Van Heerden Foods is one of the largest food producers in South Africa whose greatest business strengths were powerful brands and loyal customers. The company has a strong track record as an innovator and a well-funded R&D budget. However, the food manufacturer has some weaknesses like the recent loss of top management talent to its rivals and a cultural resistance to change that reduced response to market forces. In addition some key threats have been developing for several years including the success and increased market share of less costly, private-label brands. Secondly, the South African market has been a key target for various overseas manufacturers who are using aggressive marketing strategies. Moreover, local rivals have been quick to respond to the increasing consumer demands for less fattening and healthier food choices. The firm’s new Chief Executive Officer has been evaluating the business by looking at these dynamics in order to make the most appropriate, though unpopular decision that would get the company back on track.
Decision-making Process Taken by Don Stransky and Van Heerden:
After analysis of the strengths, weaknesses, opportunities, and threats of Van Heerden Foods, the CEO had to examine whether to exploit an opportunity to acquire a smaller rival, JF Foods. This competitor is renowned for its ability to produce quality ready-to-eat, comfort foods and snack foods. JF Foods not only has a considerable portion in the private label market but produces foods that target the growing sector of the market. Through acquisition of JF Foods, Van Heerden could obtain their core competencies for innovation. Stransky is renowned for successfully spotting new market opportunities by actin...
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...Financial Officer against the acquisition initiative. The inappropriateness of the acquisition attempt is shown in the fact that many competitors were adopting such strategies and customers contentment with current products. Therefore, I recommend that Van Heerden Foods adopt an effective pricing strategy since customers are buying on price in the current economic climate.
The Chief Executive Officer of Van Heerden Foods, Dan Stransky, needed to make a decision that would help bring the company back on track to overcome the difficult times it was experiencing. As evident in the case, Stransky used a different decision-making style or approach that made him consider the acquisition of JF Foods. However, the company’s decision-making process was incomplete and ineffective since the CEO and senior managers did not complete all the steps in the process.
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