3. • Part of the UK savoury industry which consists of the “retail
sale of processed snacks, potato chips, nuts & seeds,
popcorn and other savoury snacks” (Marketline, 2012b).
• The company grows their own potatoes what enables them
to deliver the very freshest, natural crisps to the market
(Potato Pro, 2013).
• The company received “over 50 awards for both taste and
quality from their home in England, as well as
internationally” (Food Specialized Trading Company, 2013).
4. • Founded in 2002 by Will Chase.
• In 2008 a majority of the company was sold to
a private equity firm Langholm Capital for £30
million (Potato Pro, 2013).
• Currently four directors.
• In 2012 the number of employees increased
to 138.
5. Polish Economy and Opportunities
• Perceived to be a political and geographical
border between Western and Eastern Europe.
• Potential opportunity to expand business to
other Western and Eastern Europe countries.
6. Polish Economy and Opportunities
“From the four most advanced countries in
Eastern Europe : Poland, Hungary, the Czech
Republic and Slovakia, Poland had the largest
percentage of private sector business, as well as
a strong consumer market”
(The Times, undated)
10. Introduction to the Polish Market
• Tyrrells will enter the potato crisps market which is part of the
savoury snacks industry.
• Savoury snacks industry has seen a trend of increase and it is
expected to continue for at least another three years.
• The potato crisps market is the largest and most successful
segment of this industry (Marketline, 2012b).
11. The Polish Competition
• The market is dominated by large international companies
• Frito Lay Poland (Lays) which is part of the PepsiCo chain
would be the main competitor as it holds 44% of the Polish
savoury market.
• Primary data collection was concluded: A questionnaire
through Facebook and personal communication with sample
size: 112 Polish citizens.
• Results show that there is demand for traditional Polish
flavours on potato crisps.
12. The Marketing Mix
The marketing strategy for Tyrrell’s can be developed by using
the ‘Marketing Mix’ which “includes any and all elements that
may potentially satisfy the consumer and over which the firm has
some level of control” (Brown, 1991).
It is made by four elements:
13. Product
• Tyrrell’s (UK) offers more than 15 flavours.
• Shaped by a mix of regular flavours such as ‘Sea salt and
vinegar’ and ‘Beach barbeque’, but it also includes other
seasonings which are specifically tailored for the British
market including ‘Sunday best roast chicken’ and ‘English
summer barbeque’.
• Competitors are introducing traditional Polish seasonings.
• Tyrrell’s Poland will follow this concept to minimise failure in
the market.
• Results from primary data indicate the demand for traditional
tastes.
14. Product
• Primary research revealed that there is a demand for
traditional flavours crisps, including ‘Bean salad’, ‘Noodles and
cheese’, ‘Polish sausage (Kabanos)’ and ‘Hunter’s stew
(Bigos)’.
• At the beginning, Tyrrell’s Poland would only focus on potato
crisps production in order to gain the brand awareness and
minimise the primary investments.
• In the future, the company would enter Polish popcorn and
nuts market in the future as they have a fair share of the
industry and Tyrrell’s (UK) has such products apart from the
high quality potato chips.
15. Price
• In the UK, Tyrrell’s sells their products at a higher price compared to
its direct competitors
• Therefore, when buying Tyrrell’s crisps, customers pay a premium
price in comparison to its rivals. However, the quality of the
product is higher and the range of flavours is wider.
• In Poland, the price standard is similar to the UK when the currency
is exchanged
• Therefore, the pricing strategy for Tyrrell’s Poland may not
necessary change.
• But, as the new kid on the block, Tyrrell’s Poland would be priced
below UK prices in order to make them more appealing to Polish
consumers.
16. Promotion
• In the UK, Tyrrell’s is actively involved in
various food festivals as part of their promotional
strategy.
• Very strong promotional tool as it shows the values of the
company.
• The same promotional strategy should be used when entering
the Polish market.
• This would increase the company’s brand awareness and the
presence in the word of mouth across Polish people.
• This vital when entering a new market as the consumers and
supermarkets will have to be persuaded to introduce Tyrrell’s
products.
18. Isomorphism
• “Degree of similarity in organisational practice
produced by pressures to conform” (Marchington and
Wilkinson, 2005:23).
• Four main types of isomorphism :
Local
Cross-national
Corporate
Global
19. Isomorphism
• HRM is the most sensitive to local context and many
MNCs aim toward higher level of integration of HRM
practices, while attempting to gain the benefits of
responsiveness to the local culture, legislation and
traditions (Brewster and Suutari, 2005:6).
• Beneficial for Tyrrell’s to adopt a local isomorphic
approach as this would allow the company to behave
in similar ways as other organisations operating in the
host country.
20. Centralisation versus Decentralisation
of Control
• Centralisation - the ability to deploy similar organisational
practices worldwide (Brewster and Bennett, 2010).
• Adoption of this system would result in Tyrrell’s keeping control
of operations at headquarters.
21. Centralisation versus Decentralisation
of Control
• Decentralisation - concentrates on the need to fit HRM
practices to local conditions (Delery and Doty, 1996 cited in
Brewster and Bennett, 2010).
• This approach would result in Tyrrell’s complying to local HRM
practices including labour markets and legislation, as well as
allowing the subsidiary to take control of their own operations.
22. Mixed Approach
“For an international company to be successful, is
should have the capacity to coordinate its
employees to achieve the same goals through one
global culture, as well as having the ability to be
responsive to local customs and markets”
(Hetrick, 2002:333)
23. Mixed Approach – British Managers
• Assign British managers to Poland in order to learn from
Cadbury’s example and ensure that the operations are
implemented as desired.
• Cadburys decided to identify local candidates but experienced
the local skills shortage in Finance and Marketing functions. As
a result, decided to “have a fair amount of expatriate
involvement, particularly in the early stages of getting the
Polish business operational” (The Times, undated).
24. Mixed Approach – Polish Employees
• In order to ensure long-term success and growth for Tyrrell’s, it
is essential that a level of control and responsibility is delegated
to the foreign subsidiary as well, including Polish managers, in
line with the chosen local isomorphic approach.
• This would also give Polish individuals a sense of freedom to
manage their businesses according to local needs.
25. Resourcing
“Getting staffing decisions right, whether at local
or global level, is important because poor staffing
decisions have big downsides including the cost of
re-recruiting and the cost of managing poor
performers”
(Crawley et al., 2013:125)
26. Strategies For Staffing
Perlmutter, 1969 (cited in Hetrick, 2012) identified three key
strategies for staffing policy in an international context:
Ethnocentric approach - reflects domination of subsidiaries
through hierarchy and decision making (personal centralized
control).
Polycentric strategy - allows local managers who ran the
subsidiary units to have greater levels of decision-making
powers and authority.
Geocentric approach - puts parent and host countries on an
equal position, hiring the best person for the post, without
preferences to host or parent country.
27. Strategies for Staffing
• Decided to use a mix of ethnocentric and polycentric staffing
models when first initialising operations in Poland.
• Assign higher level positions to British managers.
• Employ lower level management and production line
employees from Poland.
28. Performance Management
• The expatriates may face complex and difficult challenges,
leading to a ‘culture shock’ :
“A multifaceted experience resulting from
numerous stressors occurring in contact with a
different culture”
(Winkelman, 1994:121).
29. Performance Management
• In order to overcome this potential threat, Tyrrell’s will ensure
that the following variables of possible candidates will be
considered (Tung, 1981, cited in Reiche and Harzing, 2009:26-
27):
technical competence on the job
personal traits or relational abilities
ability to cope with environmental variables
family situation
• Also, potential candidates will receive the appropriate training
on the Polish culture as well as counseling and support whilst
abroad.
30. Reward
• The term ‘reward’ is generally understood to cover all financial
provisions made to employees including both cash pay and the
wider benefits package such as pensions and paid leave (CIPD,
2013).
• Tyrrell’s will introduce two forms of reward: expatriate and local
reward.
31. Local Reward
• Mid-level local managers paid according to market salary rates
initially.
• As time progresses in line with business success, local managers
will begin to takeover higher-level managerial roles, relieving
the financial constrain of paying UK managers.
• Production staff will also be paid in accordance with market
rates.
33. Production Location
• Five key factors when deciding a good location for a subsidiary:
customer accessibility, business environment conditions,
availability of resources, the entrepreneur’s personal
preference, and site availability and costs (Longenecker et al.,
2005:187).
• Desirable location would be the south-west of Poland.
• Meets several requirements such as being in a high population
area, close to amenities with good transport links as well as
being near retail outlets for the sale of the products.
34. Building Construction and Machinery
• Following the original concept of Tyrrell’s in the UK.
• Factory and vegetable produce on the same location.
• Walkers’ example: Implementing highly robotic production
line’s will be used.
• A suggested machine to for the production of savoury snacks is
the TLM-F44 which allows faster cycle times (Packaging
Gateway, 2013). However, in line with Tyrrell’s UK values, the
Polish branch will limit the machinery used for its production as
it is more focused on hand-cooked potato crisps.
35. Production Process
• Potatoes are fried in small batches in pure sunflower oil to give
delicious, crunchy, golden-yellow crisps (Noel Chadwick, 2013).
• Tyrrell’s Poland will use the batch production process
technique.
• This process allows Tyrrell’s to meet demand in certain flavours
of crisps whilst also maintaining the company ethos of using
fresh, local ingredients.
37. Supply Chain
• There are several elements that need to be considered when
setting up supplier relationships for Tyrrell’s Poland:
Potatoes (grown on-site).
Seasonings required for the crisps: Tyrrell’s will introduce
traditional Polish seasonings in order to satisfy local demand.
Flavours such as noodles with cheese will be classed as the
company’s USP.
Packaging: initially, Tyrrell’s would locate a local printing
company, but in case this is not possible, importing the
packaging from Tyrrell’s UK would be considered.
38. Delivery and Transportation
• Initially, 5 delivery vans would be purchased: second-hand Ford
Transit (Mobile, 2013).
• When a break-even point is reached: the company may expand
their vehicle fleet. If the customer base increases, covering a
larger demographic, then larger vehicles such as lorries can be
bought and used to transfer goods.
41. Cashflow Calculations
• CASH ON HAND: Tyrrell’s decided to invest £2 million into the
Polish subsidiary.
• INCOME (Cash Sales): Tyrrell’s decided to set their prices at
£1.70 per packet of crisps (150g). It is predicted to sell 5 million
packets in first year, therefore making the cash sales at £8.5
million.
42. Cashflow Calculations
• Tyrrell’s decided to employ two British Operations managers,
British Finance Manager and British Marketing Manager.
• Tyrrell’s decided to employ a lower level Operations Manager,
lower level Finance Assistant, lower level Marketing Assistant, 2
Human Resources Managers and 40 production line employees.
• All wages were calculated on the average salaries for both
countries based on specific positions.
43. Cashflow Calculations
• Other expenses include machinery, IT and Office Equipment,
Advertising, Vehicles, Land and Warehouse.
• All costs were calculated based on sample prices available
online (Schubert, 2013; TVN S.A., 2013; Mobile, 2013, Realigro Real Estate,
2013; Alibaba, 2013).
44. Cashflow Calculations
• Insurance expenses including vehicle insurance, personnel
insurance, public liability insurance, building and content
insurance; permits and inspection costs.
• Insurance costs were calculated based on the quotes received
online (Warta, 2013; Aviva, 2013a; Aviva, 2013b; Axa, 2013, Doing
Business, 2013).
45. Cashflow Calculations
Calculations show that, after deducting all the expenses between
April 2014 and March 2015, the cash position (bank balance) will
be over £8 million at the end of March 2015.
46. Conclusion
• The sections discussed show that there is a gap in the Polish
market for Tyrrell’s to enter.
• Tyrrell’s Poland would have to be very careful with its
Marketing, Finance, HRM and Operations strategies at the
beginning to enter and stay successful in the Polish potato
crisps market.
• In order to test the business effectiveness, at the start the
company would sell only a part of its product range with future
opportunities for further expansion.
47. Thank you for listening.
Do you have any questions?
POLS
KA
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Editor's Notes
Tyrrell’s Potato Crisps is a part of the UK savoury industry which consists of the “retail sale of processed snacks, potato chips, nuts & seeds, popcorn and other savoury snacks” (Marketline, 2012b). The company grows their own potatoes what enables them to deliver the very freshest crisps to the market (Potato Pro, 2013), providing high quality products to its customers. The company has received “over 50 awards for both taste and quality from their home in England, as well as internationally” (Food Specialized Trading Company, 2013). Their 100 per cent natural crisps are popular all over the world, resulting in sales over £13 million in the year to March 2008 (Potato Pro, 2013).
Tyrrell’s was founded in 2002 by Will Chase, and in April 2008 he sold a majority of the company to a private equity firm Langholm Capital for £30 million (Potato Pro, 2013). Currently, there are four directors at the company: David Richard Milner, Oliver Quentin James Wyncoll, Steven Derek Esom, Joanne Jennifer Jones and Sharon Gardner. There is also a secretary working for Tyrrell’s - Joanne Jennifer Jones. In 2011, the company employed 106 workers in total and in 2012 this number increased to 138 employees (Company Check, 2013).
Tyrrell’s decided to expand their business to Poland because this country is perceived to be a political and geographical border between Western and Eastern Europe (key facts about Poland can be found in Appendix A). This brings a potential opportunity to expand business to other Western and Eastern Europe countries in terms of a good location. Since the fall of the communist, Poland had made tremendous progress in deepening linkages with the world economy. Today, Poland is one of the most favoured countries for stating business operations in Eastern Europe as ‘the four most advanced countries within this group were Poland, Hungary, the Czech Republic and Slovakia, of which Poland had the largest percentage of private sector business, as well as a strong consumer market” (The Times, undated).
Additionally, referring to Business Monitor (2012) the potential weakness and threat for foreign direct investment in Poland (Figure 1) includes only a need for better infrastructure and potential skill shortage, suggesting that the Polish market is still attractive to enter. Also, Marketline’s (2012a, Appendix B) PESTLE Analysis looks very promising for Tyrrell’s to expand their business to Poland as it is very similar to the British situation.