The acquisition of National Grapes to Welch’s serve as the bridge towards the financial stabilization the latter and provide sure supply of grapes for their production. The two board system of the National Grape and Welch Food Inc. provide flexibility for the latter since every board member represent vital areas of its business operation. The aggressive expansion of Welch not only on their operation but also on their product lines contributes for their successful market penetration on their target market since they always secure their products to be in line with the tastes and preferences of their market segment.
All of the internal strengths of Welch were accompanied by their impressive and unique marketing strategies which add up to the popularity of Welch’s products in the market and reputation of the company itself. Despite of all the strengths and opportunities on the hands of Welch, tight market competition budge its corporate stability and market dominance since their competitors used price competition in order to undercut Welch (Netmba. com, 2008). With more funds on their hand, new competitors of Welch used this advantage to attract more customers in the market.
But this threat can still be solve through cutting down the prices of Welch relative to their competitors since it’s the only way in order to win back the loss sales that they experienced by the entry of new market players in the industry. There is a great possibility that customers will start shifting back to the side of Welch if they cut down their prices since they already have a good reputation, high quality and innovative products, and a lot of variety of juices to choose from.
Price is the main factor of consumption of consumers, therefore if Welch, alongside with its advantages, can provide cheaper juice products to the market there is a great chance of beating their competitors. In this regard, it is clear that the internal strengths of Welch would make it a lot easier for the company to restore their market dominance through giving what their customers wants – cheaper products.
Analysis of the Corporate Strategy Level
The acquisition of National Grape to Welch just supported the mission of the latter which is to provide high quality fruit juices to the market. With the said acquisition, Welch has been able to monitor the quality and specifications of the grapes that they will use for their manufacturing plants by teaming up with the workers of National Grapes. On the other hand, with the mission of National Grapes to provide the farmers control on their destiny from the growing of grapes to finished product, Welch fits for the attainment of the said goal since the latter have the skills and facilities to manufacture the grapes of National Grapes. In other words, the profitability of National improves by adding the manufacturing process into their business line.
It was just like having control on the industry fruit juices from planting of raw materials to manufacturing. This is how farmers can control their destiny – by having control over the value chains of their products. Furthermore, to maintain the influence of National Grapes to the operations of Welch, putting four National Grapes representatives to the board of directors of Welch would be a good way to monitor and to keep their control over the operations of Welch. Aside from flexibility, the two board system of Jack Kaplan provides equal chances of voicing out the concerns of both companies.
Welch can easily make collaboration to the farmers of National Grape regarding the specifications and quality of grapes that they need to their manufacturing plants in order to preserve their reputation of selling high quality fruit juices which they cannot do to other suppliers. In addition to this, Welch was running out of funds in order to finance their operation that is why they have to sell the company to other business entity and the acquisition of National Grapes also solved this financial problem of Welch plus some added benefits which has been discussed a while ago.
In this regard it is clear that the acquisition between National Grape and Welch benefit both companies and widen their market influence. The internal strengths of Welch was further improved especially the quality of their products since they now have the control on the specifications and quality of raw materials that they will use on their manufacturing plants. As what we can observe, the acquisition marked the diversification of product lines of Welch plus supports the main goal of Welch which is to maintain relevancy between their customers and suppliers.
Welch started adding new flavors on their product lines as they become under the supervision of National Grapes which improved the reputation of Welch for being innovative on their product lines. Furthermore, it is already being expected that Welch would continue on innovating their product line with the aid of National Grapes since this change on their business strategy opened new market opportunities which can be seen on the improvement of their profitability and product diversification. 7. Analysis of Business Level Strategy Basically, National Grapes and Welch have different sets of corporate strategy to address their own target markets.
Welch, since its forte was to manufacture fruit juices, its marketing strategy was way above than of the National Grapes. Welch used uniquely the television and radio as one of their main marketing strategies in attracting more customers and promotes their new product lines (Gaebler. com, 2008). Sponsorship on various television programs added to the popularity of Welch’s product lines and its reputation in the market. Mass media indeed served as the powerful tool for the publicity of Welch. Their long running advertising campaign surely touched its target market and using magazines to reach their target customers.
It was just like putting all their products in various mediums where people oftentimes visited, read and watch to instill into the systems of their product lines into their target market. In addition to this, another marketing strategy of Welch was their entry on selling fresh grapes on the market which was their initial step towards major product diversification on their later years. Welch’s also did put much attention on the innovation of their products and packaging which was a good way to attract more customers especially those that were “quality conscious” customers.
This innovation on their product lines was backed up by their research and development team. With much interaction with the staffs and personnel of Welch, their research and development team began more productive and creative in developing the products of Welch. In this regard, it would be best to say that Welch was pretty much aggressive in marketing their products and tapping the interest of their customers and suppliers through the use of various media and even through the internet which has been identified as one best ways on how to market products and services in today’s modern world (Pcmag. com, 2008). Actually, it was not only on the product aspects where Welch did concentrate their marketing strategies, they even widen up their operations by entering the international market which is one of the best ways to increase their profitability and publicity of their product since aside from the fact that entry to international market provides vast potential market, it also provide new rooms for new business ventures like the distribution agreement between Nong Shim and Welch. These advantages of Welch, together with other alternatives, would solve their problem regarding the tight market competition existing on the fruit juice industry.
Gaebler. com (2008). For Entrepreneurs: Marketing Basics. Retrieved April 7, 2008, from http://www. gaebler. com/Marketing-Strategies.
htm Netmba. com (2008). Pricing Strategy. Retrieved April 7, 2008, from http://www. netmba. com/marketing/pricing/
Pcmag. com (2008). Internet Advertising, Retrieved April 7, 2008, from http://www. pcmag. com/encyclopedia_term/0,2542,t=Internet+advertising&i=45193,00. asp