Organizational Culture, Planning, and Communication Business Strategy

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Exercise # 3

Kyami Clarke

BMGT 364 6387

University of Maryland University College

February 14th, 2019

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Exercise # 3

It is essential to take into consideration the product offering, what others are doing, the place of business, the people employed, and best practices. The central resources for a business are the people, location, and capital. The culture of a place plays a vital role in the location and people employed. For a business to be successful, knowledge of all these factors will determine whether production will be sustainable and well managed. This paper will explore how Biotech’s new Infant Formula Division can be successful by the leadership of Expert Food Consultants.

Product

The organic infant formula industry offers many product offerings, such as grass- fed cow milk, non-GMO, sensitive, corn, soy. The purpose of infant formula is to imitate breast milk. The benefits of breast milk is the naturally occurring protein, vitamins, minerals, and carbohydrates. It is essential to select a product that replicates the nutrients babies would typically get from traditional breast milk. Per market analysis, Expert Food Consultants should consider launching is grass-fed cow milk and sensitive formula. From a financial aspect, the production costs associated with grass-fed cows is lower. From product offerings standpoint, studies show that grass-fed milk is healthier and contain higher natural occurring protein, calcium and vitamin D (Heins, 2018).

Infant organs are not fully developed, and it is essential for babies to consume

formula that has decreased body fat. Grass-fed milk is an essential component of this factor. The omega-3 fats contained in grass-fed cow milk has resulted in parents seeking and giving this kind of milk to their infants for healthy growth in their infants. Grass-fed milk has higher levels of fatty acids and lowers omega-6 (Heins, 2018), blood sugar regulation, conjugated linoleic acid (Kirkpatrick, 2017), which are all vital for infant growth and health. All of these health benefits make it in high demand, hence why launching this type of product offering as marketable.

Net Profit

As of 2016, the value of natural baby formula was listed $6.5 billion (Statista, 2017) and is expected to reach $11 billion by 2023 (Wood, 2017). Nestle reported an average growth for organic formula is 2.8%, while in Asia 4.4% growth (Nestle, 2018). Abbott saw an increase of 2.33%, which equalled $1.6 billion (Penumudi, 2015). According to market analysis, the Asian region is the best due to its health-conscious population and economic growth (Anand & Koshy, 2017). By doing business in Malaysia, this will assist in the ROI and higher profits, primarily because of the tax advantages and cost savings (Doing Business in Malaysia, n.d.). It is reasonable to expect the Infant Formula Division to start at 2% and follow an upward trajectory to 4%-5%.

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Competitors Success

There are many companies which are successful in the organic infant formula industry. These companies include Mead Johnson Nutritionals, Danone, Nestle Products and Abbotts (Changing Markets Foundations, 2017). Each of these companies has specialised in provisions of sustainable and organic infant products. Their success can be attributed to their commitment to upholding the code of agreement in association with other stakeholders. They give a high-quality product which has made their market value higher. Also, they have come together to come up with a partnership with other organisations (APIYCNA, n.d.). The partnership is called the Federation of Malaysian Manufacturer Infant Formula Ethics Committee.

With the help of this partnership, these companies have been successful in

offering these products to the market. The success of these companies has been possible through their provision of products which they give priority. The success of these businesses have been due to their ability to prioritise; hence their products seems to encourage the same. The other reason why these businesses have huge customers which translates to their success is that they act as platforms for enhancing ethical business practices as needed by the ministry of health. The Malaysian government have been supporting these businesses in their dealing and doing all they can to make them a success for they pay their taxes hence creating government revenues (Doing Business in Malaysia, n.d.). The ability of these businesses to act responsibly by supporting underprivileged and conducting nutrition studies with an institution of higher learning has led to the businesses being valued by most community members hence making a huge purchase.

Best Location

Malaysia is a country that depends more on imports for dairy products. The country is known to be having low milk production, which translates to lower dairy produce. Although there is a considerate increase in milk production for the last four decades, the demand is not being met as expected. The demand has not been fully met since the high population is not being satisfied with the low quantity of milk produced (Bonaventure & Umberger, 2012).

As leader of Expert Food Consultants the best location to source milk will be

within the country; Malaysia despite the supply being low. Some of the milk will be from Zaman Dairy Fresh and Able Dairies (Khanal & Dhiman, 2007). These businesses have a good reputation, and in order to maintain it, they will continue to offer the best making them the best suppliers of the ingredients for the products in question. These are the best location for one to get milk since the businesses feed their farms have qualified veterinary officers who inspect their animals and ensure they are full of health before being milked. The veterinary officers check on milk with intervals which is easier to notice any changes in the milk consistency and report promptly. Since these businesses are already equipped to feed cow using grass, the impact of chemicals is nearly nonexistent.

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Getting milk from Malaysia is the best location for the product because it will be consumed within the country; thus the farmers and suppliers will be conscious about what is going into the products being produced.

Current infant formula companies source their materials from farms within

Malaysia like Zaman Dairy Fresh and Able Dairies, Linggi dairy businesses, Mawai dairy farm and Desa dairy farm among others (Priyana, 2004). These are the largest producers of milk in Malaysia in the order which they follow each other, and it makes milk abundant for dairy products businesses. The current infant formula companies have been working with companies for so long they trust their milk. There is a sense of comfort knowing how the animal is fed and if any antibiotics are given to the cows.

As mentioned previously, this is also the best location because it will reduce the

entire costs of production due to low charges of transport as opposed to importing milk. These farms have been in operations for quite some time which has helped milk produce companies to build trust in them hence getting the ingredient from them is the best decision. The businesses have employed qualified and experienced veterinary personnel who have excellent records in monitoring dairy cows. This staff ensures the cows are given the required levels of nutrition which are good for the cows to give the best milk and also ensure they get the supplement as required hence they the best to source milk.

Cultural Consideration

The new director needs to consider the Malaysian culture in order for the business to be successful. This country has various cultures due to being inhabited by people from diverse parts of the world who might have visited due to education, business activities and others for the sake of tourism. The major ethnic groups which are found in Malaysia are the Chinese, Malays and Indians (Haniffa & Cooke, 2002).

Before the director starts to run the business in Malaysia, they need to be aware

of the cultural value of this nation before bringing staff to a new country. The cultural considerations which should be made etiquettes and protocols to be followed during meeting and greetings in business forums. In Malaysia, the initial greetings should be made with a lot of formality full of respect to the people on board. Respect is critical in a business meeting in Malaysia for this will affect how people will listen to what you have to say during the meeting. It is expected that during the meeting one has to introduce and acknowledge the important person first for it is a sign of respect (Mastor, Jin, & Cooper, 2000).

According to the culture of the land, communication there is a need to maintain

harmonious associations. There is much use of non-verbal communication like body language and tone of voice in Malaysia. During the business discussion and the response is given is unsatisfactory, one may decide to reframe the question to get another reply which might be satisfying or less offence. Silence is also of great importance during a change in discussion topic for it shows enough time has been

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allocated; hence clear thought is being given. Laughter by Malaysian is widespread in instances of uneasiness for this helps them to relax and because they cannot handle anger respect (Mastor, Jin, & Cooper, 2000).

During a business meeting, it is always good for the senior people to get in first

so that they will be the first person to greet Malaysians. It is a form of respect and appreciation of hierarchy within the businesses. During the first meetings, Malaysians prefer to use most of their time for depth discussion in order to know better the other side of the people they are doing business with. Dress code is very crucial in Malaysian people for it helps to demonstrate respect and decency(Mastor, Jin, & Cooper, 2000). Men should be seen in long sleeve shirts, and ties with women expected to be seen in skirts or trousers with working blouse or instead in dresses (Mastor, Jin, & Cooper, 2000).

Personnel Selection

Malaysia is a country which has complex culture due to a mixture of people from various backgrounds. For the business to be successful and operate in the new country, the director should hire local personnel for it would be better to run the business. Considering the business culture of America and Malaysia, they are very diverse it would be useful if the director will be assisted by local leaders (Mastor, Jin, & Cooper, 2000). Local leaders are aware of what they expect from foreign companies; hence they will direct the administrator on running it. Also, local leaders will enlighten the director of how the businesses will be operating, and gradually, the director will cope with this culture hence can now start sourcing leaders from other countries.

Best Practices

A management team is a group of individuals who work at higher levels of the company and who aid in running the businesses. The management team is the one responsible for how the company will operate and are answerable to the board of directors. For success to be attained at the infant formula company, the director needs to have the best structure for leading the company.

The structure of the businesses should be composed of key persons who will

make the businesses operate as needed. They include; the chief executive officer, director or the president is the one who will be driving the businesses. Chief Operating Officer, vice president of the general manager, is the person who ensures all tasks at the company goes as expected. Vice president of marketing has the role of marketing the product to society and win a high number of customers for the purchase. Chief financial officer is to seek money that is seeking and dealing with investors. Production manager has the role of ensuring the infant products are manufactured ready for the market. The operations manager will have the role of financial victory of the business.

The quality controller will check whether the infant product meets the requires

standards for consumption. The accountant has the role of keeping money records of

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the businesses which are income statements and balance sheets. The office manager will be dealing with everything else in businesses apart from production. Human resource personnel will have the role of hiring and firing employees on behalf of the company Purchasing manager will have the role of acquiring all the thing needed in the company. The receptionist will have the responsibility of the front office by picking and making calls on behalf of the company.

Conclusion

In summary, infant formula companies are significant for they give supplement food to the kids. Market analysis shows that the demand for infant products are increasing day in day out; hence the market for such commodities is increasing. There is a high demand for infant and baby products for there is high demand associated with various factors. Grass feed cow milk is beneficial for it has a high content in protein, conjugated linoleic acid, calcium and vitamin D among others. Malaysia is a country with a sophisticated culture due to the presence of three cultures from Indian Chinese and Malaysian people.

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References

Anand, A., & Koshy, A. (2017). Organic Infant Formula Market Report- Forecast till 2023. Market Research Future.

APIYCNA. (n.d.). Federation of Malaysian Manufacturer’s Infant Formula Ethics Committee (FIFEC). Retrieved February 15, 2019, from Asia Pacific Infant and Young Child Nutrition Association: https://apiycna.org/malaysia/

Bonaventure, B., & Umberger, W. (2012). Factors influencing Malaysian consumers’ consumption of dairy products. Conference, Australian Agricultural & Resource Economics Society.

Changing Markets Foundations. (2017). Milking It.

Doing Business in Malaysia. (n.d.). Retrieved February 7, 2019, from Gaiyah Consult: https://www.gaiyahconsult.com/en/business-integration/doing-business-in- malaysia.html

Haniffa, R. M., & Cooke, T. E. (2002). Culture, corporate governance and disclosure in Malaysian corporations. Abacus, 38(3), 317-349.

Heins, B. (2018). Grass-fed cows produce healthier milk. Retrieved February 11, 2019, from University of Minnesota Extension: https://extension.umn.edu/dairy- nutrition/grass-fed-cows-produce-healthier-milk

Khanal, R. C., & Dhiman, T. R. (2007, August 30). Status of Milk Fat Conjugated Linoleic Acid (CLA) in Selected Commercial Dairies. Asian-Australasian Journal of Animal Sciences, 20(10), 1525-1538.

Kirkpatrick, K. (2017, May 12). Is grass-fed dairy healthier for you? Retrieved February 13, 2019, from USA Today: https://www.today.com/health/grass-fed-dairy-infant- formula-healthier-t111507

Mastor, K. A., Jin, P., & Cooper, M. (2000). Malay culture and personality: A Big Five perspective. American Behavioral Scientist, 44(1), 95-111.

Nestle. (2018, October 18). Nestlé reports nine-month sales for 2018. Retrieved February 14, 2019, from Nestle: https://www.nestle.com/media/pressreleases/allpressreleases/nine-month-sales- 2018

Penumudi, A. (2015, April 22). Abbott profit beats expectations, sales of branded generics jump. Retrieved February 14, 2019, from Reuters: https://www.reuters.com/article/us-abbott-results/abbott-profit-beats- expectations-sales-of-branded-generics-jump-idUSKBN0ND1CR20150422

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Priyana, Y. (2004). Land Potency for Dairy Cattle at East Slope of Merapi-Merbabu

Volcano, Boyolali, Central Java. Indonesian Journal of Spatial and Regional Analysis.

Statista. (2017, September). Market value of organic baby food worldwide in 2016 and 2025 (in billion U.S. dollars). Retrieved February 9, 2019, from Statista: https://www.statista.com/statistics/478021/organic-and-non-organic-baby-food- sales-share-worldwide/

Wood, L. (2017, December 27). Global Organic Baby Food Market - Expected to Reach $11 Billion by 2023 - Research and Markets. Retrieved February 9, 2019, from Business Wire: https://www.businesswire.com/news/home/20171227005310/en/Global-Organic- Baby-Food-Market---Expected/