HETAC 3rd Year

Phillip Machelo 2124472 Xiaomei Ma 2116971 Behzad Rafiq 2124538 Douglas Nascimento 2102800

Content
1) 2) Introduction Functional structure---- senior management and functional management 3) 4) 5) 6) S.W.O.T analysis P.E.S.T analysis Findings and conclusions Bibliography 3 5 8 2 2

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Introduction
Corporate strategy can be described as the identification of the purpose of the organization and the plans and actions to achieve that purpose (1).Kerry group was established in 1972 in Ireland. Nowadays, Kerry group has been regarded as a worldwide leading food processing organization after sustaining a gradual development for 40 years. The products of Kerry group are categorized into three principal divisions including ingredients and flavors, consumer foods and Agribusiness. Kerry Group not only has employed24, 000 people but also provided over 10, 000 food and food ingredients products with customers in more than 80 countries all over the world.

Functional structure
Structure is regarded as one of three elements in organizational configuration. A number of structural types such as functional, multidivisional and matrix can be shaped according to the fundamental conditions of an organization including size, degree of diversification and technology and so on. A functional structure is based on the primary activities that have to be undertaken by an organization such as production, finance and accounting, marketing, human resources and research and development (2).

A functional structure
Top executive (CEO or Chairman)

Operation Department

Sales and Marketing Department

Finance and Accounting Department

HR Department

From obove chart , it is displayed that the distinctions between the roles, tasks and responsibilities of senior management and functional management. To start with chief executive represents senior management in an organization who not only position at the highest hierarchical place but also in touch with all operations through controlling from the top to bottom. Being top leaders targets , performance standards ,evaluation and all of regulations of organization are set by them .Furthermore, functional management is equal to middle management which consists of middle managers who are senior executives in different function departments. Midlevel managers are responsible for implementing the tasks from the top management in separate fields. The critical point is that depending on the extent of achievements their working performances and rewards are assessed by top leaders. Last but not

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least, line employees work as the front lines for an organization and they are under control of team leaders who directly report to middle managers.

S.W.O.T Analysis
A SWOT analysis summarizes the key issues from the business environment and the strategic capability of an organization that are most likely to impact on strategy development (3). This is an analysis of the strengths and weaknesses present internally in the organization, coupled with the opportunities and threats that the organization faces externally (4).

Strengths
Kerry Group PLC has a great competitive advantage over its competitors as it operates globally. Thus due to its global positioning, it is likely to target different markets all over the world. Kerry Group PLC has great processes, systems, information technology and communications, as it is a technology based company. Therefore, this can be viewed as an advantage, as the technology has to be constantly upgraded, and needs to be up to date. Kerry Group possesses a large number of brand products with trustful quality which attract loyal customers such as low low and Denny brand. Kerry Group PLC has acquired sustained profitable growth which with current annualized sales of approximately 5.3 billion (5). This is a great strength as high profits relate to success of business, hence allowing room for more investments. Kerry Group PLC offers employment to over 24,000 throughout its departments such as manufacturing, sales, technology and its centers in Europe, North America, South America, Australia, New Zealand and Asian markets (5). This is a great strength as Kerry Group is likely to get reasonable tax reductions as it is providing employment to the local people, hence improving the economic situation in particular parts of the world. Kerry Group PLC is likely to enjoy economies of scale as it is a large company, therefore enjoying average cost reductions. The share price of Kerry Group PLC has kept a stable growing trend in Dublin and UK share market which has been calculated to excess 5 billion in current market capitalization.

Weaknesses
Geographic concentration Kerry Group has mainly focused its consumer foods on Ireland and UK. Particularly the sale trend has dropped visibly in Irish food consumption market as a result of inflation and less incomes of people. This kind of geographic concentration has associated with the declining of revenue for Kerry Group. Human resource

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Being an international organization, Kerry Group should recruit more new employees with different nationality, culture background and language in Ireland and UK in seeking for multi-culture company.

Manufacturing infrastructure The new statistics from Irish share market in November 2012 demonstrates that the share price of Kerry Groups 39.60 Euro which has risen by 11% compared with the same period in 2011 . It is worth to mention that Kerry Group share price have not been influenced by Irish severer economy recession because of increased revenues and profits. Kerry Group has insufficient planning and controlling capabilities for its stocks while confronting a falling trend of its share price.

Opportunities
In the view of increasing 11% of revenue in 2011 Kerry Group is capable of spending more in technology department for exploiting substitute . Having been established a technology and innovation center in Dublin in2012, Kerry Group has more advantages than competitors to complement products. Being a prominent company, the brands of products are embedded into minds of consumers. It is feasible and easy approach to attract royal customer once brand products extension. Being a global company, domestic shrunk has not affected the revenue of Kerry Group as international market grew in Asia, south America .

Threats
Competitors from all over the world, who are in the same industry as Kerry Group PLC. Therefore Kerry Group PLC is likely to face competition on so many levels in the business environment, e.g. small local manufacturers and global world-wide manufacturers of ingredients and solutions, in certain countries. For instance, in Ireland Carbery is likely to be one of the competitors of Kerry Group PLC. Carbery enriches food and drink - were dedicated to providing the best nutritional ingredients/flavours and cheeses to customers all over the world (6). Economic factors: poor economic factors are likely to be considered as a threat to a company such as Kerry Group PLC. As we all know how high and developed economies play a huge part on the success of the business. Such economic factors include: Low economic wealth of a country, hence leading to low success of Kerry Group PLC profits. This will relate to the underdeveloped countries, thus if Kerry Group was to target underdeveloped countries, e.g. establishing its facilities in a poor country like Malawi, chance of less profits are likely to be high.

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Low and poor economies will not be able to support Kerry Group on its operations, e.g. provision of good infrastructure, such as roads, railways, etc. High levels of recession, e.g. in Ireland. This is likely to have an impact on Kerry Group PLC. In the article on BBC News commenting on Irelands recession, stated that recession will end in 2010. The bank added that recovering will be gradual and initially reliant on export with a major effort need to improve international competitiveness (7). High levels of inflation are also likely to affect Kerry Group PLC, therefore leading in the opportunity when holding money, high inflation is likely to discourage investments and savings, and will also encourage high prices. However this is not directly affecting Kerry Group PLC, as most countries in Europe have good levels of inflation. Lack of skilled and highly qualified staff, if Kerry Group will operate in certain parts of the world, e.g. in some parts of Africa and Asia there is high level of illiteracy. Poor government policies are likely to cause limitations for companies operating globally. Cultural factors are also likely to be considered as a threat for Kerry Group PLC. For instance if Kerry Group decides to establish a market for some of its products in Muslim countries all over the world, such countries are likely to protest against food ingredients and flavours containing pork substance. Though Kerry Group is likely to offer variety its products, this can be considered as a limitation on the global market to some extent.

P.E.S.T Analysis
PEST framework comprises political, economic, social and technological types. It is mentioned that these four factors have connected to each other instead of playing an independent role respectively .Meanwhile, each factor includes a number of key drivers of change which more have impacted on the structure of any industry, sector and market as well as the majority of organization.

Political
Government stability Having the most powerful entitlement, Government is capable of publishing all kinds of legislations and policies to control over a country 's economy . The main reason is that government can stimulate economy, impose or adjust taxation policy and attract a number of foreign investors which have influences on developing business strategy. From the previous one century it is clearly seen that a prosperous economically development definitely had depended on a state stability consistently. For example Singapore has regarded as one of four Tiger economies in South-East Asia which benefited from a peaceful and stable government system instead of a chaos and collapse one. Especially, Singapore is famous on its complete and strict legislations and therefore its economy not only has continuously maintained an upward trend but also the occurrence of corruption has been kept at the lowest rate worldwide

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 Taxation policy In general, government revenue stems from taxes at a huge degree. Meanwhile, the government is able to publish a proper tax policy according to the national economy. For example, in Ireland the corporation tax rate is 12.5% which has ranked at the lowest rate in Europe. As a result, a great deal of international company have transferred their main manufactories from other European countries or USA to Ireland such as Dell, Intel in order to gain more profits due to declining company tax. Social welfare policies A good social welfare system absolutely enhances individual's sense of security. It is not denied that the majority developed countries has established generous social welfare frameworks. Such as children benefits, pension scheme. In particular, currently increasing number of professional people is tended to immigrate to Canada or Australia. Foreign trade regulation International trades are becoming more common and convenient than before. Avoid having conflicts which generate from different languages, cultures and national business policies between purchasers and supplies, they have to comply with international foreign trade regulations. Such as foreign current exchange policy.

Economical Factors
Business cycles Each business cycle contains development, growth ,shakeout, maturity and decline. From 2008 until now global economy has suffered from an incredible downturn .Seeking for overcoming recession, each country's government has to not only adjust the previous relative policies but also mapped out new policies. In 2012 the European meeting has agreed to 130bn Euro bailout to Greece .

Unemployment The rate of unemployment is closely associated with the development of economy. At present, compared to the last 5 previous years, there is an unbelievable increase in unemployment in Europe. From the research, in Spain approximate 20% of population is out of work, in Ireland the rate unemployment has grown up from 4.6% in 2007 to 14.7% in 2012. The first point is that the majority of governmental organizations have to implement redundancy due to deficit of public budgets. The Second is that the large number of international company has to reduce the number of new recruitments because of the dropping revenues. Thirdly, in the light of shortage of budgets, the governments are not adequate capabilities to create more job opportunities. Disposable income Disposable income is a strong and visible sign to indicate an economical level. In a booming

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period, with the gradually growth of salaries people are more likely to consume thanks to more disposable income excepting daily expenditures on necessaries. Chinese economy has been persistently rose up for over 30 years after putting into effect economy revolution policy. Not surprisingly. Chinese people are increasingly becoming the main customers on world luxury marketing because they are richer than ever.

Money supply The abundant money supply plays a significant role in supporting and stimulating the economy, the main point is that governments take advantage of it to invest in domestic and international marketing. In Ireland due to deficit of money supple at an astonishing extent and therefore banks have to take action to increase the requirements for commercial loaning. Unfortunately, in 2012 every day there are nearly four small businesses has been bankrupt as a result of the reject of loan planning from banks. GDP/GNP trends GDP /GNP show the trend of economy development. Comparing to stagnating times in Europe and USA, China, India and Brazil have become the engines of economy development where are more attracted to international prominent companies. Because GDP trend among these three countries had kept in a stronger up place reaching at over 5% in 2011 respectively.

Social factors
Population demographics A marketing size rests with population base. Compare with Ireland with 4.5 million population China's population is 1.3 billion . It is not difficult to understand that why China has become the major consumer marketing and attract large quantities of internal companies. Lifestyle changes Lifestyle changes are linked to the economy and technology development. Currently, we are living in the highly advanced technological era, computer, internet, Iphone ,Ipad and others products make our lives more convenient and faster than before. What is more, customers especially for new generation are more likely to purchase the newest products with advanced innovation and higher price. Social mobility Immigration rate can display a tendency of social mobility. During the Celtic Tiger , a huge number of East European workers migrate into Ireland to looking for work . However, from 2008 they have to emigrate from Ireland as they are unemployment. Attitudes to work and leisure Some people insist that working is for life, while other claim that working is for leisure. Different attitudes lead to different consequences. Irish people work mainly to fund their leisure activities, however, Japanese is treated as the hardest workers worldwide due to overwork without any

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complaint. Education Education plays a significant role in propelling the development of technology. The education level in Ireland is extremely high because of a good educational system. More and more international innovation companies has established their research labs or institutes in Ireland, the main reason is that it is easy to recruitment the employees with higher educational background.

Technological Factors
Some of the technological factors that need to be considered when looking at the business environment include: A countrys ability to invest and spend on research, e.g. Ireland and UK. Tremendous support and ability of Europes government systems to invest and spend on research. The importance of maintaining up-to-date technology in the business environment. Infrastructure, this will include: Roads Buildings (factories) Railways Airports Laboratories Communication systems, this relates to the use of broadband access to the Internet. Awareness of new discoveries and technology advancement.

Findings and conclusion

As top managers they understand that what kind of factors has impact on success of Kerry Group, such as ensuring control, managing products capabilities and enhance technology level.in order to counter other competitors in the food process marketing and satisfy the increasing needs of people,in October 2012 Kerry Group has establish global technology and innovation center in Ireland. Technology relates to the use of knowledge. And over the years technology in the business environment has changed and has advanced to meet the needs of the modern world, technology change is still an on-going process. In the world of today, it is essential for companies such as Kerry Group PLC to be able to change and adapt to the business environment of today, therefore technology is playing a huge role.Analysis of technological factors in the business environment of Kerry Group PLC and any other company is likely to enable and influence success of such organizations on so many levels. This will also help companies to question themselves if they are able to survive in the world of today. It is highly recommended for such a company to invest more and

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spend more on research and development as it needs to answer questions such as how?, where?, what?, who?, when? - to establish its business activities in certain parts of the world, as it aims to efficiently and effectively supply globally. For instance Kerry Group ability spend on research has contributed to its success, e.g. technological lab in Ireland.It is also very important to bear in mind that updates on technology play a huge part in technological related companies, such as Kerry Group PLC. Hence there is a need for the company to have up-to-date lab facilities, machinery and equipment, therefore speed, efficiency and effectiveness leading to the success of the company. It is true that USA and Europe are suffering from painful economy recession. On contrast, in Asia such as China, India have become the lightest areas in the world economy . With the increase in the life standard, more and more Chinese people are likely to purchase and taste exploring foods including cheese , butter and others. Kerry Group has built up a factory in the south of China in 2005. However, in term of gigantic population and potential consumer marketing, China should be put the one of concentrated countries instead of overlooking. In conclusion, PEST and SWOT analyses are vital factors for maintaining the any organization success. Overall a good functional strategy will also determine the effectiveness and efficiency of Kerry Group, However Kerry group has still enough room to improve in their branding products globally.

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BIBLIOGRAGHY

(1)Exploring corporate strategy Gerry Johnson, Kevan Scholes, Richard Whittington Seventh edition, Pearson Education Limited P5 (2)Exploring corporate strategy Gerry Johnson, Kevan Scholes, Richard Whittington Seventh edition, Pearson Education Limited P398 (3)Exploring corporate strategy Gerry Johnson, Kevan Scholes, Richard Whittington Seventh edition, Pearson Education Limited P102. (4)Corporate Strategy Richard Lynch 4th Edition Pearson Education Limited P450. (5)Kerry Group plc (2012) Group Profile [online] Available http://www.kerrygroup.com/page.asp?pid=80 [Accessed 19 November 2012] at:

(6)Carbery (2012) Carbery Home [online] Available at: http://www.carbery.com/ [Accessed 21 November 2012] (7)BBC News (29 January 2012) Irelands recession to end in 2010 [online] Available at: http://news.bbc.co.uk/2/hi/8487231.stm [Accessed 23 November 2012]

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