SAE Final Report V1

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Strategy, Analysis and Evaluation


STRATEGIC RECOMMENDATIONSFOR WIMM BILL DANN

Report prepared by:

Georges A. BouveratReg. # 200556668

Kinsey

Kenneth W. GregsonReg. # 200563139

Kinsey

Stephen HopkinsonReg. #Kinsey

Jennifer QuintonReg. #Kinsey

Robert ReynoldsReg. #Kinsey

Anna C. SeidelReg. # 200653802

Ledaig

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Executive Summary (300-400 words)

From Workbook, pg 121: should be a short, high-level report in its own right, in which you

should communicate concisely the key opportunities and challenges, the recommendations

you wish to make, together with a statement which sets out the benefits and advantages the

case study organisation are likely to gain in the future as a consequence of your report.

should discuss briefly implications of each of the key opportunities and challenges

identified from analysis. provide enough detail and understanding for the CEOalso

provide a discussion of the strategic benefits to be gained by the org. together with a note

about resource implications in the future. ...each major recommendation is discussed in a

short concise paragraph of its own.

Goal: 300 400 words

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Table of Contents

1 Introduction (100-200 words)...............................................................................................4

2 Environmental Analysis (700 words)...................................................................................5

2.1 Transactional Environment...........................................................................................5

2.2 Internal Environment.....................................................................................................6

3 Key Strategic Issues and Constraints (200 words)..............................................................8

4 Conclusions (200-300 words)..............................................................................................9

5 Recommendation (700 words)...........................................................................................10

6 References (check referencing style)................................................................................11

7 Appendices........................................................................................................................13

Appendix A PESTLE Analysis..........................................................................................13

Appendix B WBD Sectors.................................................................................................16

Appendix C Five Forces Analysis Russian Dairy, Drinks and Baby Food......................17

Appendix D WBD Resources............................................................................................21

Appendix E WBD Market Segmentation...........................................................................22

Appendix F WBD Markets, Market Share & Competition ................................................24

Appendix G Relative Strengths of WBD and Top 10 Global Leaders in Food...................25

Appendix H Russian Consumer Values ...........................................................................26

Appendix I Stakeholder Analysis......................................................................................27

Appendix J 7 Whys..........................................................................................................28

Appendix K WBD SWOT Analysis ...................................................................................29

Appendix L Strategic Option Generation TOWS ...........................................................31

Strategic Option Generation Ansoff Matrix ...................................................................32

Appendix M Options to be considered..............................................................................34

Appendix N Option Evaluation Suitability.......................................................................37

Appendix O Option Evaluation Stakeholder Expectations..............................................39

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1 Introduction (100-200 words)

Assumptions/Fundamentals (Aim to maximise value in 5 years to make it attractive for sale.)From Workbook, pg 121 include a brief not about the approach adopted to undertake the

strategic analysisnote about the purpose of the report and how it could be used by the

organisation in the future.Goal: 100-200 words

Sample content/Comments:

Field Packaging Example from Intranet:

This report outlines medium term (3 5 years) strategic recommendations for the business

strategy for Field Packaging East Kilbride (FPEK). These recommendations are based upon

a comprehensive strategic analysis of FPEKs current and likely future situation. The

recommendations aim to enhance FPEKs existing competencies. This will add value to the

both the company and its customers. Thus enabling FPEK to develop and sustain

competitive advantage in the highly competitive branded products market segment of the

packaging industry, in which it operates.

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2 Environmental Analysis (700 words)

2.1 Transactional Environment

Social

Despite a projected decline in population of 10 million by 2010 6, Russia is seeing a rise of

the middle class, which has now reached 4 million adults and children 6. This segment has

a taste for westernised affluence, so is demanding higher quality, premium, healthy products

and increased convenience from the retail sector. There is a strong need for organisations

to address this demand by supplying more innovative products of higher quality to the

market (such as premium-range yogurts and healthy snacks).

Market

It is estimated that the grocery market in Russia will reach $186 Billion USD by 2010 which

will be good for WBDs future in the dairy market 6. In urban centres especially, there is a

shift towards food being sold in supermarkets so that by 2010, 45% of it will be sold there as

compared to 28% in 2006 6. These figures suggest that the future for WBD dairy lies with

strategic customers, such as major supermarkets.

Globalisation

With an increase in globalisation, continued growth in GDP (5% per annum), a decrease in

unemployment and increases in disposable income, the Russian consumer market

continues to be attractive to global players. In recent years, Marks and Spencer, Wal-Mart ,

Anchan and other Global retail chains have looked to expand into Russia, however, of the

25 food retailers currently, only 6 are International 6.

Competitive forces

The sectors in which WBD operates (dairy, beverage and baby food) are attractive to

companies and offer the potential for significant growth (see C). A dominant force is the

unique Russian context acting as a barrier to entry for international companies, although

they are overcoming this by establishing production facilities in Russia (see C). The need for

good distribution and regional suppliers acts as a barrier to entry. The potential buying

power of major retailers (eg. major supermarkets) can put pressure on food producers and

WBD is highly reliant on industry leaders Cargill for supplying juice concentrate and

Tetrapak for supplying packaging. The increasing demand for premiumisation is putting

pressure on Russian companies to improve quality due to the perception that internationalcompanies offer higher quality (see C).

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Dangers

There are a number of areas of concern for WBD in the future. Politically, Russia continues

to be uncertain, volatile and governmentally restrictive 6. Corruption is also an ongoing

limitation for organisations 6. A present threat for WBD, in terms of the SWOT analysis, is

that if it grows too big, then it will be more susceptible to corruption and political influence.

2.2 Internal Environment

In order for WBD to survive and prosper, it is important to determine the adequacy and

suitability of its resources and competencies. This section considers WBDs strategic

capability, with reference both to its competitors and crucially the values of consumers.

The following resources are considered to be unique to WBD as they are not readily copied

or obtained by competitors, they build on the consumer values (such as strong yet local

brand, health additives, accessibility see H) and underpin a competitive advantage for the

company:

Manufacturing facilities across Russia and CIS in the most resource-rich areas 6

Distribution centres providing access to local markets and 2000+ Moscow shops 6

Access to funding as a floated company on the NYSE 6, enabling investment in

innovation 21,000 staff with Russian market knowledge 6

Strong dairy and juice brands 6

Management team focusing on value and driving down costs 6

Many of the strengths displayed by the top 10 food leaders globally (see GG) are mirrored

on a country-wide basis by WBD in Russia, such as market leading position, large product

range, investment in acquisition and innovation.

It is important to consider whether WBDs resources are deployed effectively to create a set

of core competencies. According to its website, WBD considers one of its competitive

advantages to be that it is neither regional nor Moscow-centered but is a truly national

Russian manufacturer 6. WBD is investing heavily in marketing and innovation to grow

brand equity and market share 6. The most recent company presentation highlights, as a

strategic imperative, an investment in the sales team and route to market control, with a

focus on trade and Point of Sale marketing, centralized key account management for all

business leading to economies of skill and scale in dealing with large customers 6.

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We used the 7 Whys technique (see J) to help better understand the underlying causes of

WBDs dominant market position. It suggests that WBDs sound financial systems and

access to funding have enabled good investment decisions for research and development

and acquisition of regional manufacturing plants. To leverage its strong financial position,

WBD adopts a marketing focus to understand consumer demands and excellent people

management to make the most of the breadth and deep experience of staff to produce and

sustain strong brands.

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3 Key Strategic Issues and Constraints (200 words)

The key strategic issues, which will have the greatest impact on WBD, are:

Politics

Russian politics will see increasing authoritarianism and statism in economic policy 6.

Corruption at all levels of society will present considerable constraints to economic

development 6.

Economy

Despite the political influences the Russian economy will continue to stabilise. A growing

middle class with increased spending power will emerge 6. The result of this is projected

13% annual growth rate in spending on food & beverages 6.

Competitive Situation

Double-digit growth will attract multinationals to the Russian food & drink market, e.g.

Danone, Unilever. Strategic customers such as restaurant and supermarket chains e.g.

Tesco will assume a significant role in the market.

Food & Drink TrendsGrowing westernisation of Russian culture will take place in the upper and middle classes.

Convenience foods and affordable restaurants will be in demand by the busy middle class. 6

6

Decreasing life expectancy in the poorer sections of society will prompt trend towards

healthier nutrition. 66

The market will exhibit the following competing trends:

Premiumisation 6

Convenience 6, 6

Health consciousness 6

Return to traditional tastes 6

Low-income preference for low-cost nectars and traditional dairy products 6

Raw Materials & Logistics

Growth will be constrained by raw material supply problems e.g milk and fruit concentrate 6.

Increases in transportation and packaging costs due to rising oil prices and currency

fluctuations may restrict growth. 6

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4 Conclusions (200-300 words)

The following conclusions can be drawn from a review of the environmental analysis and

identified key issues.

WBDs current marketing-focussed strategy addresses the identified trends in food

and drinks in Russia. This should be maintained since quickly satisfying changing

consumer needs is key to maintaining and growing market share.

Knowledge of the Russian market (cities and regions) is an existing WBD

competency and competitive advantage. This should be developed further, as it is

a barrier to entry to non-Russian entrants to the food and beverage market.

Marketing orientation is a necessity in consumer businesses but for WBD a key to

taking advantage of the growing economy and increasing market share lies in

operations and logistics improvements. Focussing a future strategy on these areas

will expand WBDs competitive advantage and create strong barriers to entry.

Optimising operations will address the identified raw materials and logistics

constraints and remove a current obstruction to growth, while at the same time

building new and lasting competencies in operations and logistics.

WBD can take advantage of the growth of supermarket chains and other retailers

in Russia by establishing strategic partnerships with them at an early stage in their

development. Besides building competencies in strategic account management,

there are opportunities for distribution agreements and own-branding. However,

strong operations and logistics processes and a reliable supply of raw materials

are pre-requisites for making these partnerships work.

The political situation in Russia is a constant threat to future developments. WBD

must monitor this but should not allow the possibility of political change to restrict

its plans for strategic growth.

(See M for complete list of identified opportunities and N & O for process of option

selection.)

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5 Recommendation (700 words)

Recommended (final) strategic response(s). Note: I dont think we need to include all our

discussed options, only the final one. There do need to be high-quality appendices to back

this up though, showing different options and how they were generated and evaluated for

suitability, acceptability, evidence and feasibility (Workbook, pg 111).

Comment that final recommendation was submitted to (and approved by) remarkable person

(Ian).Workbook, pg 122 develop your strategic response to safeguard the organisation from

threats or capture the opportunity identifieddiscuss the ways and means to achieve these

objectives. recommendations include actions to capture customer value and actions to

develop distinctive competenciesto achieve sustainable competitive advantage.

building a coherent argumentkey is ability to synthesise and integrate findings think

about implications of your recommendations in terms of creating a sustainable competitive

advantageconsider resource implications and actions necessary for implementation.Appendices: Ansoff Matrix, Option/Issues ranking matrix, financial evaluation, feasibility

tests, see chapter 6 of workbook, email response from Ian?Goal: 700 words

Using data from the Strategy Clock & Distinctive Competences (DC)

The CSF's identified above then need to be achieved or realised. This can be done using

the strategy clock. We need to use the existing DC's to lever the current products to new

locations on the strategy clock. This doesn't mean make everything high value, of course

some will be. I think we can also lever current branded products to get us into the low price

own brand ("Shop Shite" as Robert MacIntosh referred to it). This will then link back to

external analysis.

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6 References (check referencing style)

[1.] EIU Viewswire, 19 Jan 2007. Proquest.

[2.] Sector Profile on Food and Beverage in the Russian Market, New Zealand Trade and

Enterprise, Hamburg, January, 2007

[3.] WBD Segmentation in WBD Memorandum, 6 February 2006

[4.] Open Season. Global Finance, Mark Lehane, April 2007

[5.] EIU Industry Forecast Food, beverage and tobacco, Russia, 24 Jan 2007, EIUViewswire, New York

[6.] FCO Country Profile Russia, 2007

[7.] WBD Case Study, GSB Strathclyde, April 2007

[8.] WBD Investor Presentation, FY2006, company website

[9.] WBD company websitehttp://www.wbd.com/[10.] Consumer Foodservice, Russia, February 2007

[11.] WBD Memorandum, 6 February 2007

[12.] Danone Annual Report, 2005, from company website www.danone.com

[13.] Customer Loyalty: Devising successful strategies in food and drink, BusinessInsights, 2003

[14.] S Massey, The Top10 Global Leaders in Food, Business Insights, 2006

[15.] Exploring Corporate Strategy, Johnson, Scholes and Whittington, FT Prentice Hall,7th ed, 2006, Essex

[16.] Associate British Foods plc, 2006 Company Profile: Competition Analysis. Just Food,July 2006

[17.] Pyaterochka's $800m loan sets pace for Russian M&A finance in fresh sectors,Euroweek. London: Aug 18, 2006. pg. 1

[18.] COMPANIES INTERNATIONAL: Danone's Russia man moves to Wimm Bill Dann,Financial Times, London (UK), Jul 1, 2004. Pg. 22, Andrew Jack

[19.] Cargill company website, http://www.cargill.com/

[20.] Tetrapak company website, http://www.tetrapak.com/

[21.] Russia: Wimm-Bill-Dann Opens Baby Food Plant, Flex News, 30 April 2007

[22.] Rising juice demand helps Troya Ultra in Russia, cee-foodindustry.com, 21 March2006

[23.] As wages rise in Eastern Europe, businesses look elsewhere, International HeraldTribune, Europe, 4 April 2007

[24.] Milk supply dries up as demand spills over, nzherald.co.nz, 16 May 2007

[25.] CEE markets support beverage giants' ambitions for European expansion, cee-foodindustry.com, 18 October 2006

[26.] CIA World Fact Book

[27.] Russia feels effects of emerging markets turmoil, Global Finance, Kim Iskyan, NY,

Apr 2007, Vol 21, Iss 4

[28.] Russia economy: Criminals in the marketplace? EIU ViewsWire. New York: Nov 1,

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http://www.wbd.com/http://www.wbd.com/http://www.danone.com/http://proquest.umi.com/pqdweb?RQT=318&pmid=11290&TS=1179676205&clientId=46002&VType=PQD&VName=PQD&VInst=PRODhttp://proquest.umi.com/pqdweb?RQT=318&pmid=32326&TS=1178533310&clientId=46002&VType=PQD&VName=PQD&VInst=PRODhttp://proquest.umi.com/pqdweb?RQT=572&VType=PQD&VName=PQD&VInst=PROD&pmid=32326&pcid=12948631&SrchMode=3http://www.cargill.com/products/food/supplychainsolutions.htmhttp://www.tetrapak.com/http://proquest.umi.com/pqdweb?RQT=325&npc=6&pmid=65888&TS=1178131495&clientId=46002&VType=PQD&VName=PQD&VInst=PRODhttp://proquest.umi.com/pqdweb?RQT=325&npc=6&pmid=65888&TS=1178131495&clientId=46002&VType=PQD&VName=PQD&VInst=PRODhttp://proquest.umi.com/pqdweb?RQT=325&npc=6&VType=PQD&VName=PQD&VInst=PROD&pmid=65888&pcid=34266931&SrchMode=3http://www.wbd.com/http://www.danone.com/http://proquest.umi.com/pqdweb?RQT=318&pmid=11290&TS=1179676205&clientId=46002&VType=PQD&VName=PQD&VInst=PRODhttp://proquest.umi.com/pqdweb?RQT=318&pmid=32326&TS=1178533310&clientId=46002&VType=PQD&VName=PQD&VInst=PRODhttp://proquest.umi.com/pqdweb?RQT=572&VType=PQD&VName=PQD&VInst=PROD&pmid=32326&pcid=12948631&SrchMode=3http://www.cargill.com/products/food/supplychainsolutions.htmhttp://www.tetrapak.com/http://proquest.umi.com/pqdweb?RQT=325&npc=6&pmid=65888&TS=1178131495&clientId=46002&VType=PQD&VName=PQD&VInst=PRODhttp://proquest.umi.com/pqdweb?RQT=325&npc=6&VType=PQD&VName=PQD&VInst=PROD&pmid=65888&pcid=34266931&SrchMode=3


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2006

[29.] Wal-Mart expansion should focus on Russia report, cee-foodindustry.com, October25 2004

[30.] Difference that Russians enjoy Profile McDonalds. Neil Buckley, Financial Times,London, UK, 16 May 2005

[31.] BBC Country Profile

[32.] Western Retailer. Progressive Grocer. Larry Shaeffer, Dec 1995

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7 Appendices

Appendix A PESTLE Analysis

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Economic


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Social


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Technological

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Legal

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Environmental

Source: Exploring Corporate Strategy 6

Political

Fact

Money laundering is still rife 6

Vladimir Putin is not standing for re-election when his term expires in September 2007 6

Russia is likely to enter into the WTO by 2008 6

Increasing statism in economic policy is hindering growth 6

The slow pace of institutional change (and other factors) will lead to decreasing of

growth economy 6 Over regulation, uncertainty and corruption remain serious problems. 6

War with Chechnya; bomb attacks from Chechen militants in Moscow and other cities 6

Economic

Fact

Russias economy is powering ahead, GDP up 6.3% in 2006, predicted up further 6%2007. 6

Driving away from resource-driven export economy towards domestic demand for goodsand services 6

Steady growth in household income and rapid growth in consumer financing (Incr of11% in personal consumption = incr of 80% of GDP) 6

The Top 5 players in the food industry only control 8% of the market, due tofragmentation still. 6

Market opening up to Western conglomerates 6

Western Companies investing in Emerging Markets such as Russia, despite still relativevolatility 6

Lending to individuals increased by 85% in 2005 6

Global emerging market correction slowed Russias market by 7% after its boom in 2006of up 70%. 6

GDP expected to rise Annually by 5% until 2011. 6

Consumer Price inflation at 9.7% in 2006, 8.8% in 2007. 6

Demographic decline will present growing economic and labour-force challenge. 6 In 2005, the Russian grocery market equalled about US$ 144.2 billion, making Russia

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the 5th largest market throughout continental Europe. 6

It is estimated that the grocery market will account for US$ 186 billion by 2010. 6

Due to rising wages, which are predicted to grow by 48% by 2009, per capita consumerspending will increase by 75% to approximately US$ 4,600. 6

About 30% of food is sold via hyper- and supermarkets. Their number exploded from

8,991 in 2003 to 20,524 in 2006 and is set to overtake traditional distribution channelssuch as open markets. 6

Russian consumer market continues to grow, helped by decreasing inflation andconsistent growth in GDP, as well as rising personal and disposable income levels,declining unemployment and developing western lifestyles, more companies areexpected to take an interest, making market entry within the next year vital for Wal-Martif it is to stay ahead of the competition. 6

Estimates that Russian market is worth around 108.8 billion, making it the fifth largestmarket in Europe, behind Germany, France, the UK and Italy," said the IGD chiefexecutive Joanne Denney-Finch, "It is a developing market that offers large-scalegrowth opportunities. 6

Modern retail chains (hypermarkets, supermarkets and discounters) growing fast. Their

share of the market accounted for around 30% in 2006. 6 The top 5 grocery retailers by net grocery turnover in 2005 were Metro Group (Metro,

Real), Tander (Magnit), X5 Retail Group (a consolidation of Pyaterochka Holding andPerekriostok), Auchan (Auchan, Atak) and Uniland Holding (Dixi, Megamart). 6

Russia's largest food retailer Pyaterochka announced its merger with supermarket chainPerekriostok, creating a true retail heavyweight that--with 880 stores and US$2.4bn insales--has the muscle to expand nationally to the untapped regional markets beyond theurban centres. 6

Social

Fact Russia is not only angry, but dying: the population is shrinking by around 750,000 per

year, a drop mostly driven by the catastrophic rate of death--by violence, heart disease,tuberculosis and, increasingly, AIDS--among working-age men. 6

Government limiting immigration (only allowing 6Mn permits this year) 6

In 2006, only 28% of food was sold through supermarkets. Predicted that by 2010, 45%will be sold there. 6

Small but growing middle class 6

129 Macdonalds retaurants in Russia in 36 cities. There are more customers per storein Russia than any other country. 6

Labour force 73.88 million 6

17.8% of pop below poverty line 6 400 daily newspaper titles; regional press strong. 6

Predictions that the population will decrease by 10 million over the next 10 years. 6

Russia is a huge consumer market with a population of 142 million. Urban Russiaaccounts for 73% of the total population, containing 85% of all purchasing power. 6

The Russian grocery market is highly fragmented and there is no retailer covering ordominating the whole country. The top 25 retailers, out of which there are currently only6 international players reached a combined market share of only 9.2% in 2005.apopulation that is becoming more affluent and a middle class that is growing steadily,consumers will increasingly equate high prices with high quality. 6

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Technological

Fact

Main communications across Russia are by air and rail. Road system not welldeveloped. 6

Nearly 1Mn km of roadways 6

Retail market has developed faster than the infrastructure needed to support it, meaningthat delivery reliability is poor. 6

low level of technology and time-worn operational methods. 6

Legal

Fact

It takes 2 years to get permits to set up companies in Russia, so barrier to entry for newsuppliers. 6

Import tariffs can vary from 5 to 20%, depending on the product and its origin. 6

Land in Russia is also taxed by the local

authorities, and prices have risen dramatically over the last few years. Duties in centralMoscow are as high as $2,000 a month per square metre, and as a result, somecompanies (such as Auchan) have positioned their stores outside the city limits. Here itis the Moscow regional (rather than municipal) authorities, which levy duties, and therates are a far more reasonable $880 per square metre. 6

Environmental

Fact

Wide natural resource base oil, gas, coalAgricultural pollution, soil contamination from chemicals, radioactive contamination,groundwater contamination from toxic waste, abandoned stocks of obsolete pesticides.Much of country lacks proper soils and climates (either too cold or too dry) foragriculture. 6

Government has illicit crop eradication programme. 6

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Appendix B WBD Sectors

What sectors does WBD operate (or potentially) operate in?

Dairy

traditional products

yogurt and dairy desserts

health orientated enriched products

Cheese products

Drinks

produced from juice concentrate

traditional berry-juice-based drinks

Other juice-based drinks

Mineral water

Baby food

liquid dairy for infants

powdered formula and cereal

fruit & veg purees and juice for infants

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Appendix C Five Forces Analysis Russian Dairy, Drinks and Baby Food

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Buyers


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Substitutes

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Suppliers


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Competitive Rivalry

Threat of

entry

Bargaining

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Threat of

substitutes

Bargaining

power

Source: Exploring Corporate Strategy 6

Potential entrants

Economies of scale is there a critical mass of business required in the Russian market for

viability? Low production costs is a driver6. Need good distribution channels what is

potential for buying/merging with existing distribution? WBD owns its distribution network

and has increased product range to fully exploit it 6, and is seeking further control overdistribution 6.

Experience WBD has experience in sector with established relationships with buyers and

suppliers.

Is there a threat from overseas companies operating at lower costs? The trend has been for

international companies to set up local production facilities in Russia 6. Unlikely as Russia

has the potential to be self-sufficient, thereby putting price pressures on importers 6.

Would WBD retaliate to try and prevent new companies entering the market? WBD could

price aggressively with importers due to its reduced cost base of local production, supplies

and distribution (and its ability to share facilities across its product range), although might

struggle to do this with global companies having in-country production facilities and other

Russian competitors.

What is the threat of government action if WBD grows its market position, and how would

government react to global companies trying to enter the Russian market? The use of

franchising is an industry standard for market expansion, but there is some concern over

Russian franchise legislation which is making Russia potentially less attractive than other

countries 6.

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Suppliers

Conditions for high supplier power are where there is a concentration of suppliers; switching

costs between suppliers are high; and there is the possibility of forward integration, ie.

suppliers decide to compete with buyers. This is not the case with the Russian Dairy sector

where supplies are unreliable (see K). Furthermore , the Russian climate, problems with

logistics and availability of local food processors creates a barrier to entry for new entrants 6.

The Russian juice sector is highly reliant on imported ingredients 6. For juice concentrate,

WBD is supplied by the worlds largest provider (Cargill) which puts WBD in a relatively

weak position although Cargill is keen to improve supply chain management for its clients

which is a statement of positive intent 6 and there is no evidence that Cargill wishes to

compete directly with food processing companies. WBD also uses Tetra-Pack packaging

which again makes them reliant on a dominant supplier. Despite its dominance, Tetrapak

(like Cargill) appears not to move into the food processing industry and is keen to work with

its clients for mutual benefit 6.

Substitutes

Is there a threat from new dairy products replacing existing range, or alternatively what is the

likelihood of convergence either between product types or the dairy sector with other sectors

(eg juice)? Are there any products from other sectors that could potentially compete with

dairy? Increasing affluence is creating a substitution affect on home cooking from a growing

market for eating out and pre-prepared food. There is increasing emphasis on healthy

alternatives which is increasing demand for products focussing on bio, vitamins, low-fat and

childrens products 6.

Buyers

Conditions for high buyer power include a concentration of buyers, eg. small number of

supermarket retailers squeezing milk suppliers. As the number of supermarkets is growingrapidly (see A), this reduces the potential for supermarket power. However the picture in the

Russian supermarket sector is changing; although the number of supermarkets is growing

rapidly, there has been merger and acquisition activity, such as between the two leading

supermarkets Pyaterochka and Perekryostok 6. There is potential for strong buyer power if

this trend continues. Switching costs between suppliers are relatively low. There is the

possibility of backward integration, ie. supermarkets set up in competition with or acquire -

the supplier. In the case of the Russian Diary sector, WBD has a track record of acquisition

of regional dairies.

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Competitive rivalry

How competitive is the sector? Are there any other competitors of similar size to create

potential for competition? Or are there one or two dominant organisations in the sector

making it less competitive? Some of the bigger global food companies are looking at

growing markets, including Russia, such as Danone 6. The Russian Food sector is growing

(see K); WBD would expect therefore some growth as a result of this. WBDs main

competitor for traditional dairy Unimilk is active in acquiring dairies and investing in

technology. Other competitors in Dairy include Russian company Petmol, and international

companies Ehrmann, Danone, Parmalat and Campina. The Drinks sector has a number of

major local players who dominate 85% of the market [10]. In the Baby food sector, WBD

competes with global companies Nestle and Nutricia in addition to Russian companies

Unimilk and Lebedyansky (one of the leaders in Russian baby food market and the largest

juice producer in Eastern Europe) (see F). Nestle is seeking growth in the Russian baby

food sector as is Swedish company Semper (see F). This competitive environment is

resulting in innovations in packaging, quality and branding 6. WBD has held take-over talks

with Danone in the past and Danone has a reported stake of 7% in WBD 6.

5 Forces conclusions

As growing sectors, Dairy, beverage and baby food sectors are attractive to companies and

offer the potential for significant growth 6. The sectors can be segmented into two sub-

groups: companies that are global, and Russian, where differing sets of forces apply. A

dominant force is the unique Russian context acting as a barrier to entry for international

companies where new entrants need knowledge of, and experience in, the Russian market

and there has been mixed success with franchising as a means to expand into Russia,

although there are signs that this is changing 6. A trend for international companies has

been to establish production facilities in Russia 6.

The need for good distribution and regional suppliers acts as a barrier to entry. The potential

buying power of major retailers can put pressure on dairy producers, with the potential formore backward integration (such as the acquisition of regional dairies). There is also a

dominance in the market of supplying juice concentrate (by Cargill) and packaging (by

Tetrapak) which puts them in powerful positions although there is no indication that they are

exploiting this position, but could make it difficult to drive down prices in these areas..

Changes to the main drivers could occur through developments in the supermarket sector

(eg further mergers and acquisition). This could lead to further backward integration from

supermarkets acquiring their own production capability. An increased demand forpremiumisation could put pressure on Russian companies to improve quality due to the

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perception that international companies offer higher quality 6. A shift to more eating out will

also see growth in the restaurant/caf/and pre-prepared food sector, and there is a growing

demand for health, bio and low fat products.

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Appendix D WBD Resources

Physical

24 manufacturing facilities linking dairy and juice production in 20 cities in Russia

and CIS in the most resource-rich areas for milk production 6

Its own distribution centres in 26 cities in Russia and abroad providing access to

local markets 6

Relationships with 2000+ shops in Moscow 6

Financial resources

Access to funding as a floated company on the NYSE 6

Human resources

21,000 staff with knowledge of the Russian market including an experienced

management team (many senior managers from competitors) 6

Intellectual capital

1100 types of dairy product 6

170 types of juice product 6

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Appendix E WBD Market Segmentation

WBD Segmentation Dairy6

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WBD Segmentation Juice6

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Appendix F WBD Markets, Market Share & Competition

Source: WBD Memorandum, 6

Market Market Share,2006

Competition

Dairy Traditional Dairy 29% local producers, such as

Unimilk

smaller producers in other

regionsEnriched Dairy 28% Danone, PetmolDesserts & Yogurt 41% Danone

Campina

Ehrmann

(all continuing to invest inRussia)

Drinks Juice 19,4%

Together thelocal playerscontrol 85%

Lebedyansky (Lipetsk

region)

Multon (St. Petersburg,

owned by Coca-Cola)

Nidan (Novosibirsk)Mineral Water Fragmented

marketPepsis Aqua Minerale

Coca-Colas BonAqua

Borzhomi

Narzan

Saint Springs

BabyFood Liquid Dairy for Infants leader Unimilk (Russian)

Powdered Formula & Cereal Nestl

NutriciaFruit & Veg. Purees andJuice for infants

Lebedyansky

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Appendix G Relative Strengths of WBD and Top 10 Global Leaders in Food

Company Strengths

Wimm Bill Dann Manufacturing facilities across Russia and CIS in the most resource-richareas.

Distribution centres provide access to local markets and 2000+ Moscowshops.

Access to funding as a floated company on the NYSE enablesinvestment in innovation.

21,000 staff with Russian market knowledge.Strong dairy and juice brands.

Management team focusing on value and driving down costs. (KWBDSWOT Analysis)

CadburySchweppes

Strong performance in beverages and confectionery.Exceptional performance by Adams.

Performance of US beverages. 6

Danone Market leadership.Vast geographical presence.Improved operational efficiency.

Innovative product launches. 6

General Mills Brand name and market leadership.

Strong financial performance and consolidation of businesses.Successful acquisition and joint venture strategies. 6

Heinz Market leadership.Strong brand name stretching across many products.

Wide range of products.Competitive return on assets and equity. 6

Kellogg Leading market position.High brand equity.Consistent performance. 6

Kraft Market leadership.

Strong brand portfolio.Wide range of products.

Active in worldwide markets. 6

Mars Strong brand name.

Wide product portfolio.Global market presence. 6

Nestle Leading market position.

Improvement in overall profitability.Well-diversified business portfolio.Strong brand equity. 6

PepsiCo Robust growth.Leading brands.

Powerful go-to market systems. 6

Unilever Brand name and market leadership.

Growth in emerging markets.Strong R&D focus. 6

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Appendix H Russian Consumer Values

Quality 6

Packaging handling, size (volume), design/visual appeal (foreign name),

portability 6

Branding image, statement about current or desired lifestyle (psychological

factors), uniformity & clarity (4Cs) 6

Value-for-money 6

Price 6

Novelty 6

Innovation 6

Health benefits additives (bio, vitamins), low-fat, high-fibre 6

Convenience drinkable, spoonable (including spoon), combination products (food

& health) 6

Location, accessibility, availability (distance to travel) 6

Regional differences in tastes and habits 6

Local brands (more important in country than city) 6

Preference for local products as perceived to be healthier and better value for

money 6

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Appendix I Stakeholder Analysis

High PowerLow Interest

High PowerHigh Interest

End User ConsumersGovernment

Strategic CustomersWBD ShareholdersSuppliers

WBD EmployeesCompetitors

Low PowerLow Interest

Low PowerHigh Interest

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Appendix K WBD SWOT Analysis

STRENGTHS

Occupy leadingposition in the market 6, 6, 6

EstablishedBrand in Russia 6, 6,

High qualityproducts 6, 6

Diverse productbasket 6

Understandingof Russian Market 6

Survivors,prospered during the financial crisis dueto being the local producer, when importsstruggled due to the weakness of theRouble 6

Entrepreneurialmanagement: rented a production line inan existing factory to get started. 6

Ambitious,experienced new people from outside thecompany hired for leading positions 6

WEAKNESSES

Lack ofrecognition abroad 6

Lack ofnetworks and contacts in foreign markets

Lack of internal

innovation reliance on M&A for newproducts 6, 6,6

Reliance on(primitive) dairy farmers 6

Russian climate

limits fruit supply to certain seasons

Internallyfragmented 6

Weak financialreporting 6

Finding & hiringqualified personnel in growing market 6

OPPORTUNITIES

Diversificationinto higher value segments, e.g.premium-range yoghurt, yogurt drinks,dairy deserts, soft drinks (e.g. sparking,flavoured water) 6, 6

Diversification

into growing market for Baby & childrensfood 6

Diversificationinto non-directly related fields, e.g. ice-cream, chocolate, tea 6

Acquisition ofother dairies to get geographicalcoverage 6

M&A in waterto gain consolidated market 6

Improve the

THREATS

Unreliable,insufficient local supplies of milk 6

World-widereduction in milk-supply 6

Regulation ofmilk supply in Russia 6

Margins fordairy under pressure due to increase inraw milk prices 6

Price-sensitiveconsumers may start to prefer low-cost/low margin juice & nectar6

Increasing localcompetition in all sectors (Lebedyansky)6, F

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supply chain (logistics, JIT delivery, orderintake, IT)

Operationalefficiency improvements (at dairies) 6

Changing

market, increasing distribution throughsupermarkets (strategic customers) (A)

Low wages 6

Abundantnatural resources. E.g. gas

Joint venture,e.g. with Danone or Pepsi Co. to gaincapital and distribution 6

GrowingRussian Market for dairy, baby food,water, drinks, confectionery 6, 6

Growingupper/middle class, greater supply ofmoney available 6, 6

Increasinghealth consciousness 6, 6

Increaseddemand for premium products 6

Competitionfrom foreign Multinationals, e.g. Nestl,Danone producing locally (increaseddemand for milk, lower costs of locallyproduced products decreased

profitability for WBD) 6

Increased priceof fuel could impact transportation costs& profitability 6

Increased costof petroleum-based products may impactcost of packaging 6

Politicaluncertainty 6, 6

Changeableregulatory environment 6,6

Corruption andcrime 6

Underdeveloped Russian banking system 6

Unstablecurrency & exchange rate 6

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Appendix L Strategic Option Generation TOWS

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STRENGTHS WEAKNESSES

S1: Occupy leading position in the market W1: Lack of recognition abroadS2: Established Brand in Russia W2: Lack of networks and contacts in foreign marketsS3: High quality products W3: Lack of internal innovation and reliance on M&A for new productsS4: Diverse product basket W4: Reliance on (primitive) dairy farmersS5: Understanding of Russian Market W5: Russian climate limits fruit supply to certain seasonsS6: Survivors, prospered during the financial crisis due to being the local producer, when

imports struggled due to the weakness of the Rouble

W6: Internally fragmented

S7: Entrepreneurial management: rented a production line in an existing factory to get

started.

W7: Weak financial reporting

S8: Ambitious, experienced new people from outside the company hired for leadingpositions

W8: Finding & hiring qualified personnel in growing market

O1: Diversification into higher value segments, e.g. premium-range yoghurt,

yogurt drinks, dairy deserts, soft drinks (e.g. sparking, flavoured water)

O2: Diversification into growing market for Baby & childrens foodO3: Diversification into non-directly related fields, e.g. ice-cream, chocolate,

teaO4: Acquisition of other dairies to get geographical coverageO5: M&A in water to gain consolidated marketO6: Improve the supply chain (logistics, JIT delivery, order intake, IT)O7: Operational efficiency improvements (at dairies)

O8: Changing market, increasing distribution through supermarkets(strategic customers)O9: Low wages

O10: Abundant natural resources. E.g. gasO11: Joint venture, e.g. with Danone or Pepsi Co. to gain capital and

distributionO12: Growing Russian Market for dairy, baby food, water, drinks,

confectioneryO13: Growing upper/middle class, greater supply of money available ,O14: Increasing health consciousnessO15: Increased demand for premium products

T1: Unreliable, insufficient local supplies of milkT2: World-wide reduction in milk-supply

T3: Regulation of milk supply in RussiaT4: Margins for dairy under pressure due to increase in raw milk pricesT5: Price-sensitive consumers may start to prefer low-cost/low margin juice

& nectarT6: Increasing local competition in all sectors (Lebedyansky) ,T7: Competition from foreign Multinationals, e.g. Nestl, Danone producing

locally (increased demand for milk, lower costs of locally produced products

decreased profitability for WBD)T8: Increased price of fuel could impact transportation costs & profitability

T9: Increased cost of petroleum-based products may impact cost of

packagingT10: Political uncertainty ,T11: Changeable regulatory environment ,

T12: Corruption and crimeT13: Underdeveloped Russian banking system

T14: Unstable currency & exchange rate

Internal Factors

External Factors

Option 8: Offer low-price range of products so as not to neglect price-sensitive

customers (S1, S4, S5 : T5)

Option 7: Leverage strong position, understanding of market dynamics and

established relationships to build stronger alliances and partnerships with dairiesand fruit suppliers to offset potential shortages and price increases, thus lowering

costs to increase competitive postition vis-a-vis other local & international

manufacturers. (S1, S5, S6, S8 : T1 - T4, T6, T7)

Option 6: Address market trend towards health and supplements using strong brandposition and (perception) of quality products. (S1-S3 : O14)

Option 1: Utilise market position & knowledge to diversify into higher value segments(premiumisation, baby-food, ice-cream, confectionery, ...) (S1-S5 : O1-O3, O12, O13,

O15)

Option 2: Build on experience in acquisitions to further buy-in and grow market share

to growing water market (S8 : O5)

Option 3: Improve operations and introduce cost savings by upgrading dairy andfruit plants and streamlining logistics process. Further acquisitions to improve

geographic coverage and reduce transportation distances. (S6, S8 : O4, O6-O7)

Option 5: Sell current market position & knowledge to interested multinational to gaincapital and experience (JV or sale) (S1, S2, S5 : O11)

Option 4: Leverage understanding of market and its dynamics to build relationships

with strategic customers such as growing supermarket chains, possibility of "own

brands" (S5, S7, S8 : O8)

Option 10: Build political connections to influence regulations and reduce impact ofpolitical uncertainty. Build good corporate governance and ethics into business and

use influence to spread best practise through the market/politics. (S5 - S8 : T10 - T12)

Option 14: Overhaul operations & logistics, thereby restructuring internally and fully

utilising available resources and competencies. Build new competencies inoperations & logistics as competitive differentiator. (W6, W8 : O6, O7, O9)

Option 13: Sell out to multinational who would restructure management &

organisation to reduce fragmentation and inefficiencies while opening doors tointernational markets (W1, W2, W6, W7 : O11)

Option 11: Overcome the lack of innovation culture by developing new products toaddress diversification trend. Build R&D division with view to branching out into new

product groups (e.g. ice-cream) (W3: O1-O3, O12, O14, O15)

Option 12: Acquisition or JV with dairies and fruit producers, either in Russia or

neighbooring countries to reduce reliance on poor Russian producers and climate

(W4-W5 : O4)

Option 15: Build innovation culture by developing products with less reliance on milk

and fruit as raw materials. (W3 : T1 - T4)

Option 16: Develop relationships with international packaging suppliers to takeadvantage of best possible prices for packaging and reduce costs. (W2 : T9)

Option 17: Build strong internal structures and culture (develop culture of openness,

trust, ethics, innovation, and good corporate govenance) to better cope with external

threats. By doing so become a company Russians want to work for, thus attracting

qualified workforce. (W3, W6-W8 : T10-T14)

Option 9: Focus on logistics and packaging concepts to offset rise in transportation

and packaging costs, at the same time improving overall cost position. (S6-S8 : T8,T9)


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Strategic Option Generation Ansoff Matrix

The Ansoff Matrix used for the identification of possible directions and options available toan organisation for future strategic development 6.

Products

Markets

Existing Existing

Protect and buildNew

Product Development

Theory:The strategy is concerned with gaininga greater proportion of the currentmarket through two ways:consolidation (downsizing andmaintenance) or Market penetration(gaining market share)

Theory:This strategy is when an organisationdelivers modified or new products toexisting markets through either existingor newly acquired capabilities.

Option 18

WBD to withdrawal from one or moreof their less profitable sectors(beverage/baby food) by marginalisingtheir 1000 product range and bykeeping products than are identifiableby the consumer and have a lengthyproduct life cycle.

Option 26

Through internal research anddevelopment develop a new productwithin the Russian consumer marketthat competes with competitors thatmakes WBD an attractive futureacquisition target. For examples -confectionery (Cadbury Schweppes), icecream (General Mills), tea/coffee(Nestle), organic (Heinz), biscuits(Danone)

Option 19:

Greater emphasis on increasepromotional spend within themarketing mix (research,communication, advertisement, salespromotion) of key products to generalpublic to increase product awarenessand brand identification.

Option 27

Could also continue with mergers andacquisitions in new product sectors(Chocolate, ice cream, biscuits) wherethey already have regional presenceand infrastructure.

Option 20Market is growing therefore attractinginternational organisations and insome regions the market is saturated,so WBD could focus more on the

regions with poor market coverage.

Option 28WBD to respond quickly to changingconsumer demands for healthier, on-the-go, pre-prepared foods throughincreased investment in R&D because

most competitors will be adapting newproduct ranges.

Option 21:Strengthen current market byincreased rate of acquisition ofDairy/Beverage/baby food companies.

Option 29WBD to forge working partnerships withglobal company with bigger R&Dcapability to help increase and improveproduct development in the currentmarkets.

Option 22.WBD to focus on building links andpartnerships with strategic customers

such as supermarkets (better clientmanagement).

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Products

Markets

New Existing

Market DevelopmentNew

Diversification

Theory:A strategy in which an organisationwould offer existing products in newmarkets. This will be determined by thecurrent market coverage and theorganisations capability for marketexpansion.

Theory:A high-risk strategy in which theorganisation moves away from theircurrent market and products andattempts to generate growth throughdifferent means. It requires theorganisation to have the capability,capacity and knowledge to make thisstrategy successful.

Option 23Take existing product range into newgeographical areas (Eastern and

Western European countries with nocurrent presence)

Option 30Using the strong distinctioncompetencies of WBD (great people

making good acquisitions), buy healthand leisure clubs in Europe/Americaand develop a company essence thatcommunicates health, fitness andlifestyle.

Option 24WBD to target most consumersegments by developing links withstrategic customers like cafes,(starbucks) restaurants, largeinstitutions (schools, universities, public

sector, corporate environment)

Option 31Continue to build and strengthenlogistics & distributionprocesses/competencies and becomeprovider of logistics solutions to otherbusinesses.

Option 25WBD to offer their current product lineas the own label brand for majorsupermarkets.

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Appendix M Options to be considered

Options with numbers (Option 1) are taken from TOWS and Ansoff Matrices (L, Error:Reference source not found). Options with letters (Option A) are combinations of choices forconsideration.

OPTIONS REASONING

Option A: Marketing. Address trends, increasemarketing spending.

Marketing option. Fits withidentified marketing trends, 5Forces, PESTEL. Requiresclear definition and addressingof market segments.

Option 1: Utilise market position & knowledge to diversifyinto higher value segments (premiumisation, baby-food,ice-cream, confectionery,...) (TOWS)

Option 6: Address market trend towards health andsupplements using strong brand position and (perception)of quality products. (TOWS)

Option 8: Offer low-price range of products so as not toneglect price-sensitive customers (TOWS)

Option 18: WBD to withdrawal from one or more of theirless profitable sectors (beverage/baby food) bymarginalising their 1000 product range and by keepingproducts than are identifiable by the consumer and havea lengthy product life cycle. (Ansoff)

Option 19: Greater emphasis on increased promotionalspend within the marketing mix (research,communication, advertisement, sales promotion) of keyproducts to general public to increase product awareness

and brand identification. (Ansoff)Option 21: Strengthen current market by increased rate ofacquisition of Dairy/Beverage/baby food companies.(Ansoff)Option 28: WBD to respond quickly to changingconsumer demands for healthier, on-the-go, pre-preparedfoods through increased investment in R&D becausemost competitors will be adapting new product ranges.(Ansoff)

Option B: Regions. Increase Russian-wide marketshare.

Option 20: Market is growing therefore attractinginternational organisations and in some regions themarket is saturated, so WBD could focus more on theregions with poor market coverage. (Ansoff)

Option C: Innovation. Increased R&D. Innovation &new competencies.

Addresses more than justmarketing and economics (5F).This option focuses ondeveloping distinctivecompetencies to ensure futurecompetitiveness.

Longer-term focus, requiresculture change (this mightcause it to be eliminated in the

Option 11: Overcome the lack of innovation culture bydeveloping new products to address diversification trend.Build R&D division with view to branching out into newproduct groups (e.g. ice-cream) (from TOWS)

Option 15: Build innovation culture by developingproducts with less reliance on milk and fruit as raw

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materials. (from TOWS)first pass). But leave inbecause of focus oncompetencies.

Option D: New Products. Development of newproducts for existing market.

Option 26Through internal research and development develop anew product within the Russian consumer market thatcompetes with competitors that makes WBD an attractivefuture acquisition target. For examples - confectionery(Cadbury Schweppes), ice cream (General Mills),tea/coffee (Nestle), organic (Heinz), biscuits (Danone).(Ansoff)

Option 27: Could also continue with mergers andacquisitions in new product sectors (Chocolate, icecream, biscuits) where they already have regionalpresence and infrastructure. (Ansoff)

Option E: JV. R&D partnership with multinational.

Option 29: WBD to forge working partnerships with globalcompany with bigger R&D capability to help increase andimprove product development in the current markets.(Ansoff)

Option F: Operations & Logistics. Operationsimprovements, new competitive advantage.

There is always potential forimprovements in operations &logistics. Particularly in acountry the size of Russia.

This option allows building

competitive advantage (beingvery good at distribution) thusbuilding a barrier to entry (5F).Also builds distinctivecompetency.

A company with excellentoperations & logisticsprocesses in a country the sizeof Russia is also a moreinteresting acquisition target orJV partner for a non-Russianmultinational, i.e. making WBDmore attractive for future sale.

Option 3: Improve operations and introduce cost savingsby upgrading dairy and fruit plants and streamlininglogistics process. Further acquisitions to improvegeographic coverage and reduce transportationdistances. (from TOWS)

Option 9: Focus on logistics and packaging concepts tooffset rise in transportation and packaging costs, at thesame time improving overall cost position. (from TOWS)

Option 14: Overhaul operations & logistics, therebyrestructuring internally and fully utilising availableresources and competencies. Build new competencies inoperations & logistics as competitive differentiator. (fromTOWS)

Option 16: Develop relationships with internationalpackaging suppliers to take advantage of best possibleprices for packaging and reduce costs. (from TOWS)

Option G: Strategic Partnerships. Build relationshipswith supermarkets, own branding.

Focus on strategic customers also builds competencies.Moving position on thestrategic clock.

Option 4: Leverage understanding of market and itsdynamics to build relationships with strategic customerssuch as growing supermarket chains, possibility of "ownbrands" (from TOWS)

Option 22: WBD to focus on building links and

partnerships with strategic customers such assupermarkets (better client management). (Ansoff)

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Option 25: WBD to offer their current product line as theown label brand for major supermarkets. (Ansoff)

Option H: Strategic Customers. Build supplierrelationships with restaurants,

Option 24: WBD to target most consumer segments by

developing links with strategic customers like cafes,(starbucks) restaurants, large institutions (schools,universities, public sector, corporate environment).(Ansoff)

Option I: M&A. Growth through further acquisitions. Continuation of currentbusiness idea /strategy.

Option 7: Leverage strong position, understanding ofmarket dynamics and established relationships to buildstronger alliances and partnerships with dairies and fruitsuppliers to offset potential shortages and priceincreases, thus lowering costs to increase competitiveposition vis--vis other local & international

manufacturers. (from TOWS)

Option 12: Acquisition or JV with dairies and fruitproducers, either in Russia or neighbouring countries toreduce reliance on poor Russian producers and climate(from TOWS)

Option J: Sale. Immediate sale of WBD tomultinational.

Option expressed by expertopinion (Ian).

Increasing size of WBD couldmake it target for politicalinterference. Sale to multi-

national may reduce thisimpact (PESTEL).

Option 5: Sell current market position & knowledge tointerested multinational to gain capital and experience(JV or sale) (from TOWS)

Option 13: Sell out to multinational who would restructuremanagement & organisation to reduce fragmentation andinefficiencies while opening doors to international markets(from TOWS)

Option K: Diversification. Become Russian logisticsprovider.

Option 31: Continue to build and strengthen logistics &distribution processes/competencies and becomeprovider of logistics solutions to other businesses.(Ansoff)

Other initially identified options were not considered. Primary reasons being that a timeframe of 5 years was considered too short for their implementation, there was a severe lackof competencies or the option was too radical a change from the current strategy or culture.

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Appendix N Option Evaluation Suitability

All options were scored according to their impact on the identified Key Issues (seeKey Strategic Issues and Constraints (200 words)). Scoreswere -3 to +3, where +3 represents a highly positive interaction and -3 a highly negative interaction. No relationship or impact scores 0.

OptionsOption A Option B Option C Option D Option E Option F Option G Option H Option I Option J Option K

Key Issues

Politics 20% -0,7 -1,0 -0,5 -0,5 -1,3 0,7 0,3 0,3 -1,0 0,8 -0,3

Economy 20% 2,7 1,7 1,7 2,2 1,7 1,5 2,0 1,7 1,5 -0,2 1,5

CompetitiveSituation 20% 2,3 0,2 2,0 2,7 2,0 2,3 2,3 1,5 1,5 1,7 -0,2Marketing /Food & DrinkTrends 20% 2,7 1,3 2,2 2,7 2,3 0,5 1,3 2,2 1,8 0,5 -0,5

Raw Material &Logistics 20% -0,3 -0,8 0,7 -0,2 1,2 2,3 1,3 1,0 1,3 1,3 2,0

Average 1,3 0,3 1,2 1,4 1,2 1,5 1,5 1,3 1,0 0,8 0,5

Options A, D, F, G, H chosen for further consideration Stakeholder Evaluation, see O.

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Option Evaluation - Suitability

-2,0

-1,5

-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Politics Economy Competitive

Situation

Marketing / Food &

Drink Trends

Raw Material &

Logistics

Sum

Key Issues & Constraints

Option A

Option B

Option C

Option D

Option E

Option F

Option G

Option H

Option I

Option J

Option K

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Appendix O Option Evaluation Stakeholder Expectations

Remaining options were ranked 1-5 by importance to different stakeholder groups, where 5is highest impact/importance and 1 is lowest.

Options Option A Option D Option F Option G. Option H

Stakeholders

StrategicCustomers(Supermarkets) 1 2 3 5 4WBD Employees

4 5 3 2 1WBD Shareholders

2 1 3 5 4

End UserConsumers

3 5 4 2 1Suppliers

2 1 5 4 3Sum

12 14 18 18 13

Options F & G received identical high scores for both suitability and stakeholderexpectations.

Documents

SAE Final Report V1