The infrastructure needed to support the business was not fully developed. For the raw materials peas , farmers needed help with investments in harvesting equipment and with farming expertise. In the distribution, retailers needed financing help with the purchases of refrigerators. In such scenario, it made sense for Birds Eye to both forward and backward integrate as it had the both the capabilities and resources to manage the entire supply chain.
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The infrastructure needed to support the business was not fully developed. For the raw materials peas , farmers needed help with investments in harvesting equipment and with farming expertise. In the distribution, retailers needed financing help with the purchases of refrigerators. In such scenario, it made sense for Birds Eye to both forward and backward integrate as it had the both the capabilities and resources to manage the entire supply chain. During such remarkable growth periods it makes sense for companies to vertically integrate so as to secure the raw materials, ramp up distribution and production capacities in order to keep up with the demand.
This requirement of the industry required producers to have control over all aspects of production. For vegetables however they worked closely with the farmers providing them with both capital and expertise with the growth of high quality produce.
Both the models allowed Birds Eye to have a tight control over it supply chain. The reason for the difference can probably be explained by the fact that in the vegetable market Birds Eye was able to secure the supply of raw materials with longer-term contracts with the farmers, However with the fish supplies, there process was more adhoc where the supplies were either bought from dock side auctions are imported from Scandinavia.
This process did not let Birds Eye have enough control so they fixed the process by vertical integration. The emergence of smaller firms opened up opportunities to offer specialized services to manage the various functions in frozen food retail.
Retailers found it profitable to introduce their own brands in the market. Birds Eye did not cater to this niche market whose requirements were different from the consumer market in the sense that they need larger packaging sizes at a lower cost. These factors led to the emergence of competitors like Menu master Ltd to cater to this segment.
The new entrants required help with the distribution and production, which again stimulated the emergence of specialized intermediaries like Flying Goose, which specialized in this segment.
The size of these new entrants led to emergence of these market intermediaries to provide cost synergies in the scattered market place. Did a vertically integrated producer have a competitive advantage over more vertically specialized suppliers of frozen food during the early s?
Although vertically integrated producer did enjoy some competitive advantages relative to the specialized suppliers, but over time their structure led to some disadvantages in other areas, which negated their advantages. On the whole the disadvantages exceeded the advantages.
On the other side vertically integrated suppliers had multiple product lines, which led to inefficiencies. What should Birds Eye have done in ? Though the margin will be lower in this business it will help recapture market share.
This led to difficulties with marketing as promoting such widely different products was proving to be difficult.
Birds Eye should consider concentrating on the most profitable product lines, use it s brand image as leverage and promote higher margin products while doing away with the unprofitable product lines. Share this:.
Birds Eye and the UK Frozen Food Industry Harvard Case Solution & Analysis
The increasing impact of digital technologies on all of its business units had prompted CEO Joe Kaeser and his team to put digitalization at the core of the new corporate strategy, alongside electrification and automation. Leave a Reply Cancel reply Enter your comment here Birds Lndustry should consider concentrating on the most profitable uk. View our pricing guide or login to see prices. Though the margin will be lower in this business it will help recapture market share.
Birds Eye and the U.K. Frozen Food Industry (A)