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Nov 24, 2024

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Introduction Finland's Valio Dairy Company has a long history of cooperative operations and a wide local distribution throughout Europe. The organization reorganized during the course of the 1980s and the first part of the 1990s in order to become an EU (European Union) member. Considering that joining the EU would require them to give up their protectionist policies and subject them to strong criticism from organizations in other EU member states, joining the EU came to be seen as a significant environmental change that would have a significant impact on every aspect of their business. Senior (2002), cited in Weick and Quinn (1999), states that organizational exchange and edition encompass a range of concepts and theories, from alternative management ideas and strategy literature to popular exchange models and theories. These shifts bring with them new, challenging circumstances and opportunities (Lamprinakis, 2013), and an employer's capacity to change course and adjust to the novel circumstances becomes critical to its long-term viability and financial performance (Lamprinakis, 2013). Problem Statement Eighty years old, Valio is the owner of seventeen dairies that make cheese, butter, and other dairy products. He is aware that the company has become bloated as a result of following exact procedures with several stakeholders (Lamprinakis, 2013). The organization's staff and strategies are outdated and ineffective. Both internal and external factors have contributed to Valio's problems. The business also saw a negative financial impact. They over-hired employees, underinvested in research and development, and were unable to compete since their high-priced goods lacked a low-cost alternative. Clearly, the shift became difficult, and they were forced to cut back and invest in R&D. They also failed to innovate since they lacked a research and
development division. With Finland's EU membership, the market became accessible to other EU organizations, making Valio vulnerable. Valio had little influence over Finland's decision to join the EU. Both internal and external obstacles had to be overcome; protectionist regulations were abandoned due to Finland's political kinship with the EU, leaving the firm open to harsh criticism from groups in other EU nations. In order to remain aggressive, this requires them to rearrange and swap out their organizational structure. In response to new EU issues, Valio offered a series of fixes that addressed both operations and structure. Valio experienced a significant downsizing and streamlining initiative over the previous ten years, which included the closure of dairy factories and sizable employee discounts. In terms of manufacturing, Valio focused more on producing fee-introduced dairy products than bulk dairy products (Lamprinakis, 2017). Root Cause Evaluations Organizational transformation includes assessment of the past, comparison of the present, and forecasting of the ideal future state. The destiny kingdom must be higher than the current one in order to succeed. Any evaluation technique that contrasts the desired future with the current state of affairs can be characterized as transformation. The future state is contrasted with the current kingdom according to the original vision and organizational technique components (Fannin, 2020). Due to its more expensive devices, Finland may open its borders to competition at a lower cost than Valio. Valio also had a "heavy structure," which contained redundant parts and inefficient manufacturing and shipping processes. Possible Alternative Actions
In order to determine where they might have an aggressive advantage, Valio may also evaluate their personal assets, herbal endowments, demand, method, and competitive strategy using the Diamond model (Porter's 5 forces, 2021). Valio can set itself apart from the competitors by employing inexpensive or premium goods. In order to increase product quality or draw in budgets, value management emphasizes product diversification (The Investopedia Group, 2021). Reducing trade barriers between EU member states can result in more business and growth, which is a crucial driver of alternative growth for any organization. What would have happened if Valio hadn't entered B at this point is difficult to predict. But the EU's single market reform will make the intra-European alternative more attractive and Fedi will reap the rewards of lower change-related obstacles. The majority of people will also have comparable ideals. Valio can lower expenses, electricity use, and plant life. They can investigate the shortcomings and possibilities of Finnish products and the past once they've entered the international market. They can spend money on R&D to create new goods like snackable cheese packages, sugar-free, dairy-free, and zero or low-fat cheese. We must form a number of alliances with eateries and cafés around Europe. Suggestions for Action Valion's restructure should include best-in-class upgrades and R&D spending for home-focused sports. Targeting the worldwide market should be the goal while producing paid goods. Valio should prioritize attaining cost efficiencies concurrently by rationalizing and optimizing several production and operational levels. Some blooms need to be closed or decreased even further. Its external efforts, including expanding its advertising and marketing operations, locating and growing new markets, and strengthening its brand, must be directed towards the market in order
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for it to become a member of Europe. To guarantee market penetration and boost sales, organizations need to identify and develop their "natural markets." An instruction manual for carrying out strategic operations successfully The following are essential guidelines for implementing a winning strategy that grows a profitable business, according Ghemawat (1986). i. Blessings that are controversial must be acknowledged. Even marginal returns have a function in preventing competitive disadvantage. ii. The advantages are longer-lasting and less contentious. According to a number of benefits, sustainability is advantageous when the environmental risk is minimal and the rewards are substantial. iii. The same benefits is no longer extended to all industries. Industries with poor growth tend to have bottlenecks in areas that need regulation or technical changes. As a result, in a field where sophisticated technology is widely used, your rivals will not be able to match your talents. iv. Either there must be few rival groups or it must be able to predict long-term financial success. Proactive interventions are appropriate as the industry ages and market trends or access change. Investigate your environment actively. Check to see if any adjustments have made you stronger. Conclusion All of Valio's business endeavors have been equally profitable. Valio has demonstrated excellent flexibility in all funding arrangements while also reducing. Valio is a significant player in the Finnish dairy industry and one of the majorities of businesses in the nation, despite the
reorganization and even the last successful company. In the extra time, they created new products, entered new markets, and after ten years of restructuring and changing the company's strategy (Lamprinakis, 2013). Over the past ten years, Valio has launched a number of projects that link the company's external and internal environments (Lamprinakis, 2013). According to Lamprinakis, mainstream businesses combine effective cost-cutting with investments in innovation and market development through a combination of proactive (funding) and processing (organisational) strategies (He and Wong, 2004; Raisch and Birkinshaw, 2008, in Lamprinakis, 2013). The business rationalized and reduced staff while making investments in R&D and actively seeking out and growing new markets.
References : Lamprinakis, L. (2013). The transformation of Valio: A case study. Journal of Business Case Studies , 9(1), 85-88. http://cluteinstitute.com/ojs/index.php/JBCS/article/view/7549/761 Meyer, A., Brooks, G. and Goes, J. (1990). Environmental Jolts and Industry Revolutions: Organizational Responses to Discontinuous Change. Strategic Management Journal , 11(5), 93- 110. The Investopedia Team. (2021, September 13). Product differentiation is important in today's financial climate. Investopedia. https://www.investopedia.com/ask/answers/062415/why- product-differentiationimportant-toda ys-financial-climate.asp
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