According to a research one by Hams Rent leading a marketing and research firm, there is expected shifts within this industry such as merger and take over from Chinese and Indian producers to receive know how in exchange for bigger worldwide market shares, however, the European market will most likely supply itself. He also stated that the EX. quota will be undervalued by 9% running into 2015 from 2014. Cheese will remain price sensitive and any change will have a change by the consumers mind possibly looking for substitutes.
There should also be cuts in intervention supports. Analyzing through porters forces The forces is a popular tool to analyses the potentials of an industry. The Danish Milk and cheese industry is most profitable with exports throughout the EX. with around 50% for the UK and has been for more then a decade according to the World Food and Agricultural Organization. The firms are private owned and weave sustained small profits. The new super and hypermarkets retail sales was a large transit for this industry.
There was no door to door delivery system and profits were at large due to economies of scale. Mechanization of milking cows and reduced cost of labor was also shift towards increasing profits, however, the retail sector non began to squeeze as they had the buying power and this has had drastic effects in being able to wield healthy profits. New entrants In the past 50 years there has been many new cheese farms in Denmark to the trust of their technology from the I-J and other European countries.
The milk and cheese industry is old and has traditions and there there is a clear trend that it is mostly family owned and only in the last last 10 years has there been a partial shift from this. Substitutes Substitutes for dairy would be vegetables, fruit, poultry, Soya products nearly anything in a retail store including abstinence. Supermarkets such as Tests or Danish Cheese Industry By flexibility other cheeses.
Buyer power The buying power of large supermarkets (Tests, Assassins, Dank Supermarket A/ S )are strong enough to constantly demand lower prices for cheese, however, it is also in their best interests to have higher quality cheese types that yield better profits for both sides and the Danish industry has a good balance of both from the “Blue Costello” till the “Samos”. Supplier power The raw material that is most important to making cheese is milk. is a milk farm producing mm kilos of milk/ year from scows and a regular applier to produce cheese.
I believe the cheese producers have a good supplier power, however, with already more then a cooperativeness in the 1900 having a bad reputation towards one suppliers could quickly go viral today. The milk and cheese producers probably have good relationships due to history and the need for one another. Competitive rivalry Due to the industry being most profitable during export which is for the E market we have to look at the EX. market competitors as a whole. A research done by Mario Topmast titled Dairy cooperatives in the EX. there is only a veer small percentage of
Danish firms running as cooperatives, and I would estimate this to be a good direct competitive advantage for them against the Danish industry. However, according to another article by Christopher Lawfulre titled “World and EX. dairy through 2016” there has been a shift from the soother regions towards the northern regions due to the soother regions have intensive farming schedules and the north having less intensive ones. This allows more rural areas to be used for cow pasturing. Danish Cheese Industry with STEEPLES An External Environment analysis tool Fig. L Macro Environment, Industry, Firm
Fig. 1. Gastrointestinal 13 Feb. 2013[llama]At: http:// www. strategicmanagementinsight. Com/tools/pest-pestle-analysis. HTML (Accessed on 01. 11. 13). Factors What’s Happening Impact Options Social Increasing population Higher need for cheese Mid – term Increase population, seize better market shares Technological Economic Growth, increase demand, export Higher demand Mid term Increase productions Environmental Intense farming increase Could effect milk productions Long term Increase quality Political New EX. regulations Change in production methods New investments Legal
Corporate governance, Support towards northern milk producers Higher profits Re-invest, expand Ethical Stealing technology and know how Non-E countries enter market Long Term Mergers before occurrence, increase awareness, preparation, security Conclusion The Danish cheese industry has a lot of support from the people and is a valued constitutes a vital percentage of total exports for Denmark. If the Danish cheese production or milk production would be disrupted by other players entering the market their strategic capabilities would be put to test.
They have competitive advantage, experience and organizational knowledge. Having strong ties with the milk industry their supply chain is also strong. So, both internally and externally they seem to be versatile. There will probably be new technological benefits that will further increase milk productions from heard and will surely benefit the cheese manufacturers. The core competence also have a role for the cheese industry.
