Marmum dairy farms
Chapter 1: Growth, History and Development
Marmum Dairy Farms was established in 1982 and has from then on gone from strength to strength. Marmum Dairy Farm is now a subsidiary of Dubai Investments Industries which acquired it in 1996 and is now wholly owned by Dubai Investments. It is the first HACCP-certified dairy in the UAE and has now become one of the nation’s largest dairy farms with an annual production of over 20 million liters. Marmum has diversified into other dairy products other than milk such as creams and yoghurts, along with non-dairy products like juices.
Marmum has an established headquarters in Dubai. It started off with only milk products and has since then diversified into juices. It had started off as a small-time dairy, and after its acquisition by Dubai Investments has kept on expanding to supply the ever-growing demand of milk in the UAE.
Marmum has been adapting to the changing market demands and growing its existing customer base by introducing innovative concepts and products. Lisailly, 30km from Dubai on the Al-Ain houses the state-of-the-art farm that now supplies many of the UAE households with milk.
It has constantly, over the past few years, imported Heifer cows from Australia. It recently bought 300 high-quality heifer cows in 2007 which increased its annual milk production by around 2.7 million liters, and then in 2009 when it bought 175 cows of the same variety and increasing their milk production by around 1.8 million liters. It owns a total of over 3500 cows, out of which around 2000 cows are of the milch variety. This move was brought on after rising commodity prices forced Marmum to purchase cows with high average milk production to offset feeding costs.
Apart from importation, Marmum had launched a breeding program to breed cows locally which are highly-resistant to diseases, and have a good average annual milk production. This move came in view of the fact that durability of the cows is more important than their cost. Raju, the general manager of Marmum Dairy Farms, said that these cows were physically and genetically superior with high milk production and low maintenance. Such cows are now being produced rapidly at their stronghold. These cows are also impervious to temperature changes, as they have been bred locally. Such a move also decreases the cost of keeping these cows in good climatic conditions, which are necessary for optimum milk production among these cows.
Marmum apart from increasing their annual milk production, is also strengthening its image in the market. Goodwill gestures like supporting the Ministry of Social Affairs in helping the disabled and backing the UAE census board in implementing Tedad logo has done wonders for its image.
In September 2009, Marmum Dairy, a subsidiary of Dubai Investments (DI) joined hands with the Ministry of Social Affairs in the Ministry’s Be My Friend campaign. This campaign was started with an aim to facilitate the inclusion of the disabled children into the world at large, by integrating them into the mainstream schools. The Ministry hopes to change the way these children are looked upon, and how they look upon the world. The current environment of indifference is hoped to be replaced by a more positive attitude of trust, sympathy and approval.
Not only this, Marmum partnered with UAE census in 2005 by supporting the Tedad logo implementation scheme. This event was the first ever nationwide initiative of its kind – aimed at providing the best and most efficient services to all the citizens by analyzing and syncing the demographics of the country. As part of the partnership, all two-litre Marmum fresh milk and juice bottles carried the specially designed ‘Tedad’ (Census) logo during the Census campaign between September and December 2005. Approximately 350,000 Marmum fresh milk and juice bottles were distributed in the UAE every month with the Tedad logo.
Chapter 2: Marmum’s strengths and weaknesses
Marmum enjoys a great reputation in the country due to its customer-centric approach. Combined with its policy of helping the nation at various junctures (like the UAE census), and its dedication to food standards, Marmum Dairy Farms has been in the eye of the consumers for a long time. Its expertise in keeping its customers happy has led to it being one of the largest dairy farms in UAE. The quality of their milk is almost unparalleled and only a few companies like Al-Rawabi Dairy, Al Ain Dairy and Digdaga Dairy are able to match the high quality of Marmum’s high quality of milk. Hence its customer satisfaction is unparalleled in various aspects.
Marmum also boasts of a huge milk volume production. With more than 20 million liters of milk produced annually, Marmum Dairy Farms holds the 3rd position in the dairy industry with more to come. Its high-quality cows ensure maximum milk production at minimal cost of maintenance of these cows. This helps it in maximizing its profits and provides for more capital to invest in the coming years. Its locally bred cows are extremely resilient to any changes in the environment and have a better lactating span than the average cow, which again translates into great investment for the dairy company.
Despite, its many strengths though, Al Marmum faces stiff competition from other dairy farms like Al Rawabi and Al Ain which hold a larger share in the dairy market industry. These companies stifle the growth of Al Marmum and limit its expansion plans. For though it has around 2500 retail outlets across the country, its milk sales are considerably lesser than those these two dairy farms. This is mainly due its weakness of having lesser milk producing cows. With only 3500 cows compared to more than 5000 cows of these two dairy farms, Al Marmum needs to outgrow its competition fast.
It also needs the support of its retailers in huge dollops. The company’s general manager Raju, himself has remarked on occasion that “Retailers too must support dairy products to bring down the overall cost.”
Chapter 3: Macro environment
The macro environmental analysis is one of the major part of the Environmental Analysis. Here the industry in question is Marmum Dairy Farm so the discussion will the about the macro environment analysis of Marmum Dairy Farm. The macro environment of an industry includes all the possible factors that influence the organization of that industry but are not in its hands and generally are out of its direct control. That means the company cannot possibly do much about it. Though the micro environment generally analysis and examines the general business climate and environment as it relates to the organization within its industry. The market is continuously changing and the company should and must be able to adapt to the changing environment and market. This could be about the huge competition which the company faces and also the rivalries in the market. Companies a lot of times have a threat of substitute products as well as new entrants in the market because of the trend towards globalization. The need for compensation and adapting the changes increases with the environment getting wider. These changes could be political, economical, cultural as well as technological.
For Marmum Dairy Farm the Cultural changes account for its people’s core beliefs or values. They think that it’s how their employees view themselves, others, organizations, society, nature, and the universe all play a part in shaping one’s culture. The company need to and does take these factors into consideration when in the market.
The Political environment of Marmum Dairy Farm is pretty clean. There are almost no laws or rules and policies by the government which limits or puts bar on the working of the company. The UAE government is ensured of the policies and working or Marmum Dairy Farm and is doing well for the society and ensuring a fair market. Government support for the dairy industry in UAE is vital.
There are not many Economic factors which have influenced consumer purchasing power. The general manager of Marmum Dairy Farm, S R K Raju says that “production expenses are on the up as commodity prices have raised in the last couple of years”. It was important for Marmum Dairy Farm to watch trends in the prevailing economy to prevent and lessen the losses in profits and be at the top of the market.
New technology widens the horizons and creates new markets and new opportunities for the company’s business. It is always important for businesses, to stay on the top with new technology. Recently, Marmum Dairy has imported 175 high-quality heifers from Australia, which brought its total herd strength to as high as 3,500, out of which 2000 are milch cows. The new import from Australia is expected to increase the company’s annual milk production by 1.8 million liters, which is very good. Organizations that do not stay up to date with new technologies and upgrades will soon find their products and services out of date. They would definitely miss all the great opportunities and the new markets that the new technology eventually brings. (MPS.com)
The micro environment is also known as Porter’s Five Forces of Competition.
Coming to the Porters Five Forces of Competition which is a major part of a company’s macro environment is primarily concerned with main issues and forthcoming changes in the environment. This environmental analysis looks at five points of interest, which are 1) Power of the Buyers; 2) Power of the Suppliers; 3) Threat of Substitute Products; 4) Threat of New Entrants; and 5) Intensity of Rivalry.
Discussing about the Power of Buyers, we see that it is very low in case of Marmum Dairy farm. The buyers don’t have many choices due to the market monopoly. Its demand is ever increasing and frequent. Also the purchases cannot be postponed. The Power of Suppliers is also very low because of a lot of suppliers and outlets. The Threat of Substitute products is medium as most of the dairy products here are unique and there is not much competition. And finally the Threat of New Entrants is also very low in the case of Marmum Dairy Farm. (MGMT)
Chapter 4: SWOT Analysis
As we have already discussed the strengths and weaknesses of Marmum Dairy Farm in the above chapters, the company has a lot of strengths and it clearly trumps many of its weaknesses. Also the opportunities overpower the threats faces by the company. The company overall is in a very competitive position and the existing competition for the company in the milk products field is not much to be worried about. The monopoly in the field is pretty evident. Marmum Dairy farm can easily continue to pursue its business without any fear of losses and future problems. The corporate level strategy of the company makes it a total profit venture.
To turn it’s weaknesses into strengths: although there company already has a huge infrastructure but purchasing more number of cows and increasing the total annual milk production will be profitable and will it easy for the company to meet the ever growing demand. There is no major threat faced but increasing the number of retail outlets would always be good as the suppliers do not enjoy good support from the company. New functional changes for Marmum Dairy Farm were to start producing juices and other fresh fruit products. It’s business and corporate strategy has always been very good to increase the profit at all times.
Chapter 5: Corporate-Level Strategy
In the analysis of the corporate level company strategies, we first have to look out and define some of the important aspects of strategies the company’s chief missions and proposed goals. The company’s everlasting corporate strategies that will surely and mostly include factors like its streak of business, the nature of its acquisitions and subsidiaries, to analyze the importance of the relationship amongst the company’s various businesses, whether they trade and/or barter resources, the gains that they have estimated to be achieve from synergies, whether the company has a running investments as a portfolio, defining corporate strategies that whether the company is or is not pursuing, things like its decisions to be related or unrelated, and its decision to uphold diversification or not or take it as a combination of both also to conclude whether this company’s works in just a single nucleus business or does it has multiple businesses. Well, being clear with company’s mission and future goals, Marmum’s aspires to be converted into the largest and as a No.1 in all the dairy brands in the gulf and UAE, also by intensifying our variety of dairy goods and the fruit juices we get the idea that we can seek to capture a very large part of the domestic marketplace in the ahead future.
The Strategic formulation of this company is a amalgamation of majorly three chief processes that are namely, self-evaluation, Performing the circumstantial analysis, and the competitor’s analysis which are to be both internal and external in nature; and both of them micro environmental as well as macro environmental in nature. To synchronize with this assessment of our, our objectives are very clearly laid down. All of these objectives must be equivalent to the time-line of the course; while some can be in a short-term while the others should be on a long-term basis. This will involve our crafting vision statements which is a stretched term outlook of the potential future, the mission statements and the job which the association will give itself to the society, the general corporate objectives being both in the fields of finance as well as in the field of strategies, and the strategic business element objectives also being both in the fields of finance as well as in the field of strategies, and even in various tactical objectives. All These objectives must be, in the radiance of this situation analysis.
The Process management is used as a primary technique for the product value management with some of the method from the customer examination management. Well, it looks through the activity moreover as a chronological process. And the purpose is to discover inefficiencies and also to create the processes even more efficient. Although these events have very long history, which must be dating back to the era of Taylorism, and the capacity of their vast applicability has been significantly widen, with parting no feature of this firm liberated from possible procedure improvements. As Because of this wide applicability of the progression management technique, all of them can be worn as a foundation for bloodthirsty advantage.
Chapter 6: Business-Level Strategy
While having the knowledge of the company’s strategy at corporate-level and having done with the SWOT analysis, we are on the next step that is to recognize this company’s strategy at business-level. Marmum as a company is a single-business brand, its strategy at the business-level are indistinguishable to its strategies at the corporate-level. Identifying the company’s major generic and competitive strategies which are namely low-cost, differentiation and its strategy of investments plays a major role, while given that its comparative competitive situation and the phase of its life cycle, the company is also exposing different products using disparate strategies while at business-level. Like for example, they may tender a low-cost manufactured goods range with a line of differentiated merchandise. While being sure that to provide a complete account of the company’s strategy at business-level so that to show how it competes with other company’s business strategies.
While Identifying the serviceable strategies that is pursued by the company to build a competitive advantage over the other companies through its superiority, quality, efficiency innovation, and the customer responsiveness is also achieved at its high level business strategy which is very significant. The information on the company’s functional competencies must have been provided you by the SWOT analysis. Examination has been done on the research, production, marketing, and development strategies as to further expand the image of where this company is possibly going to. Like for example, while pursuing the differentiation strategy or the low-cost strategies successfully it requires extremely dissimilar sets in competencies. And while this company can pursue both the differentiation strategy and the low-cost simultaneously, the company senses deep risk before adequate research has been done, for the same reason the company hasn’t yet been able to pursue both of them simultaneously. Yet, it is especially significant to see the SWOT analysis at this point of time, as if the industrial analysis, and predominantly Porter’s model, that has been revealing numerous coercion to the company from the predominant environment. But still I can see the company can still deal with these threats although the company needs to change its business-level strategy to defy all the threats. I recommend adding an extra level of the strategy by the name operational strategy that was first encouraged by Peter Ducker in the references in the theory for M.B.O. (management by objectives). It’s much tapered in spotlight and always deals with the day-to-day equipped activities like scheduling criteria. While it must operate within the financial plan but it is not in the independence to change or generate the budget. As the strategy at the operational level are well informed by the strategies at the business level which, are informed by other corporate strategy. When once you completed this examination, we will have a clear and full picture of the method in which the company is functioning and should be in a place to assess the potential of the strategies. Therefore, you will surely be able to craft recommendations regarding the prototype of the potential actions. But however, you first have to mull over the strategy execution, and the way in which the company always tries to attain its greater strategies.
Chapter 7: Structure and Control Systems
The basic objective is to analyze the structure and control systems which Marmum uses in implementing its strategy. The structure of Marmum can be noted as a marketing based structure with industry uses its home grown market to sell milk products and constantly improving on its market sales.
One of its main stay of milk producing derives from cows as well as camel. Due to considerable amount of camel population in the gulf. And the demands of the population of camel milk related products. Another aspect which comes into picture is the usage of plants producing liquid milk and its products such as yogurts, cream and cheese. Plants manufacturing products, such as butter, milk powder, and whey powders are also used.
Milk production is unequal, and also depends on cow biology. So they adjust the milk mixing aspect which they sell in liquid form as well as processed foods depending on demand and supply.
As far as the control system goes they have a system where they use advanced engineering tools that allows them to meet the needs of the latest technological requirements for the milk producing market. And also these tools handle dairy standards functions very efficiently where they manage raw materials and intermediate stages of the production and every aspect up till finished product. This tool is a cross-industry functional enhancer as well.
That suggests that the company is running a satisfactory structure system which is enabling it to implement its strategy in a right way. And the level of differentiation is of a decentralized control form. It does use a product structure when we are talking about the horizontal differentiation. There lies an issue as the felicitation aspect has gone missing and they need to work on the appreciation part of the employee sector they are possessing. Managers should be getting due credit for their effort they put in.
In case of Organizational change is brought up then the management of organizational change. Can which I want to suggest Marmum, is related to thoughtful planning with a responsive implementation and consultation and participation of the people affected by the change which is in this case the people of U.A.E. If you compel change on people, it must be realistic and attainable and assessable. The goal of the company (i.e. becoming one of the best brands in U.A.E) could be achieved in a manner which they want it by altering their business strategy of single business to making it a multi business strategy and also keep a check on the Organizational change which can be an issue to counter.
It can also work on altering the level of vertical differentiation by giving way to multi level hierarchy system and leaving the decentralized control system. Having said, the strategic planning of the company is indicative of its growth. (changemanagement principles).
Chapter 8: Recommendations
The current situation of the firm is demanding a few well organized and tweaked strategic changes which will be instrumental in taking it one step ahead in the competitive environment presently withstanding. The analysis on the business level suggests that there needs to be a level hierarchy change which would mark a stark difference between regulation of milk products at a different stage altogether. The corporate level strategy requires a primary technique in the process management which is presently working as secondary one. There was already a suggestion reminding the company to keep a check on the organizational change which is unavoidable in this competitive as the company has to keep altering its strategic structures in order to cope up with the strategic problems that keeps on arising. The concept of differential strategy and the low cost strategy, if implemented simultaneously would prove much more effective in their case. The operational strategy’s introduction could imply low costing of products in a better way as well. The advent of new technologies in a very short span of time in the market needs a special attention so that the necessary up gradation is fulfilled.
The global issue of rising temperature is not to be overlooked one bit and the breeding activities
Should be a regular feature in their strategic planning as the growing heat is taking its toll and the need for the milk and its various products will certainly alleviate in the upcoming future and hence they need to produce at a higher rate and a higher amount to meet the needs. Another importance while standing up to the market needs is to promote quality staff, equipments, and processes and make sure they handle the new strategy well.
Incentives are an integral part of the employee centered industry and recognition in terms of awards and bonuses from time to time is the need of the hour. So, thus summarizing the case study noticed different strategic plans and saw that each firm has its own way of strategizing corporate and business aspects. And Mar mum Inc. Seems to be at power with this demanding and competitive market environment.
- Marmum official website. (n.d.). Retrieved on May 18, 2010 from http://www.marmum.ae/index.html
- Wikipedia encyclopedia (n.d.). Retrieved on May 18, 2010 from http://en.wikipedia.org/wiki/Strategic_management#Knowledge-driven_strategy
- Business Balls official website. (n.d.). Retrieved on May 18, 2010from http://www.businessballs.com/changemanagement.htm
- MGMT 488 official website. (n.d.). Retrieved on May 18, 2010from http://drdragon000.entryhost.com/msub3/MGMT488/lectures/Chapter3_Micro.pdf
- Marketing Plan Success official website. (n.d.). Retrieved on May 18, 2010from http://www.marketing-plan-success.com/Articles/Macroenvironment/
- The Free Library official website. (n.d.). Retrieved on May 18, 2010from http://www.thefreelibrary.com/Marmum+Dairy+eyes+increased+market+share+with+new+product+launches-a0209452495
- Encyclopedia.com official website. (n.d.). Retrieved on May 18, 2010 from http://www.encyclopedia.com/doc/1P2-20709371.html
- Ameinfo.com official website. (n.d.). Retrieved on May 18, 2010from http://www.ameinfo.com/68385.htm