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Arcor Case Analysis - Term Paper Example

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Arcor is a locally owned company of Argentina specialized in production of confectionery, ice creams, chocolates and cookies and various other food products…
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Arcor Case Analysis
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Download file to see previous pages The company was founded in the year 1951, producing a wide range of products ranging from confectioneries to personal hygiene products and also frozen goods. At present the company operates in over 120 countries worldwide and Arcor was also ranked 14th amongst the top 100 candy companies at US in the year 2009 with a revenue of US $ 2.2 billion. The company provides high quality products and on the other hand to reduce the cost of the product Arcor vertically integrated the packaging system into their system. In the year the company was nominated as the ‘best company’ in Argentina from the chamber of commerce of US. This award recognizes the company who includes management sustainability in their corporate practices. The Company also encourages in promotion of education at Argentina and Brazil. This social responsibility is aimed to minimize the problems arising at workplace and the impacts of environment at the manufacturing plants (Innovalatino, 2010). Situation analysis SWOT Analysis The growth of the company and sustainable survival in the industry the SWOT analysis is conducted by the company. It helps the company to understand the strength, weaknesses, opportunities and threats of the company identification of which can assist in the implementation of strategies according to the needs of development. Strength Arcor has a great brand name at Argentina. The company’s huge percentage in the domestic market share with around 54% in the candy and 33% at chocolate market gave the company immense popularity in the international market due to its strong base. International acquisition strategy of Arcor with small third party to reduce its price to the end user along with the vertical integration structure for manufacturing of different ingredients facilitates the process of reducing price for the company. This is the major strength of the company which keeps the price low for the firm without affecting the quality of the product. Weaknesses The production plants of the company are all located in domestic country thus distribution of the company is a very important aspect to look after by the company. Proper training of the distribution channel and salesperson are required by the company failing to which might create problem for the company to reach to the customers in foreign countries. Building own distribution system can help the company to cope with this problem. Opportunity New product line from the company with over 50 new candy compared to 10 from each competitor can create a huge potential for the company in developing countries where the demand for candies are growing in recent years. Demand for chocolate and confectionery are also increasing which can be a great opportunity for the firm to launch new products in this category (Ghemawt, Rukstad, Illes, 2009, p. 5). Threats Financial crisis and economical slowdown is one of the major threats for the company. While entering into new market the political factor is also a possible threat as change in policies of the government can increase the tax on import and export duties which might force the company to increase price for the products, thus loosing the title of being the cost leader in the market. Competitive analysis To get an extra edge in the competitive environment Arcor should analyze the external environment of the firm and understand the threats from different dimensions like new entrants, suppliers, ...Download file to see next pagesRead More
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