The Natural 1st Choice Dairy Company
An Arla Foods case study

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Summary

Concepts:

Arla Foods, market, milk, competencies, culture, business, brand, vision, customers, consumers, Arla employees, dairy, innovation, values-driven culture.

Summary:

Responding to change in the business environment is challenging, particularly for large organisations.

Such decisions should be designed to improve the ability of the organisation to compete, through new and unique ways of meeting customers' needs which competitors find difficult to copy.

Providing core competencies cannot be imitated, allocating resources on this basis provides a competitive advantage.

This case study looks at the growth of a producers co-operative to become the largest dairy group in Europe and how rapid growth required a values-driven culture and identity.

Arla Foods has its origins in a co-operative of 17,000 farmers founded as Anmark in Denmark during the early 1970s.

As a co-operative, the farmers banded together to negotiate with retailers who it sold to, and agriculture suppliers it bought from.

The business entered the UK market in 1992 by purchasing a number of dairies.

With six operational sites and a head office in Leeds, Arla Foods employs 2,000 people within the UK and processes over 1,000 million litres of milk annually.

It is important for all organisations to have a statement of purpose or a vision to define their purpose.

An internal team called Project Soul talked to a range of stakeholders such as owners, customers, farmers and employees.

The team wanted to develop a vision for the business and then create a way for employees to buy into this.

This involves creating the right first impression, being fast and flexible in meeting the changing needs of customers e.g. retailers and final consumers.

Other than flavoured milks, there has been little innovation in the fresh milk market.

For the consumer, the trigger to purchase is both need and the colour of the cap on the plastic container in the supermarket.

The marketing processes involved had to be focused upon identifying, anticipating and satisfying consumer requirements for a new milk to turn what was viewed as a commodity into a brand.

Learning outcomes:

As a result of carefully reading this case study, students should be able to:

  • understand the importance of business strategy in helping an organisation seek a distinctive position within the market place
  • link the development of an organisation's vision with the values represented by employees
  • understand the importance of employee development
  • link innovation and new product development with the purpose and mission of an organisation
  • understand the processes involved in marketing a new product.

Arla Foods | The Natural 1st Choice Dairy Company