Advanced technologies Essays

Advanced technologies Essays Advanced technologies Essay Advanced technologies Essay It was already mentioned that acquisition program made Wimm Bill Dann a vertically integrated company, which controlled the full production cycle. Thus, it made the company virtually invulnerable to any kind of changes on the market. With all power in hand and pioneering technologies, Wimm Bill Dann became a strong and powerful market player. Yet, all the changes that Wimm Bill Dann undertook made the sector attractive to competitors. That’s exactly why campina, Ehrman, Danone and Parmalat appeared. However, it’s necessary to say that with all the acquisition that Wimm Bill Dann made, for those companies-competitors it had become a required condition as well to ensure reliable supply in order to stay flexible and react quickly to any market changes. In the past, the sector had been fractured – some plants produced milk, other entrepreneurs distribute it, the third ones sold etc. WBD changed the structure of the industry making the necessary condition to have reliable supply. Thus, it is possible to say that WBD’s acquisition program made it more difficult for potential newcomers to enter the market. The entrance barriers became high, though the sector had become very attractive. The contemporary trends in marketing environment demand complete flexibility of the companies, i. e. an ability to react quickly to different market changes. This condition is especially relevant to Russia, where political and economic environment are very hard to predict. When Wimm Bill Dann entered the market, the personal income of the customers was very low. It was necessary for WBD to make its products cheaper so that Russian consumers could buy. Nowadays, the personal income of people had substantially increased, as did the demands. The consumption partners are different as well. At the moment, people prefer to pay more but to buy quality products. The quality can be ensured only by strong brand. Thus, brand loyalty had become the necessary condition of success. Companies spend millions of dollars to make their brands recognizable, to ensure brand’s awareness and therefore to ensure stable market position for their customers. It is not a secret, that it is cheaper to retain the existing customer than to get a new one. Yet, it is also important to say that strong brand can be built only when company focuses as much effort as possible on this given product. Therefore, specialization nowadays is becoming more and more important in order to achieve market success. Considering this factor, Wimm Bill Dann’s strategy of diversification doesn’t appear to remain sustainable. Wimm Bill Dann nowadays is associated to the larger extent with diary products, in lesser extent with juice, but not with mineral water, beer in may be something else in future. Thus, it is reasonable that the company focuses all its efforts in pursuing brand loyalty in its diary segment. According to Boston Consulting Group matrix, portfolio of every company might be composed of four main category of products: Stars – have big market share, which quickly rises; Cows – have big market share, which remain stable; Questions – their market share is small, but it also quickly rises. With adequate financial support, questions can either turn into cows or stars; Dogs – their market share is small and it doesn’t enlarge. Companies have to get rid of dogs in order to save money and invest it in other perspective products. Thus, diary product is cows for Wimm Bill Dann, as they generate the largest profit for the company and have the best potential for growth. Juices can be considered stars. They need adequate promotional campaign in order to compete with foreign producers. In such a way, it is important to notice that Wimm Bill Dann’s strategy of diversification had done well for the company in the past contributing to fast growth and adequate response to changing market conditions. Yet, nowadays with growing competition and the wide variety of different products, it is very easy for the customer to get lost. That is why strong brand building is recommended to serve as a guide for the customer and to differentiate the products of the given company from the products of the rest of the companies. With this regard brand extension doesn’t seem to be a relevant approach, since people tend to associate the company with certain type of a product. Thus, if the customers think that Wimm Bill Dann does diaries the best, they wouldn’t think so with regard to beer or any other product. That is why, brand extension can even create a threat for the company’s core competence products – diaries and juices. In such a way, specialization rather than diversification strategy seems more relevant and more useful. 2. What made Wimm Bill Dann a potentially attractive takeover target? Wimm Bill Dann is a pioneer company on the post soviet Russian market. It is the first company to use advanced technologies of packaging and product preservation, thus making the products look better and serve longer. It is also the first Russian company to use active marketing campaigns in order to create strong demand for its products and form strong customer loyalty. Moreover, Wimm Bill Dann is a vertically integrated company that doesn’t depend on suppliers. This provides additional competitive advantage and ensures company’s success. Thus, the most relevant competitive advantage of the company are: wide distribution network, which ensures availability of WBD’s products; Advanced technologies; full production cycle; strong brands. All thses factors make the company, as it was already mentioned, virtually invulnerable to any kind of market changes. The company is able to adapt quickly to any external changes, which makes Wimm Bill Dann very attractive as a potential takeover target. Moreover, Wimm Bill Dann extended its operations to foreign markets as well, thus it has excellent opportunities for growth. Being number one national producer in Russia, Wimm Bill Dann set high entrance barriers for newcomers and is able now to dictate own conditions on the market. Yet, what makes the company especially attractive target is its powerful brand equity. Wimm Bill Dann’s brand is what adds the most value to the company. WBD is one of the most expensive brands in Russia, which has great potential of becoming one of the most expensive brand in Europe and Asia. References 1. Brown S. (2000) â€Å"Imagining Marketing: Art, aesthetics and the avant-garde† Routledge, London 2. Debrah Y. (2002) â€Å"Globalization, Employment and the Workplace† Routledge, London 3. Cassing J. (1998) â€Å"Capital, Technology and Labor in the New Global Economy† American Enterprise Institute, Washington DC