Premium Essay

Fonterra

In: Business and Management

Submitted By yanamazlan
Words 595
Pages 3
1. EXECUTIVE SUMMARY

New Zealand Company, Fonterra Co-operative Group Ltd. is the world’s biggest milk producer as well as one of the best-known international companies. The company operates in New Zealand and it is headquartered in Auckland, NZ. As in July 31, 2012, the company employed 17, 300 people and owned by 10,600 New Zealand farmers. In 2012, the company recorded revenue is NZ$19,769 million in the financial year ended in July.

Fonterra basically markets and distributes milk and milk based product for both industrial and consumer use. Fonterra has become the world’s largest dairy exporter and global leader in dairy nutrition , which posts 95% of its New Zealand-made dairy products to 140 countries since being formed in 2001(“Fonterra’s harsh Chinese”, 2008). Fonterra is also a market leader with their consumer brands in Australia/New Zealand, Asia/Africa, Middle East and Latin America

Fonterra business is based on secure source with high quality milk. They served their customer with a product contain a natural nutrient from the milk itself as a add value of their product. Here, their dairy product set a gold standard for nutrition and there a growing population want the best that they can offer.

Fonterra Milk Scandal
I. Fonterra Background

Fonterra is a global leader in dairy nutrition – the preferred supplier of dairy ingredients to many of the world’s leading food companies. Fonterra is also a market leader with their consumer brands in Australia/New Zealand, Asia/Africa, Middle East and Latin America.

The farmer-owned New Zealand co-operative is the largest processor of milk in the world, producing more than two million tonnes of dairy ingredients, value added dairy ingredients, specialty ingredients and consumer products every year. Drawing on generations of dairy expertise, Fonterra is one of the largest investors in dairy...

Similar Documents

Premium Essay

Case Study Fonterra

...Excersise 1 : case FONTERRA 1. Fonterra’s shareholders and key stakeholders Fonterra´s most important shareholders are farmers who own the business and who are suppliers at the same time and the only way how to become a shareholder is to become a supplier. The share of every each farmer depends on the quantity of milk they supply (Knott 2014). Key stakeholders of Fonterra company are New Zealand´s economic markets as a whole, because economics of the company also influences the economics of New Zealand owing to high contribution in export revenues. Also Fonterra controls very high proportion of a liquid milk in domestic markets as well as some other dairy products which has significant impact on a price. Another stakeholders are connected to environmental which is affected by a firm. As a major water consumer and potential polluter of the water sources and ecosystem by fertilizing and methane emissions Fonterra has and impact on New Zealand´s environment and of course on the entire population living within this environment. For stakeholders we can also take overseas partners and suppliers with whom Fonterra established partnership agreements (Knott 2014). 2. Fonterra’s governance structure Fonterra´s governance structure can be described as a cooperation constitution. There is a Board of directors that is responsible for leadership, direction and oversight of Fonterra....

Words: 853 - Pages: 4

Premium Essay

Case Study: Reinsurance Group of America and Fonterra: Going for Unified Global Operation

...In case of Fonterra the benefits were achieved by setting it up an amalgam of the diary industry with self-contained business functions. The back-office functions of were consolidated globally within New Zealand into transactional services based in Hamilton. What were the major obstacles they had to...

Words: 703 - Pages: 3

Free Essay

Asdxzcz Asdasdzx

...PA R T B go online Go online to to find more case studies. CASE STUDY B Crisis management in international markets: ‘least said, soonest mended?’ John Knight, Department of Marketing, University of Otago and Bradley Mitchell, Inveratek Group Ltd 347 BACKGROUND An inevitable reality of doing business in the modern world is that crises recognise no boundaries (Fink 1986). A crisis management strategy needs to be part of the overall corporate strategy of any company operating internationally. Our chaotic times have led to some spectacular commercial crises. Sometimes these have been of companies’ own making through carelessness. A well-known example is the action of McDonald’s in promoting its sponsorship of the 1994 football World Cup by printing the flags of all competing nations on disposable packaging: the name of Allah is on the Saudi flag, and deep offence was caused by the fact that this was to be thrown away with the packaging (Starrett 1995). At other times crises have been caused by events completely outside of the control of the company. Examples of the latter include the deliberate product tampering of Tylenol products, leading to deaths by poisoning in the USA, and the massive product recall of Coca-Cola products in Belgium resulting from what appears to be a case of mass hysteria (Johnson and Peppas 2003). Furthermore, companies in the midst of a crisis may not be able to control the behaviour of others, but with proper planning and management......

Words: 4074 - Pages: 17

Premium Essay

Change Situation

...Furthermore, Fonterra...

Words: 2692 - Pages: 11

Premium Essay

Ibus

...As for the case of Fonterra...

Words: 2830 - Pages: 12

Premium Essay

Cim Full Essay

...Typical, Fonterra; the best dairy company in the world has violated of business ethics when related the scandal of the milk has toxic harmful to human health and loss of image of company. That issue must be considered and review to demonstrate that problems right or wrong. In addition, it is more important things to see how Fonterra to solve the problems and remediation methods. Definition of business ethics Ethics is considered as a philosophical research of human behavior to conclude the behavior is right or wrong (Ferrell, ET al.2011). Most of business ethics are based on a standard and ethical...

Words: 2574 - Pages: 11

Premium Essay

Trading Amongst Farmers - Nz

...On the 25th June 2012, farmer shareholders in the Co-Op Fonterra, voted in favour of implementing TAF. TAF allows outside capital in the form of buying units; in return for rights to dividends, but not ownership or votes. When researched; there is no agricultural co-op in the world that has taken outside capital and still primarily focused on maximising returns to the supplying shareholders, (ourco-op.co.nz) as primary focus becomes the share price and dividend, eventuating in the demise of the co-operative. A co-operative is set up by its shareholders to maximise the price for the suppliers milk.  Shareholders invest their share capital into a co-operative in return they give loyal supply of the raw material (milk).  Farmers will want to supply Fonterra because they own them.  When you introduce outside investors you introduce different drivers to the business.  Outside investors invest capital to receive a good dividend.  The Directors are torn what do they do with company profits, do they retain funds to make the balance sheet strong, do they maximise the milk price or do they maximise the dividend?  This divergence of interests will eventually lead to the demise of the co-op. For example Satara and EastPack in the kiwifruit industry. Historically they were both co-ops competing against one another for a number of years. Satara then listed its investor shares on the NZAX.  It now had supplying shareholders and investing shareholders.  ...

Words: 846 - Pages: 4

Free Essay

Business

...Fonterra have invested in India and want to keep sustainable development. India is also the one of the world's largest agricultural producers with a large farming industry. Its GDP was calculated to be US $2,010 billion in 2012 and to grow at 7 to 8percent per annum. There has been a specific increase in purchasing power among the cities. Indian packaged food trade was US$25.4 billion in 2011 and it was hoped to reach US$35 billion by 2016, with the highest value segments (dairy, bakery and oil) (India Online, 2013). India’s consumers have become more health conscious, more and more people are concerned with heart disease and diabetes. This influences their purchasing decisions. The New Zealand-India Free Trade Agreement currently being negotiated to reduce tariffs (India Online, 2013). India’s importance is growing for New Zealand. New Zealand export for food and beverages to India was NZ$178 million in 2010, and had a 106 percent increase from 2009. The dominant export product was Dairy products, including butter, milk and cream (India Online, 2013). According to compound average growth rates, the fastest growing food exports from New Zealand were liquor, sweetened bottled water, seafood, babies’ formula, malt extract products and food preparations (NZTE,...

Words: 3185 - Pages: 13

Premium Essay

Managing Business Activities to Achieve Results

...Contents Acknowledgement 4 Introduction 5 TASK 01 6 UNDERSTAND THE IMPORTANCE OF BUSINESS PROCESS IN DELIVERING OUTCOMES BASED UPON BUSINESS GOALS AND OBJECTIVES. 6 1.1 6 Evaluate the interrelationship between the different processes and functions of one of the following companies. 6 Interrelationship between supply chain and procurement department and other departments 6 1.2 9 Justify the methodology to be used to map processes to the organization you have selected in question 1.1 goals and objectives. 9 Process identification 9 Information gathering 9 Interviewing and mapping 10 Analysis 10 1.3 11 Evaluate in own words the output of the process and the quality gateway for the company selected in 1.1 11 output of the process 11 Environmental sustainability 11 Quality gateway 12 Task-02 13 BE ABLE TO DEVELOP PLANS FOR OWN AREA OF RESPONSIBILITY TO IMPLEMENT OPERATIONAL PLANS. 13 2.1 13 Design plans which promote goals and objectives for own area of responsibility for internal and external customers for short term and long term plan. 13 Become clear on the result you would like to realize 13 Break objectives into small 13 Determine the objectives for every goal 13 Put your goals and objectives into time frames 14 Review your goals 14 Put your list in a very place that's simply accessible 14 Return to your lists when every time frame 14 2.2 15 Write objectives which are specific, measurable, achievable, realistic......

Words: 4814 - Pages: 20

Free Essay

Preguntas Grupales

...Plazo: hasta el viernes 13 de junio. 2) El archivo que se entregó en clase tiene dos hojas: - Expo y MI (por Mercado Interno), con datos de 5 años (60 meses) de precio de la leche en polvo entera en el mercado internacional según reporte USDA, idem según GdT, que es la subasta electrónica de Fonterra, precio exportación FOB de Argentina y precio exportación FOB de Uruguay (todos en dólares por tonelada). Se agregan cuatro columnas con el precio de la leche al productor (en dólares por litro) en Argentina, Uruguay, Brasil (Río Grande do Sul) y Brasil (Minas Geraes). - Prod y precio, con datos de 59 meses (desde octubre 2005 hasta agosto 2010) de entregas mensuales de leche, precio de la leche e ingreso (notar que en algunos casos el ingreso no es exactamente igual a la multiplicación de entregas por precio, porque son promedios que se han calculado en forma independiente). 3) Con los datos de precios internacionales, de exportación y de mercado interno, evaluar y comentar (sugiero priorizar la utilizar de gráficos, pero si algún grupo desea aplicar otro tipo de método, ningún problema): PREGUNTAS: 3.1.- Relación entre el precio USDA y el precio GdT (NZ)....

Words: 1149 - Pages: 5

Free Essay

International Business Brief

...-Executive summary (beginning of the report, 1-4 sentences per point, up to 1 page) - Section 1 : info (Malaysian organization, provide overview of the organization) product / services, -key competitors( Nestle BHD, Fonterra Brands; embarked on similar strategies; Nestle plans to spend 240mil this year to expand production capacity , fonterra recently unveiled its power brand strategy in line with the company’s aggressive growth plan moving forward where the company will focus on three high performing brands-anmum , fernleaf and anlene, for faster growth, better margins and greater market appeal) - strengths (despites of having strong competitors, analysts believe Dutch lady is in a strong position to defend its turf and even grow market share via its growth strategies, dutch lady also do campaign celebrating milk & contributing health of its citizen) < raise production and sales, dutch lady would be able to play “volume game” reaping the benefits of economies of scale. - weaknesses ( low consumption risk, people are dropping off the dairy scale after reaching six years old , dutch lady’s focus on only milk products made it very susceptible to milk prices<the company suffers>) but dutch lady also can boost sales by focusing on infant and growing up milk categories. Suggest it do things step by step and not overdo advertising and promotion<cut price>....

Words: 443 - Pages: 2

Premium Essay

Why Companies Use Currency Derivatives?

...Essay topic: why companies use currency derivatives? Currency derivative can be defined as a contract or financial agreement to exchange two currencies at a given rate or a contract whose value is derived from the rate of exchange of two currencies on spot (Shoup, 1998). Currency derivatives are developed and adopted to implement a strategy known as hedging, in which an organisation acquires a contract in order to offset an expected drop or rise in value of a position or future cash flow (Belk & Edelshain, 1997). This essay will outline the incentives and rationales behind an organisation that uses currency derivatives. There are three types of currency derivatives used in hedging, future contracts, forward contracts and options, although swaps are also commonly considered as a currency derivative (Shoup, 2008). These instruments are derived from a spot rate, which is the price of the “underlying currency” (Eiteman, Stonehill & Moffett, 2009). Options are normally more costly than future contracts and forward contracts, because options are rights rather than obligations to buy or sell a currency (gives buyers the right not to exercise the contract if the spot rate movement is not favourable) (Belk & Edelshain, 1997). Research in New Zealand indicates that 70% of currency derivative users used forwards, which are most prevalent currency derivative instrument (Chan, Gan & McGraw, 2003). This is possibly because forwards are easy to manage and understand and can be used in......

Words: 2235 - Pages: 9

Free Essay

Case Study on Tourism

...Strategy in Practice – Tatua Dairy Company and the Dairy Industry External Analysis: Industry Profile: The New Zealand Dairy Industry is a mature and large market involving six main competitors: Fonterra, Tatua, Westland, Open Country, Synlait and Miraka. Consequently, the scope of competitive rivalry is not only national but also global with NZ accounting for over a third of the world’s international dairy trade. The Dairy Company supplies a very wide range of dairy products in various segments that include: dairy ingredients, speciality nutritionals, flavour ingredients, bionutrients, foodservice, and consumer products to end-customers. The products that are accessible are fundamentally consistent across all competitors therefore companies differentiate themselves through innovative and high quality products such as the ‘Dairy Whip’, consolidated relationships with customers and ease of acquiring. Evidence of vertical integration is present in this industry as Tatua is supplied by its own shareholders however there is also horizontal integration as many companies have merged to gain market share. Economies of scale in this industry are high because it is essential to gain a profit. The six main competitors also have large facilities at their disposal that are used at full capacity to efficiently produce the correct quantity and product to supply to their numerous customers....

Words: 1556 - Pages: 7

Free Essay

M&a, Finance Project Management, Discuss About Future's Income of Individual

...FINAL REPORT VINAMILK OPERATIONS AND SUPPLY CHAIN MANAGEMENT Subject: BUS 359 – Operations and Supply Chain Management Instructors: Mr. Le Vinh Quang Mr. Kieu Manh Kha Mr. Phillips Reginald Group 2: Le Anh Linh | 1132300231 | Tran Thi Ngan Giang | 1132300194 | Tran Thi Kieu Diem | 1132300175 | Giap Thi Kim Dung | 113230018 | Huynh Mai Anh Thu | 1132300332 | Nguyen Ngoc Bao Tran | 1132300351 | Table of contents: I. Introduction: 1 II. Overview about Vinamilk supply chain management: 2 III. Supply chain management: 4 1. Material resources: 4 2. Manufactures: 6 3. Production process of Vinamilk products. 9 4. The stage of the distribution output. 11 5. Logistics 13 IV. Problems and solutions for Vinamilk supply chain management: 13 1. Distribution issue: 13 2. Logistics issue: 15 3. Input materials issue: 17 V. Conclusion: 18 VI. References: 19 I. Introduction: * Company profile: Full name: Viet Nam Milk Joint Stock Company Brief name: VINAMILK International trading name: Vietnam dairy products Joint- Stock company. * Vision: Become the Vietnam symbol about the nutritional and health service of human life. * Mission: Bringing to the community the best nutrition, the best quality with the respect, love and his responsibility for human life and social status * Core......

Words: 4304 - Pages: 18

Premium Essay

Borderlands, La Frontera

...Demont Campbell AP English 4 Borderlands / La Fonterra After reading this poem I have opened my eyes to more than staying one typical direction. I believe a lot of people have tunnel vision and don’t take the time to look at the whole picture. I have become interested in prose after reading this book because it reads just like music. It has an easy rhythm I guess you could say. Honestly I don’t think this poem is for everyone especially at a high school level because it has to deal with such a contrasting subject. This book has shown me the hardships that people have to go through and that everyone should have human rights. Borderlands/La Fonterra, Gloria Anzaldua paints a moving portrait of the search for her missing identity in a world that refuses to allow one. The physical borderland between the U.S. and Mexico helps create the psychological "fence" that a she is put through when she is denied a culture and a place in society. "She has this fear that she has no names… that she has many names…that she doesn't know her names." This quote shows the rich nature of her writing and the amount of energy she feels while writing this poem. Anzaldua, who as both a woman and a Chicana, grew up in an atmosphere of oppression and confusion. "It's not a comfortable territory to live in, this place of contradictions,", "Hatred, anger and exploitation are the prominent features of this landscape." It is also a landscape where the question "Who Am I?"...

Words: 985 - Pages: 4