Strength Of Fonterra Co. 131k38

By applying SWOT analysis on Fonterra, we get to analyze the strength, weaknesses, opportunities and threats of this company. Fonterra has much strength in its company and one of them is the superior quality of their products. They have a reputation for the quality of their products and it is an advantage for Fonterra over its competitors. For this reason, Fonterra safeguards the quality of their products carefully, takes responsibility to maintain the trust of consumers. Fonterra has the commitment to satisfy their customer and consumer, produce safe and high quality products and full compliance to the exporting and importing country requirements and regulations. In addition, Fonterra‟s quality system ensures that all Fonterra owned business have a clear and consistent process to deliver high quality products and services to their customers. Besides that, Fonterra‟s highly trained production team ensures that all food meets and exceeds the quality and safety regulatory requirements. At Fonterra, they use only the best quality of milk and applies more than 55 years of formulation and manufacturing knowledge to produce products only of the best quality. They have a team of world leading scientists working together to develop new nutritional dairy solutions every day. Fonterra has an nonnegotiable regulations of quality, safety and integrity across all sites. Lastly, they have fully managed and controlled supply chain which means all products are easily traced, which is why they are trusted supplier with a solid reputation.

The second strength of Fonterra is their non-stop research and development to improve the quality of their products. Milk offers many possibilities for innovation and development. The 85 year old world leading Fonterra Research and Development Centre in New Zealand is the living proof of Fonterra‟s always improving quality products. The „Open Innovation‟ policy in Fonterra encourages the contribution of external partners to develop new products and technologies in the dairy field. Fonterra has research partnerships with dozens of top universities and research facilities around the world. Fonterra‟s „Nutrition and Health‟ policy states to only develop a portfolio of products that are beneficial to health and nutrition. The policy also states to identify and consider global health and nutrition trends to influence product formulations. Fonterra also research in nutritional science for the innovation of their products. Lastly, the policy also ensures that all claims are scientifically substantiated and not just blank claims. The third strength of Fonterra is they‟re responsible and ethical in business. Their focus is not on profit alone, but on the benefits of customers and consumers worldwide and quality of their products. Fonterra‟s products abide to the rules and policy strictly. Examples

of the policy of product composition are maintain dairy nutrient integrity at optimal levels, using minimum quantities of sugar and salt in all products, evaluate appropriate fat levels in all products and control the use of ingredients that affects health. Two of the important policy in the marketing practices are seeking from independent and reputable experts and ensure nutrition messages are an accurate assessment of scientific evidence.

The last strength of Fonterra is their incredible manufacturing efficiency and quality. At Fonterra‟s Canpac site, more than 300 different Fonterra products are branded and exported out every day. It is all achievable by using state-of-the-art blending facilities, can printing and assembly machines, component presses, can filling lines and sachet packing machines. At every manufacturing process, quality and consistency is carefully controlled along the way from printing tinplate and making cans to blending powders and packaging cans and sachets. At Canpac, there are about 24 production lines operated by 450 people and produces about 40 million cans and 50 million of sachets are filled every year. Canpac‟s superior achievement is recognized by the Lithographic Award by winning four consecutive years and also won the Supreme Award for quality and consistency.

The first weakness of Fonterra is weak in treating wastes which causes environmental issues. For example, through a press release Royal Forest and Bird Protection Society urges Fonterra to clean up its own wastes instead of dumping it into the Manawatu river. The society also insists that Fonterra should follow their environmental policy of “minimizing the impact of dairy on the environment”. Another good example on the environmental issues caused by Fonterra is the prosecution by Bay of Plenty Regional Council on Fonterra for allowing nitric acid and caustic cleaning agent from the Edgecumbe milk processing plant to spill into a storm water drain. These issues will taint Fonterra‟s good reputation and lose the s from consumers and eventually they will have negative effect on Fonterra‟s sales.

The second weakness of Fonterra is the poorly managed cleanliness of its facilities. On 3rd of August 2013, Fonterra has issued a global recall of up to 1,000 tonnes or dairy products including whey protein drinks, sports drinks, infant formula and other beverages. The countries affected included China, New Zealand, Australia, Thailand, Malaysia, Vietnam, Sri Lanka and Saudi Arabia. The products were tainted in May 2012 in Waikato factory. The company identified a potential quality problem in March when one of the products was tested positive for the bacteria Clostridium. On 31st of July, a strain of bacteria that can cause

Botulism. The Center for Disease Control defines botulism as a type of rare and sometimes fatal paralytic illness caused by a type of nerve toxin. These product recall cause Fonterra to suffer a huge amount of loss and also lost the confidence of the public on its products. The third weakness is the increasingly importance of China‟s market with its special emphasis on the infant formula. Surprisingly, China is the major importer of Fonterra‟s infant formula. This is because of Fonterra‟s reputable quality of infant formula and several cases of tainted infant formula by China‟s dairy companies. However, since 2008 there has been three major cases of health scares: Sanlu melamine scandal, DCD residues found in milk and the latest botulism case found in whey products. These health scares is seen as a serious threat to the lives of Chinese children. New Zealand‟s dairy product with its quality, clean and green image had been seriously compromised. (Barber. A, 2013).

The last weakness which is the most serious weakness in Fonterra is the weak handling of public relations by the management. The melamine scandal was not Fonterra‟s fault, but the last two issues of DCD residues and botulism case which suffered from inexplicable delays in fronting up and it there was a problem. (Barber. A, 2013).These delays tend to be swamped by the perception of a cover-up because the disclosure was delayed for four months. Besides that, the Chief Executive Theo Spierings flown post haste to Beijing to manage the Chinese fallout, which leaves managing director Gary Romano to handle the public relation situation. Eventually, Gary Romano resigns due to pressure from the Botulism issue. On top of all that, Fonterra‟s Chairman John Wilson has been conspicuous by his total silence on these issues which shows Fonterra‟s lack of public relation skills more.

REFERENCES : 1) Press release (9 August 2006). Fonterra should clean up its act | Scoop news. Fonterra should clean up its act. Retrieved 19 November 2013, from http://www.scoop.co.nz/stories/PO0608/S00087.htm 2) New Zealand Press Association. (Sep 27, 2010). Fonterra fined for acid in waterway | National - NZ herald news. In Fonterra fined for acid in waterway. Retrieved 19 November 2013, from http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10676480 3) "New Zealand botulism scare triggers mass global recall". New Zealand botulism scare triggers mass global recall | Fox News. Retrieved 19 November 2013, from

http://www.foxnews.com/health/2013/08/03/new-zealand-botulism-scare-triggers-globalrecall/

4) Allan Barber. (August 6 2013). Fonterra problem highlights danger of being a one trick pony| Barber's Meaty Issues. Fonterra problem highlights danger of being a one trick pony. Retrieved 19 November 2013, from http://allanbarber.wordpress.com/2013/08/06/fonterra-problem-highlights-danger-ofbeing-a-one-trick-pony/