Parmalat SpA Market Management - Research Paper Example

Company Research Table of Contents 3 2. Information Management 3 3 2 Order processing System 3 3 2.2. Demand Forecasting Information System 4 3.1.3 Organisation Structure 5 3.2 Supply Chain Performance 6 3.2.1 Overall Performance 6 3.2.2 Relative Performance 7 3.3 Business Context 7 3.3.1 Competitors Behaviour 7 3.3.2. Regulations 8 3.3.3 Opportunities 10 4. Main problem in Currently Supply Chain 11 5. Recommendations 11 6. Conclusion 13 References 15 3.1.2. Information Management 3.1.2.1. Order processing System Parmalat SpA is one of the leading multinational dairy companies in Italy. This particular company is also considered as the global manufacturer as well as supplier of dairy products. In the context of business process, order processing system can be defined as the course of action through which data and information are collected either directly from the customers or the service providers with the aim of placing order to the concerned company. The company mainly focuses on the quality of dairy products based on the demands of the customers. Additionally, the company orders are placed on the basis d customer’s needs of dairy products. Furthermore, packaging quality is also maintained so as to provide better quality products to the concerned customers (Parmalat, n.d.). Parmalat SpA also maintains proper system so as to collect relevant data and information with respect to people residing all around the world. Therefore, the managers of the company are required to maintain good relationship with the distributors so as to supply the required products within stipulated time period. Furthermore, the increase in distribution channels also enables the managers of the company to place the order of customers within the time limit and also meet the demands with respect to dairy and other associated products. In the context of order processing system, the company operates five distributor channels or networks to efficiently to supply its dairy products globally. The national distributing network of the company enables facilitating the services to retail customers and fulfil their demands of dairy products. The company also has several distributors in different countries around the world to provide better order services to the customers and achieve the organizational goals respectively (Parmalat, n.d.). 3.1.2.2. Demand Forecasting Information System In the context of business operation, demand forecasting can be defined as an activity that is performed with the aim of estimating the quantity of product or services that are likely to be purchased by the consumers. The quality of products being supplied by the concerned company has raised its demand globally among the consumers. Moreover, it can also be evaluated that the members of company always focus on laboratory testing program to maintain the quality standard of products. The managers and employees of the company focus on improving the quality and freshness of dairy products because of its increased demand as well as to retain the customers with the aim of maintaining profitability in long run (Vorst & et. al., 2007). The company mainly operates in Italy thus the demand of dairy products is relatively high in origin country. The members of Parmalat SpA use the past information related to product demand in order to forecast future order of dairy products that in turn also enables to predict the future growth of the company. The demand forecasting activity enables the members of Parmalat SpA to set affordable price of products so that customers can easily purchase the products. The good quality as well as the reasonable price of products raises the opportunity for company to easily enter into new market and expand the business globally. The company uses advance technology to produce better quality products to enhance position in the target market as well as to raise demand of dairy products in long run. Therefore, the demand forecasting information system enables the company to increase the selling of products in the market and also to improve the market position (Vorst & et. al., 2007) 3.1.3 Organisation Structure Theoretically, organizational structure defines the approach in which the respective task and activities of any business has been carried out. Additionally, Parmalat SpA organizational structures ascertain the aspects based on which the different task are allocated in the organisation as well as the manner in which it is supervised by the higher authorities (Ghuman, 2010). Besides, Parmalat SpA organisational structures work is such a manner that it reflect and relates with the achieving the ultimate aim of the business in effective manner. On the other hand, the approach of organisational structure of business expresses the manner based on which the different responsibilities and process are distributed and govern in the organisation. Besides, the organisational structure of Parmalat SpA focuses towards integrating, measuring, managing, evaluating and monitoring the performance of various activities of the business in effective manner and thereby minimise the possible risk from the business operation. In this consideration, it has been ascertained that Parmalat SpA organisational structure assist the business to focus over its core objectives through effective medium of communication and functions of different business task in international environment. On the other hand, three macro-areas are playing a key role in Parmalat SpA organisational structure that includes central the parent company i.e. Parmalat Group from where coordination functions, operating companies in international market and distribution agreements that focus over non-core areas of business operations. (Parmalat S.p.A., 2005). 3.2 Supply Chain Performance 3.2.1 Overall Performance In the general context, supply management is one of the core and integral part of operational procedure for any business unit in present day context (Baily, 2009). Considering this important aspect, it can be apparently reflected that Parmalat SpA follows certain procedures based on which selects and manages different suppliers of the business efficiently. Presently, Parmalat SpA facilitates its global operation effectively by establishing a proper contract with its key supplies that includes dairy farmers, the units that provides different packaging services and business units works over proper management of warehousing and distribution (Supply Chain practice of business has been depicted in appendix). Besides, the approach of selecting effective supply chain management enables the business to work effectively on three product segments that includes dairy products, milk as well as fruit beverages. Thus, in relation to the aspect of performance assessment, company selects the prospective suppliers through forming effective communication with the suppliers. Moreover, every year Parmalat Group praised its supplies for providing superior quality of products through effective reward system. The overall performance of supply chain reflected that Parmalat undertakes effective operation towards production and supply of safe and hygienic food products utilising their effective supply chain management approach through complying the various statutory as well as regulatory requirements of the international market. Apparently, the company executes its various contracts with the different suppliers considering the aspect of maintaining the principles of equality as well as good faith (Parmalat, 2015). 3.2.2 Relative Performance Parmalat SpA puts considerable amount of importance on developing as well as enhancing the effectiveness of its supply chain activities to improvise its overall production process that significantly assist the business to attract the potential customers to purchase the products and/or services. Apparently, the products that has been manufacture and distributed by the company is relatively based on the need and perception of the customers. In this regard, the raw material that comes from different suppliers of the business are been acquired according to just-in-time approach so as to maintain the aspect of freshness and hygiene in the offering of the business. Notably, the entire manufacturing process of different products in Parmalat SpA is viewed to be synchronized that helps the business to avoid unwanted storing and thereby ensure superior quality of products. Moreover, the entire process of production and distribution is maintained through forming close relationship with suppliers and distributors. Correspondingly, the supply chain related activities of Parmalat SpA encompass of different operational activities that include moving the products from the production units of different raw materials and supply the final products to the end users. Nevertheless, the relative performance of supply chain activities of Parmalat SpA affirms that the business significantly assist in determining the perception of the end users and relatively the task is carried out to match the demand and supply of various products in the international market (Parmalat, 2015). 3.3 Business Context 3.3.1 Competitors Behaviour Competitor’s behaviour is regarded as the response of rival firms towards offering the business that influences the performance of concerned business. Positive response over competitor’s behaviour will significantly assist the business to maintain their competitive advantage as well as profitability (Fleisher & Bensoussan, 2015). In response to analysis of the competitor’s behaviour in the international marketplace it has been evidently ascertain that Parmalat Group highly believes in fair as well as loyal competition in the market with various strategies, which has also been recognised to help the business in year-on-year enhancement of total revenue of the business. Evidently, positive perception over the behaviours of competitors can be justified, as the total revenue during the year 2014 has been increased from 2013 revenue i.e. 856.8 million euro to 861.5 million euro (Parmalat, 2014). Besides, Parmalat SpA maintains the aspect of ensuring superior level of quality as well as cleanliness in the process of manufacturing the products to maintain its competitive advantage and act accordingly with the competitor’s responses. On the other hand, from the analysis of the competitor’s behaviour it has been further evaluated that Parmalat through its various promotional mechanism emphasis over providing accurate, complete and necessary information, which significantly enables them to make informed as well as rational choices. However, as Parmalat perform its operation in the international market the performance of business is significantly influenced by the key business of nations. For instance, the key competitors of Parmalat Group in the Canadian marketplace are Dean Foods Company, Saputo Inc and Agropur Cooperative. Nevertheless, this business emphasises over diversifying their operation with strategies and expansions of business offerings to capitalise the market opportunities (Hoover’s Inc, 2015). 3.3.2. Regulations On the contrary, in order to work efficiently in the international market the operation of Parmalat is highly impacted with the various national as well as international codes of conducts and regulation. In this relation, the analysis reflected the fact that Parmalat Group has strong relation with various trade associations, unions, as well as environmental associations to present and maintain its position in the market. Additionally, the various operation of Parmalat Group in international market is governed in accordance to the rule of law as well as under the provisions of various codes of ethics that enables them to work effectively. The codes of conducts encompass various principles, rules, standards as well as procedures that derive the operation of the business in highly ethical manner. On the other hand, the code of ethics is associated with standard behaviours that all the association from directors to employees needs to compel. Apparently, rules and regulation facilitates development of strong foundation in making the corporate culture and pursue continuous technological innovation through providing superior quality of product and service along with protection. In general prospect, the rules and regulation constitute as an integral tool to safeguard the interest of business and ensure that all association that are influenced by the operation of business are been treated with high level of integrity and respect. Therefore, company emphasis to conduct its operation through compelling various relation, which has been applied over all the nations in which company is operating taking the consideration of the cultural, political, commercial, social and economic policies (Parmalat, 2012). Correspondingly, in the context of analysis of regulatory impact over the performance of business in the international market it can be ascertained that Parmalat Group mission and vision worked as guided principles based on which various policies, rules and regulation are been derived and practice in the business. In consideration to the regulation, Parmalat Group puts high level of emphasis over quality, safety as well as cleanliness in their production and distribution processes. Notably, in the operation of business, Parmalat maintains different regulations that are responsible for conducting their operation that best suit to provide maximum protection to environment and promote awareness (Parmalat, 2012). 3.3.3 Opportunities As it has been affirmed, that Parmalat SpA is one of the leading Italian Multinational Corporation associated with dairy and food products that reconciles high level of profitability and continuous development of strong image in the mind of customers thus signifies increased opportunity for business growth in long run. Additionally, it signifies opportunity for business to expand it scope of operation in international market to enhance its position. In this relation, the recent expansion of the business operation in Mexico and Brazil also signifies high opportunity to capitalise the market with its key strategies. Besides, the continuous increase in the needs of company products provides significant opportunity to business with respect to development of more innovative products in the market with the assistance of research and development. Besides, the unique production of product and services using the Ultra High Temperature (UHT) process enables the business to capitalise the market opportunities to gain customers of the competing firms and non-customers in the new market with high promotional activities to enhance the awareness of its different products. On the other hand, superior emphasis over the research and development will enable to develop highly innovative ranges of products and/or services in the market (Parmalat, 2013). 4. Main problem in Currently Supply Chain The supply chain management can be challenging for the concerned company in order to gain appropriate supplier of raw materials well as other resources required for manufacturing dairy and other associated products. The supply chain issues mainly faced by the concerned company include proper management of organised relation with the concerned suppliers. Another supply chain issue faced by the company is supplier problem. In this regard, it can be evaluated that the company face difficulties associated with the supply of raw materials in the market for producing products and increasing the availability in market. The company also faces the problem in developing the new innovative techniques associated with product development. In addition to this, the members of company are required to produce innovative products thus requires supply of quality material that in turn signifies the importance of good supplier. Another issue faced by the company is associated with proper management of suppliers. The company faces problem in maintaining business process that are further influenced by the negative implications of the supply chain management. Furthermore, the company faces difficulties in maintaining the manufacturing cost of products. To maintain the manufacturing cost of product it has become essential for the company to manage proper supply of raw materials affordable costs. Due to this particular issue the company faces difficulties in fixing the price of dairy products. In the present day customers want good quality products at reasonable prices that are likely to be influenced by issues associated with the supply chain management (European Commission, 2009). 5. Recommendations Parmalat is one of the leading dairy companies in Italy despite the fact faces a number of issues that are likely to have negative impact on the growth and development of the concerned company in the long run. In this context, the company needs to implement certain recommended strategies for reducing the supply chain issue and also improving the business process. The company needs to develop new technical as well as innovative skills for development of dairy and other associated products. The company should develop good and healthy relationship with suppliers, distributors and retailer for maintaining proper availability of products in market and operation of effective business. By increasing the availability of products in market the members of company are able to meet the demands of customers. By maintaining the good relationship with distributors the company can distribute the products to the end users effectively without facing any problem. It also helps the company to achieve the sustainable development and continue long-term business with supplier as well as distributors (BSR, 2010). The company should also develop new strategy in relation to supply chain technology to provide clear information to the customers about products and increasing awareness of customers regarding the dairy and other milk products. Additionally, the company should raise the labour productivity and also improve the efficiency of supply chain to enhance the operation process of the company. The company should develop the unique products to increase target market that in turn facilitates entry into new market for expanding the business. The Company mainly operates its business in Italy thus should provide the best services to the customers based on their demands to maintain loyalty. It helps the company to increase the sale of products in target market along with the neighbour markets. The company should reduce the cost of raw materials and other cost to maintain manufacturing cost of products. By maintaining the cost of products the members of company are able to increase the numbers of customers as well as raise the sale of products. The company should maintain the transportation cost to export and import the products and also to perform international business successfully. Furthermore, the company should implement these strategies for improvement of performance along with entering into new market. The above mentioned strategies are essential and important through which the company can also enhance the overall performance and hold good marketing position globally (Issar, Cowan & Wegener, n.d.) 6. Conclusion From the above discussion it can stated that Parmalat is the leading diary company in Italy, which provides good quality dairy products along with other products to the customers according to their needs. The company also use good packaging system to provide better services to the customers and also to maintain the long-term relationship. The demand forecasting activity is helps the company to set the price of products and influence the customers to make the positive decision in terms of purchasing the products of Parmalat. From the above discussion it can also be analysed that the organizational structure of Parmalat SpA helps the company to attain the business goals by performing the work effectively. Parmalat SpA focuses on the effectiveness of supply chain of the company and also put additional effort for improvement of the organizational structure. By improving the production process and developing the new skills in relation to product development the company is able to attract the more customers and increase the sale of products in the market. The company also has several competitors in the market, which in turn has negative impact on the market position. As a leading company of dairy products it has various opportunities to improve the performance in future. The company has the great impact on international business because the members of the company maintain good collaboration with international as well as domestic trade unions, suppliers, retailers and distributors that in turn enhances performance in the long run. Furthermore, the company has the opportunity to increase the awareness of customers with the help of promotional activities such as advertising campaign. From the above discussion it can be concluded that the company should develop new and innovative skills along with implementation of advanced technology for maintaining the quality standard of dairy products and satisfying the demands of customers. Therefore, by achieving the demands of customers the company can attain sustainable development as well as long-term business growth. References BSR, 2010. Supply Chain Sustainability. A Practical Guide for Continuous Improvement, pp. 2-64. Fleisher, C. S. & Bensoussan, B. E., 2015. Business and Competitive Analysis: Effective Application of New and Classic Methods. FT Press. European Commission, 2009. Synopsis of Member States National Competition Authorities contributions on the Milk Supply Chain. Supply Chain. [Online] Available at: http://ec.europa.eu/agriculture/markets/milk/hlg/com4_milk_supply_chain_en.pdf [Accessed June 10, 2015]. Ghuman, K., 2010. Management: Concepts, Practice & Cases. Tata McGraw-Hill Education. Hoover’s Inc, 2015. Parmalat Canada Inc Competition. Top Competitors for Parmalat Canada Inc. [Online] Available at: http://www.hoovers.com/company-information/cs/competition.Parmalat_Canada_Inc.4c7e9780bb5aa5e1.html [Accessed June 10, 2015]. Issar, G., Cowan, R. T. & Wegener, M., No Date. Success Strategies Being Implemented In Fresh Milk Supply Chains. University of Queensland, pp. 2-11. Parmalat S.p.A., 2011. 2011 Annual Report on Corporate Governance. Annual Report. [Online] Available at: http://www.parmalat.com/attach/content/3635/Rel%20Governance%202011_Eng.pdf [Accessed June 10, 2015]. Parmalat, No Date. Code of Ethics. Policies. [Online] Available at: http://www.parmalat.com/en/corporate_governance/how_we_govern/policies/doc/Code_of_ethics_26_september_2006_ENG.pdf [Accessed June 10, 2015]. Parmalat, 2012. Code of Ethics. Scope of Implementation and Structure of the Code of Ethics. [Online] Available at: http://www.parmalat.com/attach/content/1097/Code%20of%20Ethics_Eng%20(1).pdf [Accessed June 10, 2015]. Parmalat, 2013. Parmalat Annual Report 2013. Report On Operations: The Global Dairy Market. [Online] Available at: http://www.parmalat.com/attach/content/4300/PARMALAT%20RELAZIONI%20E%20BILANCIO%202013%20ING.pdf [Accessed June 10, 2015]. Parmalat, 2014. Parmalat Annual Report 2014. Annual Report. [Online] Available at: http://www.parmalat.com/attach/content/4651/Parmalat_ENG_web.pdf [Accessed June 10, 2015]. Parmalat, 2015. 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