Bauhinia Case Study Five Forces Analysis Dairy Frozen Meat Industries
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This is one of the case study from course CB4303 Strategy & Policy at City University of Hong Kong. We analyzed Bauhinia Dairy's competitive forces by Porter 5 forces. In question 2, we indicated 3 major trends in dairy processing industry. And in last question, we use balanced scorecard to determine appropriate performance objective for each perspective and explain the relationships between them.
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Bauhinia Case Study Five Forces Analysis Dairy Frozen Meat Industries
- 2. Question 1. Discuss the competitive forces in the dairy processing industry. Identify the other industry that Bauhinia has entered and highlight the key differences in the competitive forces between the two industries. Comment on their comparative attractiveness in Hong Kong.
- 3. Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Mission Vision Balanced Scorecard High Rivalry High Threat of Entry High Threat of Substitute Products Moderate Bargaining Power of Suppliers Low Bargaining Power of Customers • Keen competition • More & more foreign brands enter China market (2015中國的牛奶和乳製品市場, KPMG) • Capital-intensive Operations • Stricter regulation after 2008 Milk Scandal • Other alternatives (e.g. soy milk, oat milk.) • Lactose intolerance (~90% of Asian) • Raw milk is irreplaceable ingredient • Milk is perishable • Capitalization & intensification of production • Westernized life style • Demand for imported milk is high after 2008 Milk Scandal
- 4. Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Mission Vision Balanced Scorecard Key Differences Frozen Meat Industry: 1. The bargaining power of supplier is relatively high Bauhinia is just a distributor,have no livestock farms and retail store. 2. The rivalry of frozen meat industry is mainly based on price-competition. Less differentiation is required. 3. Buyers has lower bargaining power. Antelope,ostrich and kangaroo,are high-value product.
- 5. Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Mission Vision Balanced Scorecard Profitability Antelope, ostrich and kangaroo are high-value products which generates higher profit margins. Market Demand Smaller size of customer demand. Inventory Management Dairy products are easily perishable while frozen meat can be kept for a longer period of time
- 6. Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Mission Vision Balanced Scorecard Trend3: Trend2: Trend 1: Increasing Demand for Health Food • Aging population • Demand for food without man-made addictive and artificial flavors • Less sugar, high calcium, skim milk, etc.
- 7. Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Mission Vision Balanced Scorecard Trend3: Trend 2: Increasing Concern of Corporate Social Responsibility • People concern about the issue of animal welfare and environmental sustainability • Promote green practices • Positive brand image Trend1:
- 8. Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Mission Vision Balanced Scorecard Trend 3: Growing demand for high quality and imported products in China • Public awareness of food safety in China increases • Willing to pay higher price for the imported brands that have good reputation Trend1: Trend2:
- 9. Vision Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Vision Mission Balanced Scorecard Our vision is to bring best quality product into our customers’ daily lives, through constant product innovation, seamless collaboration with regional and international allies, and commitment to create dynamic and cohesive working environment that can inspire employees to implement innovation.
- 10. Mission Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Vision Mission Balanced Scorecard • To maintain and constantly improve the quality of our products for the sake of customers’ health
- 11. Q1. Five Forces Analysis Differences Comparative Attractiveness Q2. Trend 1 Trend 2 Trend 3 Q3. Mission Vision Balanced Scorecard Learning & Growth Perspective Balanced Scorecard Business Process Perspective Customer Perspective Financial Perspective • Upgrade of information system (ERP, CRM, SCM, etc.) • Shorten production lead time • Higher Customer Satisfaction • Higher sales volume or lower production costs
- 12. References • http://www.foodbusinessnews.net/articles/news_home/Consumer_T rends/2015/04/Beyond_milk_Dairy_ingredient_t.aspx?ID=%7B3E3D7 B2F-EBBF-43DE-88B6-D4AECE0687D5%7D&cck=1 • KPMG (2015). 2015中國的牛奶和乳製品市場，page 1, 3, 7, 11 • http://www.customs.gov.hk/en/whats_new/API/ • http://www.bloomberg.com/news/articles/2015-03-07/chinese- governor-asks-people-not-to-buy-milk-powder-in-hong-kong- i6ywg2sc • http://www.foodnavigator-usa.com/Markets/What-are-the-hottest- dairy-trends-companies-to-watch-in-2015