Swot Analysis Of Fonterra 's Decision Essay

1057 Words Jun 16th, 2015 5 Pages
SWOT analysis of Fonterra’s decision to choose to do a joint venture with Beingmate:
• Creation of synergy
• Consistent supply and Distribution channel for a high value product
• Spreading of costs and risks
• Collective vision Weakness:
• Control over the venture
• Reliability of Beingmate
• Politics
• Entry into large foreign markets
• Fully integrated supply chain
• Foreign capital Threats:
• Pressure lobby groups & Extremists

A joint venture combines two or more company’s strengths and resources which “create synergy” (Paul, 2007). In this case it will allow both firms to “specialize in their area of expertise” (Paul, 2007) therefore allowing both firms to increase their individual profit by benefiting from each other’s expertise in certain areas. Fonterra can specialize in the collection of the milk and manufacturing process of turning the milk into “high quality infant formula” (Fonterra, 2014). Then Beingmate can then specialize in the distribution of the “high quality infant formula” (Fonterra, 2014) throughout China.
The joint venture will create a constant high quality supply and distribution channel for a “high quality infant formula” (Fonterra, 2014) First the factory in Durnum Australia produces “300MT of high quality formula per day” (Wilson, Spierings, Paravicini, & Leyland, 2014) Then this is taken from the factory in Australia to China by ship and distributed to all the Beingmate outlet stores. From the stores they…

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