Essay Preview: Strategic Alliance
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Stonyfield Farm Team Project #1
In the mid- 1980s, Stonyfield Farms began an initiative to “restore the environment” by selling fresh, organic dairy products. Stonyfield strives for authenticity, integrity, and purity in their products and in the way they conduct business Social responsibility has always been a high priority at Stonyfield, hence why it is central to their identity and purpose.. In addition to creating products that provide healthy alternatives, Stonyfield Farm also seeks to create honest relationships with their employees, suppliers, customers and the communities they serve.
Stonyfield Farm is committed to addressing difficult issues and displaying integrity in their attempts to resolve them. They strive to work together with suppliers to promote high standards. They value diversity in the workplace and intend to become a visible presence in the communities where their products are sold. When presented with a purchasing decision between two financially comparable alternatives, Stonyfield is committed to choosing the option that best addresses the needs of economically disadvantaged communities.
In the following powerpoint presentation, we will discuss how Stonyfield can deal with the various social values and responsibilities of the international countries they may potentially market to and/or conduct business in. We will identify several factors they should consider prior to going global. We will also consider what challenges Stonyfield will face in their attempt to go international. We will determine whether a global product structure or a global geographic structure would best prepare them for success. Lastly, we will identify ways that Stonyfield Farm can maintain their “eco friendly” operations on an international scale. .
Stonyfield must consider several things prior to launching a global operation:
Value Assumption~ Browne & Keene (2010) define a value assumption as the unstated values and morals attached to ones reasoning that influences their behavior. Stonyfield values social responsibility and producing organic, eco-friendly products. But social and cultural values differ from country to country; They must consider whether their value assumption are held by the international countries they plan to market their product to.
What strategy to employ: Daft (2010) considers two different strategies:
Multidomestic strategy, where product design, manufacturing and marketing
are handled independently. Or,
Global standardization strategy, where product design, manufacturing and
marketing are consistent throughout the world. Our teams recommendation is they standardize their operations to maintain efficiencies and reap the benefits of focusing on an economies of scale.
How to structure their organization: Daft (2010) maintains two approaches:
Global product structure: managers from each division are responsible for the
entire process of production and distribution for all markets.
Global geographic structure: different regions of the world would be in charge of production and distribution for their particular area.
3 Major Challenges they will face: Daft (2010) asserts they are:
Complexity and differentiation. Stonyfield will be competing in various nations with different governments, values, needs and cultures. They must be prepared to deal with each nation independently.
Need for Integration. How can Stonyfield collaborate across their various
divisions to achieve economies of scale?
Transfer of knowledge and integration. Each division at Stonyfield will gain
knowledge and expertise in their field. How will they integrate that to other parts of the company? Question: where is this question from? Is it posed to us? What is the answer? How will they integrate the knowledge and operatiosn into other division? What is our recommendation?
Stonyfield must consider major ways to achieve international presence:
To increase its chances of entering a countrys dairy market as a premier organic dairy producer, Stonyfield would need to create a strategic alliance. Identified as one the most popular methods of entering the international arena, a strategic alliance would involve Stonyfield Farm corroborating with a well established firm within the dairy industry in the country of its choice in order to enter a country more easily (Daft, 2010, pp 216). The form of strategic alliance that Stonyfield would benefit the most from is a joint venture. Other forms of strategic alliances are licensing and consortia. Licensing involves allowing a foreign firm the rights to produce your product and consortia involves a group of independent companies coming together to share skills, resources, costs, and access to each others markets (Daft, 2010, pp 216). Because Stonyfield offers such a unique product that requires attention to all ingredients to ensure their organic nature and the eco-friendly environment of production, licensing and consortia would not be feasible as Stonyfield would want to remain active in the dairy production. A joint venture, on the other hand, would allow the firm to stay involved in all operations.
Question: What is our recommendation? What company can they partner with? How would a joint venture be achieved? Does the venture partner have international recognition already? Would we be partnering with different companies per country? I ask b/c the relevance of these terms and strategic alliance is solely dependent on a recommendation.
A globalization strategy would standardize Stonyfields product design, manufacturing, and marketing strategy throughout the world (Daft, 2010, pp 216). With such standardization, Stonyfields organic dairy products would be consistent all over the world, and would place the same emphasis on organic materials and eco-friendly operations wherever the products are sold.
Question: What about countries where the milk processing and quality assurance procedures