Critical Analysis of Synlait Milk Management and Marketing Strategy

Published: 2021-09-14 02:00:11
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Category: Corporation, Marketing

Type of paper: Essay

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Primarily Synlait’s reliance on a third party for the packaging process is an impotency. The use of outsourcing the packaging process may be of disadvantage as it is highly likely that the outsourcing provider may work with other customers, therefore they might not give 100% time and attention to a single company. This may result in delays and inaccuracies in the work output. To further buttress this disadvantage, losing management control of business functions denotes that you may no longer be able to control operations and deliverables of activities that you outsource keeping in mind their growth and development objective.
Synlait’s has left lot to be desired in terms of marketing to its customers. Success in terms of sale has been achieved but its positioning and unique selling proposition is not limpidly defined which can lead to the increase of competitor’s advantage in the industry i.e. Fonterra who has a unique value proposition due to its differentiation strategy in order to cater to different tastes and preferences such as cancer friendly products, Anlene, Mainland etc. Synlait’s low research & development can reflect why they are unable to achieve this unique selling proposition. As of 2017 Synlait’s research & development cost was $566000 in comparison to Fonterra’s that is typically $100 million a year as well as Nestle whose research and development cost was 917.46M for Dec. 31, 2017 based on the semi-annual report .It’s poor product demand forecasting leads to a higher rate of missed opportunities in comparison to its competitors. In this light, one of the reasons why the inventory days are higher compared to its competitors is that Synlait Milk Limited tend to keep higher inventory both in-house and in channel. This lack of choice gives existing and new competitors a foothold in the market.There is a questionable average tenure for the Synlait Milk management team which is less than 2 years, our research suggests a new team every 1.3 years which is short especially for management .It suggests inconsistency and instability which may reflect on the company figures as the turnover of management is volatile. This shows no consistent strategic direction. Synlait milk do not address their environmental impacts unlike its competitors such as Fonterra whose policy vividly defines Fonterra’s commitment to safeguarding natural resources through reducing environmental impacts across the global value chain, continuously improving performance and efficiency, and promoting the protection and enhancement of natural resources and ecosystems that support dairy.Synlait has plans for future improvement on environmental issues in the next decade but no reports on Synlait’s current standing on this have been reported.

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