshare.org/business/1396325-business-strategy-of-associated-british-foods
(Business Strategy of Associated British Foods Assignment)
https://studentshare.org/business/1396325-business-strategy-of-associated-british-foods.
“Business Strategy of Associated British Foods Assignment”, n.d. https://studentshare.org/business/1396325-business-strategy-of-associated-british-foods.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
wi
wisozkkamille added comment 11 months ago
Student rated this paper as
Brilliant paper! Used it to complete an assignment for a business course. It was easy as ABC, for the first time in my life.

CHECK THESE SAMPLES OF Business Strategy of Associated British Foods

Marketing Strategy of Perfection Foods

..., pies or tarts. The second segment did not grow much in 2011 due to lack of creativity and innovation in their products. On the other hand, the individual cake segment received much growth. This is also due to the economic crisis customers are finding ways to cut down their spending. The sales of large cakes have also gone down due to nuclear families and busy lifestyle of the people. So people prefer more of small products like bar cakes or cup cakes, which can be bought and consumed fast without much difficulty. The coming years are expected to be a positive year for the cakes and bakery products industry. Corporate Strategy Mission and Vision The mission of Perfection foods is to make...
22 Pages(5500 words)Assignment

Corporate Strategy Assessment: British Airways

...challenges that leaders and workers have to contend. In sum, the essence of applying the most appropriate strategy lies in the organization’s ability to re-evaluate their current resources and to adjust and adapt to the changing environment. Reference List Air Transport and Airport Research. 2008. "Analyses of the European air transport market: Airline Business Models." [Online]. Available at: http://ec.europa.eu/transport/modes/air/doc/abm_report_2008.pdf (Accessed November 12, 2012). Balmer, J.M.T., H. Stuart, and S.A Greyser. 2009. "Aligning Identity and Strategy: Corporate Branding at British Airways in the late 20th Century." California Management Review, Vol. 51,...
10 Pages(2500 words)Essay

British Airways (BA): Corporate Strategy

.... Referring to the view of Wit and Meyer (2010, p.596), BA management has to be up to date with recent trends in the business environment in order to identify in a timely manner strategic needs in the supply chain and to deliver improved services to clients. BA must be vigilant while forming and implementing their corporate strategies, because “the design of organisational structure and management form key components of strategy implementation” (Grant 2010, p.175). Therefore, BA’s management has to give specific attention to the firm’s organizational structure and management approaches while making changes to their corporate strategy. Conclusion From the above discussion,...
9 Pages(2250 words)Essay

British Petroleum: Transforming Its Strategy

...British Petroleum: Transforming Its Strategy Introduction The origin of British Petroleum dates back to the early 20th century and the oil deposit discovery in Persia, currently known as Iran, which resulted in the establishment of the Anglo-Persian Oil Company in 1909. It is in 1914 that the British government took a large interest in the Anglo-Persian Company to such an extent that it was given a go ahead to supply oil for the Royal Navy during the First World War (Christiansen 2002). The company has since then emerged as one of the World’s top three oil corporations since its merger with Amoco in 1998. When judged by its market capitalization of $203 billion,...
7 Pages(1500 words)Research Paper

Contextualised analysis of Associated British Foods PLC

... governance requirements. The company has stated in its latest financial report that it has complied with all of the provisions and directives of the corporate governance as per the regulations. The company has always remained sincere to its corporate social responsibility and has always strived for it. Being a multinational, the policies of corporate social responsibility extends to all of the countries in which the company has its operations. 1 Overview of the Company Associated British Foods is not a new name in the food and ingredients industry and is considered analogous to quality and premium branding. The company is a diversified conglomerate having five major strategic segments which are sugar, agriculture, retail, grocery... Five...
36 Pages(9000 words)Dissertation

International Business Environment Assenment

...? International Business Environment of affiliation: Review in general terms each company’s growth and performance over the past five years. International business environment Compass group food and associate British foods are two different multinational companies headquartered in the UK. Both companies have registered exemplary performance over the last few years and they have emerged among the top market players in the industry. Below is a summary of the performance of these two multinational companies. Compass Group Food The compass group food has witnessed good and exemplary performance over the past...
14 Pages(3500 words)Essay

Core Activities of Associated British Foods Plc

...Analysis of Associated British Foods plc Core Activities and Operations Associated British Foods plc (ABF) is a diversified international company that grows and sells food and ingredients and manages retail outlets selling food and fashion items. ABF has 85,000 employees in 43 countries. Global sales reached 6.8 billion in 2006. Its business mission is to achieve strong, sustainable leadership positions in markets that offer potential for profitable growth through increasing the size of existing businesses, acquisition of complementary new...
8 Pages(2000 words)Case Study

Financial Analysis of Associated British Foods for the year 2008&2009

...aspect even when they are competitors in the same industry. Using ratios to compare one company with another could provide misleading information since each company assumes different financial and business risk profile. Ratios do not predict about the future of the company as they are dependent on the past financial data. An analyst determines the value of the company through the potential of the company to be profitable in the past therefore current financial ratios provide insufficient information about the future. BIBLIOGRAPHY Brigham, E. F. & Gapenski, L. C. 1994, Financial Management, USA: Dryden Press, Associated British Foods 2009 & 2008, Annual...
8 Pages(2000 words)Admission/Application Essay

Associated British Foods: Corporate structure, Parenting and Portfolio Management

...of its strategy, structure and organic growth. Through such analysis, the paper tries to establish a justification for inclusion of Primark, a clothing business within ABF which is largely engaged in the foods sector. Such an explanation is provided by way of a historical analysis of the company’s growth process. Introduction Associated British Foods PLC is a London based food, ingredients and retail company that enjoys a strong leadership position in the market. The primary production activity for the company is related to production of cereals, breakfast items, baking and confectionary, flour, tea, dairy products and...
11 Pages(2750 words)Essay

Business Strategy British airways

...Business Strategy Pierre Messier A4080128 British Airways and its Strategy British Airways is the national airline of Great Britain. It was established in 1974 as a result of a merger of 4 British airlines. British Airways were privatized in 1987. BA expanded as a result of acquiring British Caledonian in 1987, Dan Air in 1992, and British Midland International in 2012. In 2011 British Airways merged with Iberia, creating the International Airlines Group (IAG), the world’s 3rd largest airline group in terms of annual revenue and the 2nd largest in Europe.   Task 1: (LO...
17 Pages(4250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Business Strategy of Associated British Foods for FREE!

Contact Us