Case Study of Wimm Bill Dann Foods (WBD)

Essay by wainilamUniversity, Master'sA, July 2009

download word file, 13 pages 0.0

Downloaded 61 times

Appropriate analysis instruments and Strategic Position of WBD.

The strategic position is concerned with the impact on strategy of the external environment, an organization's strategic capability (resources and competences) and the expectations and influence of stakeholders.

In the following, we will use PESTEL Analysis to assist for understanding the external environment in which WBD operates. Applying to the case of WBD, PESTEL factors can be defined as follows:-Political/Legal FactorsPolitical changes of the 1990s in Russia (collapse of the Soviet Union) had opened the country to foreign companies who were attracted by the capacity of the emergent market. It eased import of juices, which enabled foreign companies to occupy significant share of the Russian juice market.

Russia is heavily dependent on exports of commodities, particularly oil, natural gas, metals, and timber, which accounted for over 80% of exports, leaving the country vulnerable to swings in world prices. Russia's industrial base was relatively weak and increasingly dilapidated.

EconomicalAfter the debt crisis in 1998, inflation rose to an average of 86% in 1999. At that time, ordinary people wages falling by roughly 30% and their pensions by 45%. The economy was then recovered due to the devaluation, which greatly reduced the costs of production in Russia. Over 2000-2003, the economy has grew by nearly 29% and industrial production increased by 30%. The level of inflation in 2003 was only 12%. The people's real income grew by 60%.

Market growth in food sectors in Russia was largely determined by changes in disposable income, most of the products were positioned by price and not by distinctive qualities. The consequences of the financial crisis in 1998 had various implications for producers, processors and consumers. When the national currency lost 75% of its value and consumers became extremely price conscious, the switch to cheap domestic...