This case study tells us about the Emmi Group, largest milk processor and leading producer of dairy products in Switzerland. Headquartered in the central Swiss city of Lucerne. It has around 5000 employees in all around the world and their global revenues are around 5billion Swiss Francs. It was founded in 1907 when they formed one company from almost 60 local cooperatives and started producing cheese and yoghurt under the marketing name “Emmi”. Emmi’s main markets are Germany, Italy, Austria, the UK, the Benelux countries and US.
With its fresh range of products the company primarily focuses on lifestyle, convenience and healthy products. Customers are retail businesses, the food sector and the food industry. Strategy development can be done after 3 workshop meetings in one year. These meeting are held in the period from January to late summer so there is a gap between meeting that lets them to have more time for their actions. In September 2007 Emmi decided to change its CEO, Urs Riedener.
He had held several positions in the Swiss food industry and recently been head of Migros, Switzerlands largest retailer. But later on in December the company faced with a profit warning: the prices of milk and other raw materials had increased and it can affect the growth of the company. In March initiated thorough strategic review process to deal with this problem. After looking at the financial documents of the company he knows that an established strategic review process it’s the company’s future success.
Before growing internationally the company decided to grow around Switzerland first and they decided to invest in new products and marketing campaigns. In 2006 with success they acquired their first production site outside Switzerland in Italy. They are aiming to achieve 10-15% growth in revenue per year by creating new distribution opportunities for its products and “the future goal of achieving foreign sales equivalent to that of the Swiss sales”. Going global gave them the opportunity to acquire some more companies.
They are in Spain, US, UK and etc. To sustain acquisition emphasis and intense cost competition Urs Riedener managed to make the company’s operations maximally efficient. Also with the help of government, they provided subsidiary help which will help the company in the international competitiveness. Later on he implemented the strategy plan and it consists of 3 initiatives: 1) Defending the home market initiative: strengthening premium brands, increasing the customer loyalty, competing in the higher-margin segments.
2) International expansion Initiative: expanding to their main target markets 3) Cost Management Initiative: using the KAIZEN approach to reduce the cost And in early 2012 during the meeting, Urs presented with the thank you speech to everyone for their efforts in implementing the strategy and other achievements that were succeeded as well. Later in Speech he mentioned about the development of Swiss Franc against Euro and Emmi might face with some challenges that can bring to currency fluctuation. After the management meeting, Urs and Lars sit down together again.
Urs is curious to know what Lars would have done differently with regard to implementing the 2008 strategic plan and how he would have set up the new strategic initiatives. I would totally agree with Urs and his strategy that he and his team has developed. It’s better to establish in your home country first and looking at the financial documents they are doing quite well. And at one time looking for international companies to associate with them for expanding the business. With the help of KAIZEN they strengthened their brand in Europe which means in the domestic market.
In order to earn more profit the company should have concentrate on producing 3 main products: Cheese, fresh dairy products and powder milk which will give them around 86% of net sales. In our century I would use this strategy to most of the companies as being costly efficient with high level of success taking into consideration the plans of the company. In conclusion to the case study I would like to say that Emmi achieved their goals in strengthening the domestic market and expanded with big success but to attract more investors they should sustain in asset purchasing and work on premium products.
Courtney from Study Moose
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