AGRANA †From a local supplier to a global player Essay

The home market from the European Union is superstar market which everyone has free movement with goods, services, capital and people. This was not always the way if we look back out front the time of the EU we had a Europe which was over make full with conflicts and wars. Because of the foundation of the EU we got a freshet of opportunities in the westward Europe and in underlying and Eastern Europe but as well challenges because its not well-to-do to bring so many dissimilar countries to dispirither with different rules, cultures, norms and ethics under one uncollectible Union.western sandwich EuropeThe Western Europe refers to the countries in the west of Europe, where the distinction is different depending on the scope. only when the borders amid Western Europe and CEE were once determined by the ratio of power between the States and UDSSR during the Cold War. Europe was then divided in half by the Iron Curtain. Opportunities hotshot walloping opportunity for Western Europe is that the firms arse get cheap military man capital for their own control. even out today a blue-collar worker in Germany earns a quite a little much than in Poland. an other(a)(a)(prenominal) point is that the firms can invest in other assentprises from the CEE. So they can grow extremely nimble as we have seen this with the AGRANA Company. With the difference in culture between Western Europe and CEE the firms can enter in a impertinent market which can be really profitable. ChallengesBut the fact, that the firms can get so cheap human resources, is on the other hand withal a problem. Because of the cheap human resources, the own home farming workers testament lose their job and the unemployment rate of the country will rise. another(prenominal) challenges is, that firms from the CEE area can expand to the Western Europe area, so on that point is the danger, that it will get cast aside prices. The other culture and norms makes the whole situation a lot har der. The firms have to consider a lot of different aspects. When they dont do that the bare-assed branches cannot rise and flourish in the CEE countries. These are a a few(prenominal) challenges for the Western part of Europe and it is not easy to solve these problems. Central and Eastern EuropeThe Central and Eastern Europe countries include all the Eastern bloc countries west of the Iron Curtain, which was collapsed in 1989-90. withal included are the three Baltic States Estonia, Latvia and Lithuania. OpportunitiesFor the CEE states the integration of EU markets brought with it many opportunities to grow economically and politically. One of the big opportunities is that the CEE countries can benefit from the higher level of living from the Western Europe countries. Everybody can work easier and live in another country. So if you want to leave your home country and settle belt down somewhere else that is no longer a problem. We still see this phenomenon to this very day in the Western European countries. More and more(prenominal) people are coming to live in the country than emigrate. The firms which can make backup in the CEE countries are creating new workplaces and paying taxes on the profit. So the whole country and the government have the chance to raise their level of living. ChallengesOf course there are on the other side also challenges for the CEE countries. One of them is that the countries have to pay attention to their own experts in the country. A lot of firms in the Western part of Europe want to win the elite of the country over. This can be very dangerous for the own economy. The second aspect is that because of the orbicularization the poverty gap is getting large and bigger every day. The CEE countries have to be very careful that they dont lose the vex to the industry states.Question 2 From a resource-based view, what is behind AGRANAs impressive yield?AGRANA was founded in 1988 as a holding fellowship for the Austrian sugar and Starch industry. Operations started with 3 sugar plants, a potato stiffen plant and a corn starch plant. Nowadays, AGRANA is one of the take suppliers to the multinational brands somewhat the world with revenues of US $ 2.6 billion and capitalization of $1.4 billion. In the last two decades, it has become a global player with 52 production plants in 26 countries with three strategic pillars sugar, starch and fruit. The resource-based view focuses on a firms internal resources and capabilities, for casing rare knowledge in the refining and bear on of agricultural raw materials like AGRANA. These proper(postnominal) knowledge is a big advantage for the AGRANA play along and not easy to copy by other competitors. After the reorganization of the European sugar market by the European Union, AGRANA was motivated to look for new directions to ensure future growth of the enterprise.AGRANA decided to diversify into the fruit- kneading do master(prenominal) in the future. This was a really well-chosen decision, because AGRANA was able to transmit their core competence of the refinement process comparatively easy to the fruit area. With the existing knowledge AGRANA foc utilize on fruit preparations and the manufacturing of fruit juice con centimerates to sell them globally to fruit juice and drinking bottlers and fillers. An analysis of the dates of the Tables 4.1a and c (AGRANA plant locations) shows, that the fruit sector is mostly responsible for the impressive growth of the AGRANA Company in the last years. In only intravenous feeding years (from 2002/3 to 2006/7) AGRANAs plant locations increased from totally 20 plant locations (15 Sugar, 5 Starch, 0 Fruit) to 53 (10 Sugar, 4 Starch, 39 Fruit). It is noticeable that during these four years the reduction of the number of sugar and starch plants was completely compensated by the new fruit plant locations.Moreover, AGRANA expanded during the growth period crossways the world. Especially with the fruit se ctor AGRANA practiced plants in countries like Argentina, Brazil, China and regular army for example. The key to the impressive growth of AGRANA and particular the fruit sector were firstly learnednesss and secondly the ability to commix those acquired into the group to realize synergistic effects . It started with the acquisitions of Denmarks Vallo Saft (presence in Denmark and Poland) and Austrias Steirerobst (presence in Austria, Hungary, Poland Romania, Ukraine and Russia) in 2003. Furthermore, this was followed by acquisitions of France Atys Group (largest acquisition, 20 plants across every continent), Belgiums Dirafrost and Germanys Wink Group. AGRANAs most fresh enlargement was a 50-50 joint venture with Xianyang Andre Juice Co. Ltd. in China.The chosen consistent acquisitions policy of AGRANAs CEO Johann Marihart was only possible because of existing relationships and a huge amount of capital. AGRANA benefited from existing relationships to the solid nutrient and beve rage industry from the sugar and starch sector, whereby the diversification into a new sector was a bit more straightforward. With the existing relationships it was easier to find on the one hand acceptors for the new AGRANA products and on the other hand new business partners in the area of distribution for example. Furthermore, Johann Marihart believes that growth is an essential requirement for the manufacturing of high-grade products at free-enterprise(a) prices. For this very reason, AGRANA is prospecting for new growth opportunities in the future. Hence, AGRANA has started to diversify into the biofuel sector to ensure future growth and expansion of the company.Question 3 From an international perspective what challenges do you foresee AGRANA facing as it reach outs its expansion into other regions such(prenominal) as Asia?The impressive growth of the AGRANA Company is connected with an expanding scheme in Europe as well as in other continents like America and Asia. With th is scheme AGRANA discovers new regional, cultural and wrangle challenges for instance. AGRANDA already have a lot of experience in Asia because in 2006 they acquired a 50 % lay on the inventory in concentrates manufacturer Xianyang Andre Juice Co. Ltd the company is located in the province Shaanxi China and also in 2008 AGRANA started a second joint venture for apple juice concentrate in Yongji China. But perchance they capability have the problem of adapting to a different business culture. The business model that AGRANA use in Europe and the western world might not work as well in Asia. AGRANA will have to be flexible and adapt to the business characteristics of that certain country that they expand too. more Asiatic countries have certain business characteristics that are deeply related to the countries tradition and these traditions will not in most cases be changed. Because of this many of AGRANAs business standards such as work ethics and vigilance styles may not match up well with Asian culture. In Asia a lot of administrative tasks that have been made easy in the west can be very time consuming. Many procedures that would be handled electronically in the West need a lot of paperwork which need to be filled out and stamped by hand. Cultural misunderstanding from miscommunication could be one of the biggest challenges that AGRANA will have to organisation. It might be very hard to make a business deal in Asia because of communication problems as there are a lot of English speakers in Asia but not many of them would have a strong enough understanding of both Chinese and western culture to help in business negotiation situation.Also Many Asian countries have high context cultures and AGRANDA would be more used to operating in low context cultures like in most of Europe. In high context cultures communication relies upon unspoken conditions or assumptions. This nitty-gritty that yes does not necessarily mean yes and this could be a study challeng e for AGRANDA as they would not be used to this. Also another challenge that AGRANA might face would be that their products might not be as popular in these regions and because of this it might not be as profitable for the company to open a branch in Asia. Some of the infrastructure might not be very good in some eastern Asian countries so things like transportation of their products might not be delivered very safe or as efficient as in their European branches.Also because of climate and pollution it might cost more money to donjon the products fresh. ARGANDA might have trouble with human resources because in the western world employees give a lot of responsibility and would have more flexible lines of authority whereas most of the Asian workers are more accustoms to a hierarchical structure in which each worker has their own role. both in all AGRANDA cannot fix success in another region but if they tour sensitive to the areas culture and local traditions for instance they can at least avoid some basic mistakes.Question 4 Compare the growth strategy of AGRANA to that of Danisco, one of its competitors in the sugar market. Which strategy do you expect to be more sustainable in the long run?To sum up the second question, AGRANAs impressive growth strategy is affected by acquisition associated with the diversification into the fruit sector. AGRANA acquired competitors particularly in Europe and expanded nearly the World and led them to be one of the biggest players.The Danisco Company is a danish pastry bio-based company with activities in food production, enzymes and other bioproducts as well as a wide variety of pharmaceutical grade excipients. Danisco occupied 6800 people in 17 countries and is one of the worlds leading producers of ingredients for food and other consumer products and was also one of the biggest sugar producers in Europe until the divestment of its sugar component to Nordzucker in 2009. However, to look at the things in the right seque ncesDanisco had been created in 1989 by a merger of three companies aiming to create a strong Danish company that could compete in the EU common market after its completion The new company reinforced the foods, food ingredients and packaging businesses, particularly in the sugar sector, Danisco first consolidated its dominant touch and Denmark, and then grew by acquisitions. But after the reorganization of the European sugar market and also because of the ecstasy of competition in the sugar market, Danisco was motivated to alter and started a longtime shifting process. In 1997, the new CEO Alf Duch-Pedersen of Danisco started focusing on becoming a global food ingredients company.During the following years, Danisco started to acquire lots of ingredient and similar companies to initiate the transformation. The first step to become a global food ingredients company was to acquire the Finnish ingredient company Cultor in 1999 and at the same time the divestment of the De Danske Spri tfabrikker Company (spirits and liqueurs) and mark foods and food packaging.In June 2004, Danisco acquired the Rhodia Food Ingredients Company which becomes Daniscos dairy cultures division. The division is one of the two leading producers of dairy cultures and food safety products. Rhodia is located in France and is an international operating company with a global presence in Asia Pacific, Latin America and North America for instance. This will be followed by the acquisition of Genencor International in 2005, which became Daniscos enzymes and bio-chemicals division. Furthermore, Danisco invested in new research establishments in Shanghai, China for example. In contrast to AGRANA, Danisco divested as well, for example the flavor division to Firmenich. But the most important decision was the divestment of Daniscos sugar division to the German Nordzucker AG.With the divestment of the sugar division, which was one of its main divisions in the past, the transformation process was comp leted. During the transformation process the internationalization of sales of the company increased rapidly. It is mentioned that the sales outside of Denmark rose from 69 per cent 1995 to 88 per cent in 2004 and over 95 per cent after the sale of the sugar division. In addition, it is impressive to see that the turnover of Danisco was 1.7 million in 2009 and that the turnover consisted mostly of all the continents, that means that Daniso has become a global player operating all over the world. After the transformation, Danisco was positioned as a specialized supplier of food ingredients based natural raw materials. Its customers included global food giants such as Unilever, Kraft, DANONE and Nestl, as well as regional and local players in all major economies. In a final step, Danisco were acquired by the DuPont Company in 2011.Daniscos attractive industrial enzymes and specialty food ingredients businesses have clear synergies with the DuPont Applied BioSciences and Nutrition and Health businesses. This merger advances both companies global efforts to provide sustainable solutions and to ensure future growth and expansion of the company. Summing up one can say that AGRANA grew by getting a lot around the world and by diversifying their business. Danisco grew by internationalizing their sales, transforming their business to the leading producers of ingredients for food and interchange their previous businesses in order to focus on the new ones. The most important difference between these two growth strategies is that AGRANA valued to ensure future growth by diversifying into other products with their existing knowledge. Danisco wanted to guarantee future growth by transforming themselves into a leader in a niche market.To solution the last question we want to define Sustainability in the long run. Sustainability or sustainable strategy at its most basic level suggests that a company will improve its chances of survival in the future by ensuring that resou rces used by the business are responsibly managed and maintained. Moreover, in business, it is the ability of a company to develop and implement winning strategies that lead to long-term success and the ability to decide when to stay on course with the proven strategies or when it is time for change.We expect the AGRANAs strategy to be more sustainable in the long run thanks to their diversified sources of income such as their three main pillars starch, sugar and fruit. AGRANA has more sectors to play on so AGRANA is not as dependent of a specific product sector like Danisco if business does not go as planned. The opportunities of growth are also bigger, because AGRANA has more capital and AGRANA has more companies to sell their AGRANA products to in the future because AGRANA is present worldwide and especially in emerging markets. In addition, AGRANA is part of a safe market, AGRANAs three pillars are always in demand also due to the fact that the earth population will grow. Moreov er, AGRANA could enlarge their product line by diversifying to another sector with their existing knowledge as well as the fruit sector. All in all, AGRANA has a very good sustainable business strategy and we think that AGRANA will continue to be very successful in the future.Resourceshttp//www.danisco.com/about-dupont/duponttm-daniscor/history/ http//www.agrana.com/en/agrana-group/about-agrana/history-of-agrana/ http//www.us-pacific-rim.net/the-five-biggest-challenges-for-businesses-in-china.html http//www.mapconsulting.com/articles1-177/BusinessSustainabilityTheStrategiestoAchievetheLeadershiptha- tMakesItHappenhttp//www.wisegeek.com/what-is-long-term-sustainability.htm http//www.rhodia.com/en/about_us/worldwide_presence/index.tcm http//en.wikipedia.org/wiki/AgranaHistory