A Review of the Strategic Situation of Kepak: an Irish Meat Processing Company

Introduction: Being the largest sector in the Irish agriculture economy, it is lot more dependant on the beef industry. In Ireland, about 80% of the meat produced is exported which talks tall about the production as well as the strategic situation of the meat industry. Kepak group food excellence is one of the most reputed meat processing company of Ireland. Starting from a butchers retail business Kepak grew up to among the leading food processing companies not only in Ireland but also in Europe. Keeping Kepaks situation in mind, the the Beef Industry Business Environment including porters five forces and Pest analysis and the Kepaks Strategy would be entertained along with a critical analytical conclusion. Analysis of the organisations business environment and of industry survival and success factors: Industrial environment includes economic situations along with its regulation in terms of political and social conditions. The participants in the industrial market are subjective to them rather than being influenced by the market. In the beef industry business environment there are many elements ought to be considered for the effective growth of the business environment.

Porters five forces:

Porters five forces is in fact a horizontal vertical competition. There are some competitors which force from the horizontal side like replacement of products, emerging rivals in the industry as well as some new contestants. Similarly, from the vertical side there can be bargaining power of customers as well as suppliers. In industrial economies, Structure-Conduct-performance paradigm is the best suitable phenomenon and the Porters five forces is based on this paradigm. The five forces are: Threat of new entrants: In the beef industry business environment there is always the threat of a new entrant who could sabotage all the efforts which have been put in by the organization earlier by giving some lucrative options to the customers as well as the suppliers. The Kepaks meat processing had to face such a scenario in late 2008 when a Brazilian protein company launched themselves in the Northern part of Ireland and pose a serious threat to the beef industry business environment. Whenever there are high returns in the market, one should have to be prepared to face some new colleagues, might be rivals in the town who decrease the profit ratio of the existing industries. Threat of substitute products or services: There has always been a threat to the industry of some substitute products or services. Such alternates harm the reputation of the company to a great deal. In the beef industry there are a many ways to launch some different services to lure the customers. The company should keep itself well-informed of the consumer-buyer needs and try to meet the needs of the people accordingly. The customers are always inclined to the products, produced outside of the realm. For example beef is extensively used in an area but an alternate beef with pink color can change the customer's mind. Bargaining power of customers (buyers):

Keeping in view the bargaining power of the customers, the industry has to deal with the concentration ratio. It is the ability of the customers to under pressure the company and the beef industry business environment can easily be pressurized by the customers because of customers sensitivity to price change. Bargaining power of suppliers: The suppliers are a backbone as well. The suppliers bargaining power can be a source of influencing the company. The beef industry business environment entails suppliers power of bargain along with and has to co-operate in this regard. For example the suppliers may stop supplying the raw material. Intensity of competitive rivalry In an industry there are always open opportunities for the industries to come up with innovations or make the other industry to put to it.

PEST analysis tools:

In a business environment there are certain tools that ought to be obeyed for the growth of the business industry. The business environment always progresses if it is handled effectively politically, socially, economically and technologically. Political stability in the area is the key to the growth of the business environment along with the trade and tariff laws of the area, tax policies and environmental laws. The government is in fact the care taker of the health and other commodities of the nation thus the business environment has to be in correspondence with the local laws. Socially in a business environment, there are cultural traits, health consciousness, age factor and safety issues. The social factors in fact increase or decrease the demand and supply of the products of any company. In the beef industry business environment, social factors attains the most important tool for a better business environment. Economically, inflation rate determines the success of any business environment. Other than that economic growth, exchange rates etc also correspond to the business environment. Advanced technology always lends a helping hand in the growth of a business environment. Technology increases the production along with accuracy and efficiency. Innovation in the business environment is due to technological advancement.

Success of meat processing company:

Keeping in view the industry environment, the meat processing company has to do a lot of things to succeed within the industry. The meat processing company has to fully come up with the porters five forces to compete other industry. The company shall have to be aware of all the new trends and innovations within this industry along with coming up with new ideas beforehand. The company shall

have to be technologically well equipped. The abeyance of the local laws keeps the pace of the company growth steady and economic rates decides the growing graph of the company.

Analysis of Kepaks Strategy:

Kepak, being a professional vibrant business, has grown up to one of the Europes leading meat processing companies. Kepak has created an identity in the minds of the customers and buyers for its products and its organization. Its strong customer relationship is the core formula in the success of the company. The kepak has been innovative in regards of its products and has always been committed to food safety along with its excellence. The kepak made itself acquainted with the changing approach and requirement of the market along with the controlled prices. Keeping kepaks positioning in mind all these aspects have made the company grow with a rapid pace and with sustainability. Kepak has always differentiated itself in terms of strategy which has constantly given kepak the competitive advantage. The kepak business is divided in to three strategic business units. 1) The kepak meat division. (KMD) 2) The kepak convenience foods. (KCF) 3) The agra trading. All the three strategic units collectively play their part in the expansion and escalation of the companys reputation and economy. The kepak meat division : Meat is the core business of the kepak, accounted for more than 70% of the revenue. Most of the volume of the beef was sold to the Irish and EU's retailers under their own name and about 25% of the cut-meat was the highest quality product. As this meat went through specialized programs under the banner of kepak where kepak took the control of the cattle from the birth. This amounted for the finest quality product fir the customers which improved the name and brand of kepak. The 75% of the cattle were brought to kapok 2 days before the slaughter thus they had a higher fat ratio and less juicy meat. The Bord Bia Beef Quality Assurance Scheme (BQAS) tested out the cattle and then brought to kepak. The kepak dealt with ten major customers who under the tag name of kepak distributed the meat all over the Europe. With this scheme, the kapok advised the retailers the criteria to attract the customers by telling them how to display the product, what type of Stock-keeping units be added and how to take the meat out off the case. In this way the scheme yielded benefits for both the retailers and the kapok. This has created our customer clientage and this has never shown any adversarial response.

Furthermore, the consumer insight is the key to success to the kapok. The innovation in meat-cutting as well as meat cooking brought the families closer to kepak. The latest Heat-and-serve product is the most efficient solution in cooking. The customer feels happy and contented with such an agile cooking. The kepak convenience foods: The convenience food business became the symbolism of the kepak back in 1978 when kepal started beef burger business. Right after the start of McDonald in Ireland, kapok introduced the Quarter pounder, a new juicy variety in the town. Other than that kapok produced its own beef burger in Ireland and U.K. In 1996, Big Al's was launched in Ireland which was frozen beef burger products. Furthermore, Rustlers, a microwave based burger was launched keeping the U.K customers as its core target. Speedy snacks and Ugo's followed the tradition of innovation. With the rapidly growing business of the food chain, the kapok started rolling out Rustlers in the other markets across the Europe. The Agra Trading; The Agra trading became the trading arm of the kepak group and started selling beef cuts along with poultry, seafood, fruits, vegetables etc. now the markets of the Agra trading reached up to Egypt, Russia, Africa, EU and the Middle Eastern nations. Analyzing the capabilities and resources of the kepak group, it could easily be made clear that it fits into the list of factors essential for the success of the industry. The kepak group has all the resources from white meat to pink meat, from vast grasslands to other fodders. Other than that the kepak has an experience of more than 50 years in the field of meat and they have been continuously competing the upcoming rivals efficiently. This shows their commitment to their work as well as their innovative thoughts in terms of new trends and requirements. Three main capabilities of kepak: Grass fodder: In Ireland the fodder used as the food material for the cattle is natural grass fodder. Ireland is a country which is rich in rainfall and there is excessive grasslands. In kepak, the cattle are left to graze in open. Kepak does not rely on unnatural foods even if they produce a beef product in 15 to 20 weeeks rather than kapek relies on natural food which produces a ready beef in 30 to 35 weeks. This fodder not only produces quality juicy meat but also differentiates the color of the meat from other sources of meat. Consumer-producer relationship: Kapek rightly takes the opportunity of a consumer - producer relationship. The producers are the right arm of the kepak group whereas the consumers are the strength of the group. The kepak group only produces quality products for its customers. Another aspect of the kepak group is that it keeps pace

along with the moving traditions and customs in terms of meat usage. The kepak group also considers the age factor in choosing the appropriate type of meat for the relevant age group. Innovation with the need of the time: Above all, the kepak group knows the changing taste and traditions and thus modifies its products according to the wishes of the people. To compete the competitors in the arena, it is the foremost Fairplay in terms of business. And the kepak has been using this technique up to its maximum level. That is why, the kepak group has never seen a downfall since its rise. Keeping in view the industry success factors, kepak has been fully aware of the changing trends in the industry and has been improving its production as well as its consumption with the passage of the time. The kepak is well aware of the porters five forces. This is evident from the fact that no new entrant has touched that remarkable achievement as that of kepak. Other than that kepak has been following the political, social, economic and technological aspects of the growth of its company and organization.

http://www.businessdictionary.com/definition/industry-environment.html#ixzz2RCLODrI0 http://www.agrakepak.com/index.php/en/about-us/the-company/ http://www.kepak.com/web/guest/trading http://www.agrakepak.com/en/home/ http://hbr.org/product/kepak-and-the-future-of-the-irish-beef-industry/an/511070-PDF-ENG