TableofContents

TERMSOFREFERENCE..............................................................................................................................2

EXECUTIVESUMMARY..............................................................................................................................3

INTRODUCTION.........................................................................................................................................4

BEFOREUPSTREAM...................................................................................................................................5

UPSTREAM................................................................................................................................................6

CONVERSION/MANUFACTURING.............................................................................................................7

DOWNSTREAM..........................................................................................................................................8

BEYONDDELIVERY....................................................................................................................................9

INFORMATION........................................................................................................................................11

RECOMMENDATION...............................................................................................................................12

CONCLUSION...........................................................................................................................................13

REFERENCES............................................................................................................................................13


TERMSOFREFERENCE
Discussing the six level stakeholder model which are:

Before upstream

Upstream

Conversion/manufacturing

Downstream

Beyond delivery

Information

EXECUTIVESUMMARY

The Brookside six level stakeholders is a study based on the supply chain levels from before
upstream to beyond delivery. In this research paper we have outlined what Brookside Dairy limited
is. During our research we found that Brookside Dairy started operations in 1993 soon after the
liberalization of the dairy sector in Kenya. From the knowledge we have learned from Business is
that there are different stakeholder levels namely before upstream, upstream, conversion,
downstream, beyond delivery and information. From the following we found out that this is
found under the supply chain and that it is crucial for any organization to follow the steps or rather
levels stated above. For example if we look at suppliers, without flexible and reliable suppliers,
the business could not guarantee that it will always have sufficient high quality raw materials
which they require to produce their output where in this case dairy farmers are the key suppliers
of Brookside dairy limited.
In addition during the research we discovered that investors are key for companys growth. If we
look at Brookside about US$18.7 million was pumped into Brookside dairy limited which
propelled Brookside to what it is now, the largest dairy in East Africa.

INTRODUCTION
Brookside dairy limited is a company that started operations in 1993 soon after the liberalization
of the dairy sector in Kenya. It is currently the leading dairy in Kenya with a daily through put of
700,000 liters of milk per day. They have a workforce of 1530 employees whose skills are up
graded with technological change. They also process and distribute a wide range of products,
which include fresh pasteurized milk, cream, butter, yogurt, lala, ghee, and long life milk products.
The company was formally registered under the co-operatives societies act on 26th November
1996.Since inception, quality has been the driving force behind the companys growth. This is
coupled with overwhelming support from the farmers as well as the consumer population. In order
to secure solid base in procurement of raw milk, we aim to establish collection centers
countrywide. Already some are commissioned namely Kiganjo in Nyeri, Eldoret and Ol kalou.
Good quality milk is filtered, cooled and stored in vertical silos pending further processing
depending on the required milk products by the consumers.
Stakeholders are individuals and organizations that directly or indirectly affect and are affected by
a business organization

Primary stakeholders: Affect and are affected by the business directly(suppliers,

employees, creditors, shareholders and investors)

Secondary stakeholders: They dont affect and they are not affected by the business
directly(government, special interest groups, competitors, trade unions, local communities)

Brookside dairy limited has different stakeholders that help in day to day operations of the
company. Below we shall base our research paper on the six level stakeholder model listed above
in the terms of reference.
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BEFOREUPSTREAM
This is level is where the company looks at the different possibilities can make more profit. So
with the help of investors and shareholders they are able to chip in some money that will help
establish a new product. Brookside was originally an investment by Acacia Fund where it achieved
a successful exit, they invested US$18.7 million in 2009.The transnational firm has more than 190
production plants and around 102,000 employees.
Abraaj is a long-time partner of Brookside Dairy, where it has had investments via Acacia Fund
and Aureos Africa Fund since 1998. In 2009, Abraaj injected about $18.7 million in Brookside
through Aureos for a minority shareholding. Danone and others are coveting this shareholding,
now up for grabs. This is not the first time Danone and Abraaj have collaborated in Africa. The
French group NOW plans to acquire shares at Kenya's Brookside Dairy.
So as you can see investors have a great impact on the growth of a company, without an investors
the company wont receive funds that will propel the business. As you can see above
the Abraaj group with is one of the partners invested US$18.7 million into Brookside dairy limited
company which propelled into what it is now. Currently, the companys product line includes fresh
milk, long life milk, yogurt, butter, and ghee. Prior to Abraajs involvement, Brookside Dairy
controlled 22.4% of the Kenyan processed milk market (by intake), a figure that was soon to rise.
Now the largest dairy in East Africa, Brookside is serving markets in Kenya, Uganda, and
Tanzania, in addition to exporting its products throughout the Middle East and North Africa. The
partnership has been a success, and the company is currently contemplating further expansion
opportunities

UPSTREAM
In this level, companies have successfully identified a customers needs and wants. For them to
satisfy this target customers they make use of the business resources which are: Money, Men,
Machines, Materials, Management. Some of the stakeholders involved in this level are the
suppliers. Without flexible and reliable suppliers, the business could not guarantee that it will
always have sufficient high quality raw materials which they require to produce their output. It is
important for a business to maintain good relationships with their suppliers, so that raw materials
and components can be ordered and delivered at short notice, and also so that the business can
negotiate good credit terms from the suppliers i.e. buy now, pay at a later date. Brookside dairy
limited main suppliers are farmers who have come together to form cooperative societies that deal
with dairy farming. Some of the cooperatives are Sabatia and Nyala Dairy which was incorporated
in 2001 and in the relatively short period of time since its inception, it has established itself as a
major supplier of milk in Nyandarua County to Brookside Dairy LTD with a substantial amount
of business generated from both selling of milk and from the support services to the farmers. It has
established a good working relationship with the farmers in the larger Nyandarua County and is
competing well with established diaries and with other emerging and new industry players. Nyala
Dairy was organized to be responsive to the needs of the farmers in the remote locations of
Nyandarua and to link the farmers to the market for their dairy products hence providing the added
value to them and also providing them with the knowledge and inputs to enhance their production.
Brookside has introduced a method called grassroots collection network. Through this network of
strategically placed milk collection and cooling facilities, farmers are able to deliver milk to the
company at its freshest and with minimal wastage. Through this method they have been able to
collect milk from over thirty counties countrywide.

CONVERSION/MANUFACTURING
In this level raw materials are converted and manufactured into the target customers needs/wants.
Employees are the main stakeholders here because they are paid a salary to run the business and
ensure they continuously provide goods and services that the target customer wants. This group
also has an obvious financial interest in the company, since their pay levels and their job security
will depend on the performance and the profitability of the business. It is employees who perform
the basic functions and tasks of the business (producing output, meeting deadlines and delivery
dates, etc.) and over recent years their traditional role has started to change. They are often now
encouraged to become involved in multi-skilled team working, problem solving and decision
making - thus having a significant input to the workings of the business.
Brookside dairies limited being a global company is characterized by a division of labor which
allows its employees to specialize in particular roles to occupy designated objectives. Division of
labor is further divided into either by function where there are activities such as finance,
production, marketing, personnel and research and development. The managing director is the top
most at the managerial roles of the Brookside Company next in authority are the production
manager, marketing manager, personnel manager. The managing director is the person who is
responsible for the performance of the company, as dictated by the boards overall strategy. He or
she reports to the chairman of the board of directors. The production manager is involved with the
planning, coordination and controls the dairy products processing. They ensure that the dairy
products and services are produced efficiently and that the correct amount is produced at the right
cost and level of quality. The marketing manager is in charge of marketing activities for the dairy
products and therefore handles formulating, directing and coordinating marketing activities so as
to influence customers to choose the Brooksides products over those of competitors.

DOWNSTREAM
The downstream stage in the production process involves processing the materials collected during the
upstream stage into a finished product. The downstream stage further includes the actual sale of that product
to other businesses, governments or private individuals. The type of end user will vary depending on the
finished product. Regardless of the industry involved, the downstream process has direct contact with
customers through the finished product. The major products of the dairy processing enterprises in

Kenya include: Pasteurized and Ultra-Heat Treated (UHT) milk; Mala (Fermented milk) and
Yoghurt; Cheese; Ordinary cheese and Processed cheese; Cream; Butter; Ghee; Ice-cream;
Condensed Milk and Sweetened condensed Milk;
Milk in surplus districts, such as Nandi, Uasin Gishu, Bungoma and Meru, the distribution outlet
is the processing plant, either that of the KCC or that of the cooperative or private sector [DANIDA
(1991)]. The transport, as arranged, takes milk from the producer/member direct to the plant on
the same day, usually by later morning. The societies that have coolers have milk transported to
the place where the cooler is located. This could also take care of the evening milk to be kept
overnight for transportation to the plant the following day or for subsequent sale by the society in
the local market. Brookside has grown since its inception to become east Africas leading dairy
manufacturer. It currently exports its products in Uganda, Tanzania, Nigeria, Rwanda, Indian
Ocean region and also the Middle East. They distribute this products by flight that have cooling
facilities.

BEYONDDELIVERY
So far we have able to cover three levels of the supply chain. Beyond delivery is anything beyond
manufacturing of products and the distributions. Stakeholders in this level include customers,
competitors, government. The government affects the workings of businesses in many ways:

Businesses have to pay a variety of taxes to central and local government, including
Corporation tax on their profits, Value-Added Tax (V.A.T) on their sales, and Business
Rates to the local council for the provision of local services.

Businesses also have to adhere to a wide-ranging amount of legislation, which is aimed at

protecting the consumers, the employees and the local environment from business activity.

Businesses will be affected by different economic policies, (for example, if interest rates
are increased, then this will discourage businesses from borrowing money since the
repayments will now be significantly higher). However, businesses can also benefit from
government incentives and initiatives, such as new infrastructure, job creation schemes and
business relocation packages, offering cheap rent, rates and low-interest loans.

The government makes sure that Brookside Company does not dispose waste products
anyhow. It ensures that the environment is clean and any kind of pollution is minimized.
However Brookside Dairy has adopted a structured waste management that is branded ' The 3
R Strategy'. Reduce waste such as; water usage and chemicals, Reuse what can reused, and
Recycle what can be recycled. The company has aligned its waste management alongside the
requirements of the Environmental Management Coordination Act which provides for a
cleaner and greener environment. Once all solid and liquid waste from their production line is
gathered, the solid waste is sorted out into plastic, glass, carton, paper, metal and electrical
gear. Plastic, carton, paper and metal are collected by contracted National Environmental
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Management Authority (NEMA) licensed recycling companies and are disposed of according
to approved procedures. Part of the waste such as TR milk packaging is reused as plant
seedlings; some of the solid waste is also incinerated at the plant. Liquid waste undergoes biotreatment for purification before being reused to water trees under the greening program.
Competitors are stake holders of a firm. Brookside dairies limited has many competitors such
as Kinangop dairies limited, Daima milk etc. Buzeki dairy was earlier a competitor of
Brookside Dairies but last year Brookside Dairies completed the acquisition of Buzeki Dairy,
the maker of Molo Milk and Kilifi Gold. Why consider competitors as stakeholders? Because
every company can, directly or indirectly, affect the performance of its competitors. Often a
marketing plan is designed to capture market share from a particular rival or reinforce customer
loyalty in the face of competition from a new up-and-comer. Doesn't that make you a
stakeholder in your competitors' performance (and your competitors stakeholders in your
performance)? A competitor affects a firm and is affected by firm in certain ways such as:
Pricing strategies- when setting prices, companies have to consider prices of competitor goods
and services. Taking Brookside as an example, they have to charge similar prices as their
competitors as a price set too high would lead to a fall in demand of their product and
consumers switch demand to competitor firms. Therefore the same applies to Daima and
Kinangop, they have to consider prices of Brooksides products and charge accordingly. This
proves that they affect other firms and are affected by them at the same time.
Quality control- when firms face competition, they compete in terms of quality. Consumers
also consider quality when buying products therefore they buy the products that are the most
reliable. Since firms would want to attract more customers, they manage their quality and that
way, consumers are happy and firms can compete with each other for customers. Customers
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are vital to the survival of any business, since they purchase the goods and services which
provides the business with the majority of its revenue. It is therefore vital for a business to find
out exactly what the needs of the consumers are, and to produce their output to directly satisfy
these needs - this is done through market research. The goods and services must then be
promoted in such a way as to appeal to the target market and to inform them of the availability,
price, etc. Once the goods and services have been purchased by the customer, it is essential
that after-sales service is offered and that the customer is happy with his/her purchase. The
business must try to keep the customer loyal so that they return in the future and become a
repeat-purchaser.

INFORMATION
Businesses have used the intranet, extranets, the internet and other digital technologies to expand
their businesses communicate with their target customers as well. The internet was created way
back in 1969, during the cold war. The internet spreads across the globe and consists of countless networks
and computers, allowing millions of people to share information. Data that travels long distances on the
Internet is transferred on huge lines known collectively as the Internet backbone. On the other hand an
intranet is a collection of private computer networks within an organization. An intranet uses network
technologies as a tool to facilitate communication between people or work groups to improve the data
sharing capability and overall knowledge base of an organization's employees. In addition an extranet is a
computer network that allows controlled access from the outside, for specific business or educational
purposes. In a business-to-business context, an extranet can be viewed as an extension of an organization's
intranet that is extended to users outside the organization, usually partners, vendors and suppliers, in
isolation from all other Internet users. In contrast, business-to-consumer (B2C) models involve known
servers of one or more companies, communicating with previously unknown consumer users. ICT has

provided ways for employees working in an organization to send updates on how the business is
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doing. ICT has also enabled organization not only to do things more efficiently, but also to do
things in a completely different way or to reshape the complete scope of the business itself.
Brookside has been able to expand its business from where it was to where it is. So the internet
has enabled Brookside dairies to get to where it is now, as I had mentioned earlier on that the
internet spreads across the globe and consists of countless networks and computers, allowing
millions of people to share information. So with this facility Brookside has been able to reach out
to many people outside Kenya and also within. In addition has also enabled them to be able to
inform people about what the company is all about. The internet has given Brookside the strength
to meet their short term targets and also some of their long term targets.

RECOMMENDATION
Inattention to potential risks. An inability to define potential risks and develop mitigation
strategies for those risks that have a high probability of taking place could jeopardize business
continuity and profitability. Conversely, Brookside dairy limited should tackle risk as a top
priority and will be less likely to face major issues related to scalability and responsiveness to
volatile demand. Therefore, it needs to create a robust risk mitigation plan that addresses some
of the most common and critical supply chain-related risks including supplier quality and
performance, commodity price volatility, more complicated product and service mix, lack of
visibility to outsourced operations and relationships, inadequate physical distribution
infrastructures, and volatile transportation costs.
Overreliance on past performance to predict future sales. If theres one certainty about todays
economic environment, its that nothing is certain anymore. Customer needs are continually
evolving, and massive shifts in market dynamics can hit with speed and without warning. That
makes plotting a course for the business extremely challenging. Brookside dairy limited should

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track actual sales as they happen so the supply chain network has the information necessary to
react more quickly to any changes and fluctuations in customer demand. But they should also use
more than just sales data to help make critical business decisions. Real-time inventory levels, cash
flow, and financial metrics also are important to giving decision makers what they need to create
forecasts that recognize current and potential future changes that could affect customer buying
patterns and the companys ability to fulfill evolving customer needs.

CONCLUSION
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customers
need/want. Each stage need not be presented in a supply chain. The appropriate design of the
Supply chain will depend on both the customers needs and the roles of the stages involved.
Brookside dairy limited has managed to expand and thrive its business with the help of a good
supply chain and the stakeholders. In conclusion, a good supply chain dictates a business and a
bad one ruins a business. Brookside dairy limited speaks for itself.

REFERENCES
Kibera N., Introduction to Business, 1996, Kenya literature Bureau
Griffin W, Business Essentials, 2013. Pearson education Limited
Http://www.brookside.co.ke
Http://www.kdb.co.ke/
Http://www.dairyreporter.com/Manufacturers/Danone-quiet-on-Kenyan-Brookside-Dairyacquisition-rumours
Http://nyala.co.ke/the-nyala-dairy/

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