Strategies Followed by McCain Foods - Case Study Example

QUESTION 1

Introduction

The current global environment presents several opportunities for organizations operating in multiple industries. The food production industry is among the industries that have experienced massive product and service diversification to cope with the current trends of globalization. McCain Foods is one such company that operates in over 130 countries globally, with an employee base of approximately 17,000 people spread around six continents ("About Us | McCain", 2016). Undoubtedly, this company epitomizes the image of a modern company in a rapidly growing industry characterized by dominant brand names, massive competition, and technological advancements.

Headquartered in Canada, McCain Foods is among the leading producers of potato chips (McCain: Bloomberg.com, 2016). Over the 60 years of its existence, this company has developed to cement its position at the helm of producing and supplying frozen potato chips to the world. The reputation that the company commands depicts the connection that the consumers have with the tasty food products by the company, further earning a trademark for the convenience that the restaurant chains have across the countries it operates.

McCain Foods Company has a definite organizational culture that is responsible for defining the vision and mission of the company ("McCain Foods Core Values and Code of Conduct", 2016). In as much as the company aims at maximizing its sales, a number of factors have come to define the company more than the financial records. The principles of ethical operations, coupled with corporate social responsibility have been at the center of the expansion strategy adopted by the company over the past two decades, which have witnessed the growth of the company into the both developed and emerging global markets.

Judging from the company’s vision statement “Good Food, Better Life”, one cannot fail to notice the consciousness of the business towards defining the processes that make the vision statement not only reasonable but also attainable. Therefore, the company’s management understands that the attainment of these objectives depends on a combination of factors mainly dictated by the prevailing internal and external environments. While the internal environment is solidly under the control of an organization, the external environment presents challenges that shape the performance of that organization (Gawron & Theuvsen, 2012). Therefore, this discussion studies the external environment of McCain Foods Company. Using the SLEPT analysis, the discussion will go further to look into the factors influencing the operations of the company from the external environment, and scrutinize the validity of the response by the company to such factors.

Strategy (or strategies) followed by McCain Foods

The main challenge encountered by the company is that related to the social component of the external environment. Herein, populations are raising alarm about the contribution of fast foods and junk to the prevalence of such diseases as obesity. The strategy employed by the company involves sensitization of the public on the factors that contribute to the prevalence of such conditions. Besides, the company protects its brand name through informing the public about the quality standards that define its products. These strategies, together with scientific measures to reduce the causative agents of obesity have been instrumental in maintaining the company’s position in the global food industry.

SLEPT Analysis

Social factors

The changing consumer preferences define the social factors that constitute the external environment (Vandevijvere & Swinburn, 2014). As the company diversifies into larger markets, it encounters different demographic characteristics, most of which are the youth. Therefore, the company tailors its marketing strategies to suit the demographic composition of the markets, as well as maintain the sensitivity of the health factors associated with the product line of the company.

Legal factors

The rapid expansion and success recorded by McCain Foods Company in multiple global markets depicts a phenomenon about the country’s link with the legal factors constituting the operations of the external environment. In each country that the company invests, a team of legal experts is consulted to ensure that the company sets standards that are commensurate to those stipulated by the host nation. The rapidly changing environment obligates food companies to label all their products as ways to enable the consumers make healthy food choices (Ethical Consumer, 2016).

Economic factors

The expansion of the company into new, wider, and diverse markets presents a set of economic factors to the external environment of this company. Consumers in different countries have varying preferences, a factor that distinguishes the pricing policies employed by food companies in different markets (Calvo-Porral, Stanton & Lévy-Mangin, 2016). Moreover, the expansion into developing countries has obligated the company to diversify its products as part of the larger goal to capture the majority low-income populations.

Political factors

The role of the government to promote health has taken a political approach with many legislators targeting fast food companies as the main contributors to the prevalence of lifestyle diseases. These factors have led to establishment of massive campaigns to discredit fast foods (Sorensen, 2012). To ascertain its position, the company supports such campaigns on the basis that it adheres to the ethical health considerations of the public.

Technological factors

Considering the fact that McCain Foods Company is the leading in production and supply of frozen potato products, the external environment has been instrumental in offering innovative technological solutions that have enabled the company to maintain this position. Through investing in research and development, the company has managed to develop products that have illustrated the commitment of the company to promoting innovation and technological advancements.

Major opportunities and threats presented by the external environment

The changing business environments present opportunities on which the company can capitalize. Therefore, the company should diversify its production to include products that are neither potato nor potato derivatives. This presents an opportunity for the company to introduce vegetable products, hence avert the risks of consumer apathy (Stankus, 2014). As mentioned, the threat of making losses is high, with the political and social awareness programs directed towards minimizing the consumption of fast foods. Therefore, these factors pose threats to the performance and existence of the company.

Based on this research, McCain should consider adjusting its strategy. This decision follows the rising prevalence of obesity in different markets in which it operates. The company, therefore, should adopt a strategy that depicts the reality behind the health and nutritional facts of its products. McCain Foods is responding effectively to the changes in the external environment judging from the success it records in each market. However, the company should consider taking an ethical approach towards addressing the claims of obesity as per the findings of healthcare providers.