Kerry Group Case Analysis

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The Kerry Group began over thirty years ago in the south west region of Ireland. Beginning as a dairy and ingredients plant the company has now flourished into a global leader in the food ingredients and flavor products area. Kerry Group is headquartered in Tralee, Ireland and through its manufacturing, sales, and technical centers around the world, employs over 20,000 people. The company supplies over 10,000 food, food ingredients and other flavor products to customers in over 140 countries. Kerry Group also has manufacturing and sales facilities in over 20 countries. When Ireland joined the EEC or European Economic Community in 1973 many small dairies began to merge in order to compete with the larger dairy producing companies. Kerry also participated in the mergers with help from the milk suppliers of the County. Kerry acquired the State owned milk processing company along with its creameries. The Group also held a 42.5% stake in the NKMP Company for a total of 1.5 million Euros. At the same time, six of the eight independent Co-ops, which owned the other 42.5% stake, were acquired and became a new subsidiary of the Kerry Co-operative Creameries Ltd, which began trading in 1974. Kerry began as the smallest of six agricultural co-ops, a position that was soon to change. As Kerry began growing they developed some key values in the SWOT (strengths, weaknesses, opportunities, and threats) analysis that are the backbone for the success of the Kerry Group. The major strength of the Kerry Group is procurement. Procurement allows Kerry to use available global resources in specialty ingredients, seasonings, coating systems, sweet ingredients, nutritional systems, and specialty proteins; by doing this they are able to acquire the highest-quality raw materials. Another strength of Kerry is technological development. Through technological development Kerry is able to develop flavors and gain an advantage over the competition. Kerry gains this technological advantage through research and development and acquisitions. The weaknesses of Kerry Group include the firm infrastructure. The Group’s debt-to-equity ratio is inordinately high for a company of Kerry’s size. Another weakness is in Kerry’s Human Resource Management division. Management encourages the employees to think “Kerry” or in sense be “Kerryized,” if employees do not follow this style of thinking they are ... ... middle of paper ... ...leader in its selected markets through creativity and superior customer service. The Group is continuing to focus many efforts to expand its presence in global food and ingredients markets and its consumer foods businesses in Europe and abroad. The Kerry Group has recently put into action plans to purchase a specialty foods company in China that is expected to reach an additional 1.3 billion new customers. This venture will be a huge step for Kerry Group because it will be completely localized (a multi-domestic strategy), in that all business operations are expected to be turned over to the new facilities in China by the end of 2006. Today, Kerry has emerged into a leader in the food processing and ingredients business, reaching its goal set in the early 1980’s. The group has five basic areas of business; which include Kerry Ingredients, Kerry Bio-Science, Kerry Foods, Kerry Agribusiness, and Mastertaste. If Kerry group continues to build from their corporate and business level strategies and continues to evaluate their SWOT analysis they will stay ahead of the competition and continue to remain a leader in the food ingredients and processing sector.

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