This presentation is about "How to change the strategy for any organization"

1. Strategy Change Plan
(Arla)
Student Name: Jawad Iqbal Hashmi
MSC (IBM)

2. Company profile
Strategic option
Resources and capabilities of Arla plus(Courtiers running Arla)
SWOT
Financial performance of Arla(Denmark)
PEST
Main competitors
Critical success factors
Corporate level strategy
Business level strategy
Business actives of arla
Business development strategy
Porter’s five force
Strategic change plan(ansoff’s matrix)
Maker entry for expansion
Why Pakistan for expansion
Entry mode
Pakistan industries facts
PEST of Pakistan(hoffsted’s cultural dimensions)
Cross-cultural management issues
Agenda

3.  Established in: April 17, 2000
 Founded by: Merging of Arla, Sweden & MD Foods, Denmark
 Headquaters: Viby J, Aarhus, Denmark
 Chairman : Åke Hantoft,
 CEO:Peder Tuborgh
 Type: Agricultural cooperative(Dairy)
 Total revenue: 9.567 Billion (2016)
 Operates in: Denmark, Sweden, Germany, UK, Belgium, Luxembourg,
Netherlands, others (21 countries)
Company profile

4. 1. Arla Global - www.arla.com 18 United States - www.arlausa.com
2. Bangladesh - www.arlafoods.com.bd 19 Ελλάδα - www.arlafoods.gr
3. Canada - www.arlafoods.ca 20 Россия - www.arla.ru
4. Danmark - www.arla.dk 21 中国 - arla.com.cn
5. Deutschland - www.arlafoods.de
6. España - www.arlafoods.es
7. México - www.arla.mx
8. Middle East & Africa - mea.arla.com
9. Nederland - www.arla.nl
10. Nigeria - www.arla.ng
11. Norge - www.arla.no
12. Philippines - www.arla.ph
13. Polska - www.arla.pl
14. Suomi - www.arla.fi
15. Sverige - www.arla.se
16. Trinidad and Tobago - www.arla.tt
17. United Kingdom - www.arlafoods.co.uk
Arla in other
countries

5. Vision
Create the future of dairy
to bring health and
inspiration to the world
naturally.
Mission
To secure the highest value for
our farmers’ milk while creating
opportunities for their growth.
Identity
Healthy , Natural
,Responsible and Co-
operative growth
Corporate Responsibility
We want to grow our business. But we know that long-term success is only achieved if we are able to add value to
your life while acting responsibly towards the environment and the communities we’re a part of.

6. Competitive Advantage
 Strong brand name with global identity
 High Focus in Research and Development
 Continuing to innovate new organic products
with recruiting more organic farmers with
Committed to farmer for giving their milk high
value
Strategy
Capabilities
 adapting and collaborating in different
companies and regions.
 Innovative effort on quality and organic product
 Optimum extraction of milk volume through
capable dairy management system
Resources
Tangible
Milk volume of 13.9 billion KG and revenue of 9.6 billion Euro.
Fourth largest in farmers milk intake
Highly equipped and modern dairy farm for efficient production.
Production in 12 Countries and products sold over 100 countries
Intangible
Reputed and Well know global brand
Strong bond with supplier
Human
Nearly 19,000 employees.
Good relation with dairy farmers striving to giving their milk greater value
Skilled man power recruitment through different seminar and programs.

7. 8479
9870
10614 10262
9567
0
2000
4000
6000
8000
10000
12000
2012 2013 2014 2015 2016
Revenue in million
Financial Analysis:
Source: Annual Report, 2016

8. 255
300
320
295
356
0
50
100
150
200
250
300
350
400
2012 2013 2014 2015 2016
Net Profit in millions
Net Profit of Arla
Source: Annual Report, 2016

9. Arla’s Revenue by Market
UK
Sweden
Germany
Denmark
Netherland
Finland
Saudi Arabia
China
Belgium
USA
Other
0 500 1000 1500 2000 2500 3000
Market
Revenue (in million euros)
Source: Annual Report, 2016

10. Arla’s Revenue by product category
45%
26%
14%
15%
Milk, yoghurt, Powder and Cooking
(MYPC)
Cheese
Butter, Spreads and Margarine
(BSM)
Other
Source: Annual Report, 2016

11. Strategic Options?
Good growth
2020
We aim to
develop our
position as a
leading global
dairy company
For Farmer
Owners
Committed to
creating the
highest value for
their milk
For Customers
We want to be the
best partner for our
customers - in terms
of the development
of both our own and
their brands.
For The Planet
Acting responsibly
towards the
environment and
the communities
we’re a part of.
For Consumers
Product,
activities and
growth should
improve the lives
of people

12. Arla strategic brands:
Arla Dofino CastelloLurpak

13. Arla & Competitors

14. Good Growth is Corporate Identity of Arla?
Source: Aral Finanical Report, 2016

15. Segment Competitor C1 C2
Apetina Happy cow Puck
Yellow Cheese
Cream Cheese puck philadelphia
Arla Lactofree Almarai
Lurpak Nurpur Adam’s
Arla Baby and Me Lactogen Meiji
arla Buko (flavored
cheese)
Arla Cheasy Nestle Adams
Arla Organic Dayfresh
Arla® skyr
Arla Kærgården Blue band Adams
Arla Ko
Arla Köket
Arla Natura Achha Adam
Arla Protein
Arla Wellness
Arla Yoggi in Sweden
denmark
Nestle
Anchor
Castello
Bregott
Cocio Lacnor Nestle
Karolines Køkken
Kelda
Keso
Lätt och Lagom
MATILDE® CHOCOLATE
MILK
Lacnor Nestle
MILEX® - NUTRITIOUS
MILK POWDER
Nestle Everyday
Puck
Competitor
products in
Pakistan

16. Key
success
Factors
Low price
for good
quality
Brand
reputation
with good
quality
Strong R &
D and
responding
to change.
Large
variety of
dairy based
product
choices

17. Farmers
Consumers
Source: Arla Financial Report, 2016

18.  Our ability to turn consumer trends into assets
 Naturalness is at the core of our identity
 Ability to utilize our production capacity at existing
sites more efficiently,
 Good Growth, and being Farmer-owned is in our
DNA.
 Strong internal control within the organization .
 With our focus on healthy products and authenticity,
we build trust and credibility with consumers.
 We continuously work with product innovation to meet
consumers’ demands and we will drive initiatives for
the benefit of the commercial business, production
and owners.
 Increase accountability within the organization is a
key strength for us
Not properly handle financial risk like
exchange rate, interest rate change etc.
Weaken to handle business and legal risk
breach of human rights, ethics, or fraud
within Arla or on a supplier and partner level
Loss of key personnel in strategic positions
and recruiting and retaining the best talent
Digital and e-ecommerce is growing fastly
Digital trend potentially affecting the dairy
industry is mobile consumers requiring a new
operating model
Taxation and transfer pricing risks
Major cyber attack
Growing anti-dairy and vegan movements
Digital disruption and new competitors or
retailers
Demand for natural and healthy products, e-
commerce and other trends will guide our
business and brands towards 2020.
Care for animals and nature and the pride
taken in producing nutritious, high quality milk.
new categories, for example, within milk-based
beverages and high-protein products
s
W
O
T

19. Political
Most Stable Government in the World and has been
ranked 1st (in 2016 by forbes magazine) as most
open and accountable government in the world.
Denmark has evolved into a modern, prosperous
nation that is Participating in the general political and
economic integration of Europe. It joined NATO in
1949 and the EU 1973
Economical
Human Development Index is 0.923 which ranks
4th among 169 countries.
The country has one of the most equal level of
income distribution and the country itself is a high
income economy.
GDP growth of 1.1% in 2016 and expect growth to
1.6% in 2017
Ease of Doing Business rank is 3rd
De Denmark has its own currency – Danish
Kroner (DKK) 1 USD = 7 DKK
Social
Denmark has been an Urban Society since the end
of 19th Century
A complete welfare society
Egalitarianism in Danish Society
Women in Danish Society : Equal Pay, Flexible
Working Hours, Respected
Technological
In 2015, more than 90% Danish
Households were having Broadband
Enables computers.
Danish software engineers have taken
leading roles in some of the world’s
important programming languages
PEST
Analysis
(Denmark)

20. Political
Weak political
system.
Democratic system.
No consisty in
government
polices,
Economical
Net loss is
increasing
Tax payer Ratio is
very low.
Government has no
control on the price
of milk
High inflation rate.
High interest Rate.
Social
Face serious issue
specially in
education and
health.
High literacy rate.
Poverty is high .
high power distance.
High unemployment.
PEST Analysis for
Pakistan

21. Technological
New production
technology.
Increasing usage of
IT Technology.
ICT infrastructure in
Pakistan is good
but the problem is
high cost of using
these technologies
Environmental
Inefficient
environmental laws
and policies.
Serious issue of
environment
specially industrial
sector.
.
Legal
No proper
legislation for
import.
Low tax rate.

22. Why Pakistan?
The demand-supply gap, according to them, is going to increase to 3.6 billion liters by 2015.
Milk procurement is another issue which increase the demand because about 20 per cent of the total production
goes waste; a massive seven billion liters per year
Luck of proper mechanism, like insufficient value chain system
There is no tax or excise duty on milk products
Uneducated suppliers of raw materials, so it effects its quality.
UHT milk is a bit costly than the ordinary milk .
Price of competitive products like day milk is comparatively higher.
High custom duties on the import of packaging machinery Government initiatives regarding tax rebates
People are realizing the importance of pasteurized milk because of its safety and better health issues.
People prefer UHT on pasteurized milk because of small shelf life.
Demand of Dairy products is high in developing countries.
High potential market for dairy products.

23. Entry mode?
Contractual
Franchising
Product and Trade Name Franchising
Distribution system ( Producer ) Suppliers Dealer

24. Bargaining power of Suppliers
• Product substitution is not possible
• Supplier has more power to drive the price.
• Higher demand in urban area
Threat of Substitutes
Some of product are
venerable to be
substitute
Bargaining Power of Buyers
• Choices of brand are higher
• Daily life product
• Comparative price
• Higher priority to quality product
• Price sensitive
Threat of new Entrants
•Demand for dairy product
and gradual increasing
trend.
•Market emphasizing in
quality
•Difficult sustainable
production
•Difference in Tradition
towards dairy products.
Competitive Rivalry
•Strong brand identity.
High
Moderate
Moderate
HighLow

25. High Quality
Low Price
Low Quality
High Price
Product Positioning Map

26. Integrated cost
leadership/
Differentiation
Cost leadership
 High competitive price
 Low bargaining power of
supplier buyer,
 Threat of substitute is also
low like the use of Vegetable,
fruit, cereals.
 Control on overhead
 Cost, production cost.
 Efficient Facilities.
Differentiation
pasteurized dairy
product.
Nutritious value added
product.
Focused cost
leadership
•Elite class.
•Urban customers.
•38.8% of total population
live in Urban Area.
Focus Differentiation
Standardize product with high
features .
Longer self life products.
Narrow market
segmentation
Broad
Market
Lower Cost Distinctiveness
Target Market
Source: M, E. Porter, 1998. Competitive advantage: containing and sustain superior Performance, New York: The Free press
Source: Pakistan Bureau of statistics , :CIA World Factbook
Business Level
Strategy

27. • Organic dairy products which has high demand
with different categories and variety.valuable
• Automated dairy management system for high
quantity production of the milk from dairy farmers.Rare
• Requires the change in overall management
system which will cost high.
Costly to
Imitate
• By educating the dairy farmers about the milk production
optimization
• Using data as tool to control the quantity and quality of
the production
Organized to
capture value
VRIO Framework
Arla (Pakistan)

28. Strategic Change Plan (Ansoff Matrix)
Existing Product New Product
Existing market
Market penetration
 Competitive pricing as our
products as to compliment
high quality of our product.
 Easily accessible
Product development
 New product induction to suit the
local in Pakistan like introduction
of sugar free yoghurt, Lassi.
 Strong R&D to fulfill the trends
and demands
New Market
Market development
 Introduction of “Good Growth
2020”.
Diversification
 Introduction tasty dairy beverage
on the go like sparkling milk and
fruit drink, tea drink and energy
drink.

29. Hofstede Cultural Dimensions
Source: Greet-Hofstede.com

30. Hofstede Cultural Dimension
Promotional strategy should be targeted hierarchy
leader.
Focusing on Organic products, pasteurized dairy,
nutritious.
Our brand is well known over the world,
Promotions would be done according to the social
tolerance level.
Power Distance
Individualism
Uncertainty
Avoidance
Indulgence

31. Refernces:
 Dada D. (2006) E-government implementation is government project therefore funds will
also be provided by the government. The Electronic Journal on information Systems in
Developing Countries. Vol. (26): Issue 1, 1-10
 Quershi M. and K. Ali. (2010) Political Instability and Economic Development: Pakistan
Time-Series Analysis. International Research Journal of Finance and Econo
 S. QAMAR, S. JAN, L. HASAN I.A.MEMON (2012). E-Government in Pakistan: SWOT and
PEST Analysis.Sindh University Research Journal (Science Series). Vol.44 (4) 587-592
mics. Vol. (12).
 https://www.dawn.com/news/1239919 accessed on 9/04/2017
 Ehlers, E. and Kreutzmann, H., 2000. High mountain pastoralism in Northern Pakistan (No.
132). Franz Steiner Verlag.
 Barney, J. B. (1995). Looking Inside for Competitive Advantage. Academy of Management
Executive, Vol. 9, Issue 4, pp. 49-61

32. References:
 McDonald, M., 1996. Marketing Planning. John Wiley & Sons, Ltd.
 Accessed from: https://www.arla.com/ accessed on 11/04/2017
 Rothaermel, F. T. (2012). Strategic Management: Concepts and Cases. McGraw-
Hill/Irwin, p. 91
 http://country.eiu.com/denmark accessed on 8/04/2017
 http://www.marketresearchreports.com/countries/denmark accessed on
12/04/2017
 http://www.pbs.gov.pk/content/area-population-density-and-urbanrural-proportion
accessed on 13/04/2017
 https://tribune.com.pk/story/1126706/40-pakistanis-live-poverty/