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Fonterra: Meeting local and global needs

Meeting local and global needs

This Case Study looks at New Zealand's largest company, Fonterra. It discusses its importance as a producer, manufacturer and marketer of dairy products. It reviews the firm's response to shifts in both global and domestic markets.

As a result of carefully reading this Case Study, students should be able to:

  • Understand the difference between the local and the global marketplace
  • Define a co-operative and explain how it differs from other types of business organisation 
  • Discuss the importance of brand recognition
  • Explain how an integrated business operates 
  • Discuss the challenges for Fonterra and its strategy for the future.

Introduction

Fonterra is New Zealand's largest company and a leading international dairy company. It is responsible for 20 percent of everything New Zealand exports.

The supply chain

A supply chain traces the production of a good or service through its various stages.

Brands and brand recognition

If you've ever enjoyed a Tip Top ice cream or a glass of Anchor milk or a slice of Mainland cheese then you have enjoyed a Fonterra product.

Developing new products

To meet these trends Fonterra has developed products that will meet the diets of both the West and developing countries.

Strategies for the global market

Today we shop in a global environment. Around the world large retail chains or supermarkets dominate the marketplace.

Demand is changing, who will meet it?

Demand for dairy is growing so fast that a whole New Zealand dairy industry would have to start up every 10 years to meet it.

Implementing strategy

In order to meet the rapid changes in the dairy market Fonterra has a four-platform approach.

Conclusion

Fonterra is one of the most successful co-operatives in the world. It is the sixth largest dairy company by turnover. It is the largest supplier to the globally traded dairy market and New Zealand's largest company.

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Associated with:
Learning Area(s):
  • Business Structure and Organisation | Forms of ownership of large organisations
  • Change Management | Change issues for business
  • Change Management | Managing change effectively
  • Change Management | Strategic planning
  • International Trade | International trade agreements: impact on business
  • Marketing | Product development
  • Operations Management | Materials management
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