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Business Strategy Kerry Group Essay

In 1972 Kerry Group started its operation in Listowel, Co. Kerry. In 1974 Kerry Group has been formally established as Kerry Cooperative Creameries Limited in County Kerry, Ireland. The company grew in less than 30 years from this small provincial dairy for one of the world leaders in specialty food ingredients producers and distributors.

During the 1970s, the company expanded to include a large number of dairy farms and processing plants in the counties of Cork, Killarney, Galway and Limerick. Between 1979 and 1985, Kerry has built a lot of confidence in their abilities and technologies. During the 1980s the business strategy of the organization was based on organic growth with a focus on diversification. With that Kerry began branching out from its core dairy products in other categories of food. The company had its growth through acquisitions including a number of manufacturing facilities and other food processing, located throughout Ireland and Northern Ireland.

In 1986 with Denis Brosnan as chief executive, the cooperative decided to become a full-fledged company, listing its shares on the Irish Stock Exchange. The newly public company reported strong growth after its first full year of operations, with revenues nearing IR£ 300 million, and net profits of nearly IR£ 6.3 million.

Before the end of the decade Brosnan managed to double the sales of the company maintaining its Expansion in Ireland with the acquisition of 1986 Snowcream Moate Dairies, and the formation of a division of convenience foods, bringing the company into this increasingly prominent market. Alongside this movement was the intensification of business Kerry special ingredients. At the same time, Kerry also established presence in the United States, the opening of a processing facility dairy product, Jackson, Wisconsin in 1987.

In the 1990s Kerry Group continued to expand its business into the UK from the acquisition of new businesses to the already existing portfolio company. Kerry’s acquisition drive continued into the late 1990s, bringing the company into France, Italy, Poland, Malaysia, Brazil.

Two important acquisitions highlighted Kerry’s expansion. The first came in 1994 when the company acquired the business of food processing DCA, bringing the company to a position outstanding among North America’s specialty ingredients producers. The DCA purchase also introduced it to the Australian and New Zealand markets.

The opportunity for renewed expansion came in February 1998, when the Kerry Group announced its agreement to purchase the food ingredients businesses of the U.K.’s Dalgety PLC. Kerry acquired Dalgety Food Ingredients’ plants in the United Kingdom and in Hungary and the Netherlands–new markets for Kerry well as plants in France, Italy, and Germany. The Dalgety acquisition firmly established Kerry as the top specialty ingredients producer in Europe, and one of the world’s leaders in its specific categories.

Kerry was now turning its attention to two new markets: the Far East and South America both markets represent a huge potential new customer, both for the company’s products and food brands, and products for their ingredients. Company’s initial forays into these markets include acquisitions of plants in Malaysia and Brazil, while the company predicted that these markets are reaching some 25 percent of the company’s revenue at the beginning of the next century.

Strategic Levels

According to Porter & Porter in Montgomery (1998) corporate strategy is the general plan for a diversified company, which has two levels of strategy: the strategy of the business unit (or competitive), and corporate strategy (or entire corporate group).

To Christensen in Fahey & Randall (1999), corporate strategy is one that is concerned with three major issues to be faced by the managers of the corporation:

1. The corporate scope: that complex business corporation should attend?

2. The relationship between its parts: on what basis the business units of the corporation should relate to each other?

3. Methods for managing the scope and relationships: that specific methods – acquisitions, strategic alliances, divestitures, and others – will be adopted to effect specific changes in corporate scope and relationships?


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