Running head: SAPUTO SWOT ANALYSIS 1

Saputo SWOT Analysis

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Saputo SWOT Analysis

Introduction

The information below gives an in-depth analysis of the internal as well as the external

information of Saputo Dairy Corporation; dairy products processing and Production Company

that is based in the Canada but has other main branches in the United States and Australia.

Company Overview

Saputo Inc. is a dairy company based in Montreal, Canada. The company was founded in

1954 by the famous Saputo family. Saputo currently operates several markets, producing a large

variety of dairy products (Akilen et al, 2016). Some of these products include cheese, milk,

cream produce and fluid cheese. On the global scale, Saputo is rated as one of the best dairy

processors not only in America but across the world. This can be attributed to different mergers

and acquisitions that has enabled the company to predominantly expand after achieving

significant growth in Canada (Courtney et al., 2016).

Saputo operates mainly in Canada, Australia and the United States, but its products are

sold in more than forty countries across the globe. It is the leading dairy product processing

company in Canada, with cheese being the leading product. Brands such as Dairy Land, Dairy

Star and Friendship Dairy are common among the Americans. The Australians mainly import

brands such as Scott burn, Treasure Cave and Woolwich Dairy. Saputo has significant presence

in Europe especially in Germany and Wales, where it operates some stores. Some of its products

such as cultured milk finds its way to South America, particularly Argentina where people

preferred it over the locally made dairy products (Chamberland et al., 2017). Other diary brands
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exported to Argentina include Alexis de Portneuf and Cracker Barrel. Cracker Barrel is Saputo’s

trademark brand in the country and it is used in the licensing issues.

Key Facts

The company was founded by Lino as a family business starting with a small processing

plant in Montreal. With an urge of making his own money, Lino convinced his father to start a

five hundred-dollar personal business. Saputo grew massively after its formation and throughout

the 1960s. The growth saw it become the leading provider of mozzarella products in the whole of

Canada. By late 1988, Saputo expanded to the United States and began investing in two cheese

firms. This was aimed at having a wider geographical reach. The company began trading

publicly in the US in 1997 after the acquisition of the Stella Foods. The acquisition continued

throughout 2000 and by the year 2002, it acquired Dairy word Foods as well as the marketing

arm of the Agrifood International. This resulted in a massive production of the dairy milk and

Cheese.

Business Description

Saputo Inc. employees advanced manufacturing and marketing strategies to gain high

customer satisfaction and have competitive advantage over other companies in the dairy

industry. The company uses advanced technologies to process milk leading to high quality

products. By 2016, Saputo had over twelve thousand employees across the main branches in

Canada, Australia and the United States. In the 2015, the company recorded a revenue of about

$9,388.4 million making nine hundred million profit. It has always realise an upward trend in

terms of the net profit accrued each financial year.

Objectives
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Saputo Inc. has high expectations for growth and more diversified production. The

company wants to move from the current eighth global position in dairy processing to number

one. It wants to attract and retain the existing more customers through provision of quality

products and satisfaction of their needs. To implement its long-term growth objective, the

company plans to expand to Latin America, Oceania and China through mergers and

acquisitions. China with 1 billion people, is the main target of the company. Saputo also expects

to increase earnings from its stocks to $1.75 per share in the next year. The management plans to

spend $4 billion for this objective to be realized.

SWOT Analysis of the Company

For any company to get the information that is best for decision making, it is has to

conduct its SWOT analysis. S-W-O-T (Strengths, Weaknesses, Opportunities, and Threats)

analysis gives the management an overview of the company with a view that captures all the

areas from inside to the outside of the company. A SWOT analysis on Saputo Inc. will allow the

management teams to identify different factors within and outside the company that will

positively influence future performances. For a dairy processing company, its strengths and

weaknesses are all part of the internal factors. On the other hand, opportunities and threats results

from external environmental factors. The SWOT analysis forms part of the corporate process of

planning procedures and goals that are directly linked to performance of the company in the past

years and those to come. The four components of SWOT are all part of the goal accomplishment

strategy of the company and are discussed below.

Strengths
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Saputo Inc. has numerous strengths that help it nullify competitors or gain competitive

advantage over them. The first strength is that the company has a large market which is

distributed across the globe. Its products are sold and used in over fifty countries. Apart from

large customer base, their products are well known and as result beating easily their competitors

in the market. Some of the well- known brands include Alexis de Portneuf, Dairy land,

Danscorella, Friendship Dairy, Scott burn, and Woolwich Dairy. These brands are well known to

the customers who cannot resort to buying any other dairy product from other companies.

Customer loyalty is one of the hardest things to achieve in business. Once it has been achieved,

the company should then have not to worry much about the other companies since this is a big

strength which is difficult to outdo. Forming a client base is one of the best strategies that a

company can use to increase sales. On the other hand, high quality products is good strategy that

can be used to ensure customer satisfaction and establish a loyal client base. Saputo has

implemented these two strategies and have positively worked for them.

Another strength is that Saputo has more than enough processing plants with more than

five thousand employees. The dairy section alone has more than sixteen processing plants that

are solely used for manufacturing. Apart from these, they have eleven plants and networks that

are used for distribution within the United States and Canada. The high number of processing

plants allow the firm to produce enough dairy products and distribute them to the other channels.

According to reports, the company has experienced a higher volume of sales and a better product

mix as well as low transportation cost. The well-established distribution channels has helped the

company reduce the cost of transportation.

Moreover, Saputo has several consolidated distributions for manufacturing, marketing

and product distribution for over ten thousand employees. It has also various grocery product
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sectors which operate over five Canadian plants performing under thirty-five networks. These

sectors are used in the delivery of products to the available warehouses and other distribution

centres.

Apart from the internal strengths, the company has one of the most skilled workforce in

the dairy processing industry. This is because it only recruits the best workers. The fact the

company generate more profits in overall can be considered as its strength. Throughout the years,

it has often recorded more than a ten percent profit in its turnover. Additionally, the company has

a reduced labour cost due to privilege of employing skilled people. The company often motivate

its employees which in turn improve their morale and overall performance. Furthermore, the

company is well established, meaning that there is a huge barrier to the entry of other companies

with similar business models.

Weaknesses

Saputo dairies has got various weaknesses which needs to be looked into. One of them is

the increased level of promotions of its products. The amount of money that is needed to do

promotion put the company in a jeopardy as the cost is added to the production cost. However,

without promotion the sale of its products may decline affecting on profits been realised. The

company will have to employ cost-effective strategies that will popularize their products among

the customers and at the same time reducing the amount of money spent on promotion. The other

issue is the high cost of raw materials such as milk and preservatives. Milk as the main product

must be present for operations to take place. The cost of milk has been rising tremendously in the

recent years and this is not healthy for business. The increasing costs has been caused by high

revised prices of milk in the operational formulae.

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Moreover, Saputo faces unfavourable relationships with the customers in its existing

block markets that was fuelled by failure of the company to provide them products that they

consider affordable (Maselli & Hekmat, 2016). The company need to look into this to bring back

their image back to normal. Saputo dairies also faces highly competitive selling prices and high

export market prices. In order to outdo the competitors, the company is sometimes forced to

enter into price competition with other firms. This forces the company to sale products basing on

market prices and not what it is wants. The products will have to be sold at lower prices to cater

for competition. The presence of numerous competitors in the market proofs that the company

has weaknesses. Therefore, it must find ways of dealing with them. The need for extensive

research is another issue in the dairy industry. Research requires huge funding starting from

personnel involved, materials, analysis and development of the surveys. This further complicates

business operations as research must be done to enable the company competitive. Costs and

expenditure will obviously increase as a result.

Opportunities

As much as Saputo faces several challenges, the company has got various opportunities

that can help it grow to even further heights. The first opportunity is capital investment which is

involved in speciality growth of cheese products. Increased investments has evidently let to

increase in productivity and more sales. Saputo also has an opportunity of adding more additives

into the milk products. This will enable the company diversify its products and strengthen market

presence. There are other dairy products that can be invested in to allow the firm to achieve high

growth levels. This will results from expansion into other areas outside the already existing

markets.
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The other opportunity that Saputo Dairies have is the high anticipation of the increased

prices and the demands for various dairy products. This does not seem to come to an end anytime

soon. Each and every day there is an increase in demand for dairy products. This means that the

company can improve on production and expand beyond the already existing huge market base.

The company also has an opportunity of setting up production plants in other countries potential

for growth to allow for further expansion. The export market in countries such as Argentina

seems to be on the increase which is a good thing for the company. The other opportunity is the

recent increase in demand for the snack cake, a new product in the market. This has led to a

sharp rise in the volume of sales of snack cake and a surprise package in the milk supply

department. The high profitability rate by the company is a sign of further opportunities that are

being invested in. The income level has also been on the rise. These are opportunities that have

to be noticed and earnest as possible.

Threats

The company has several threats that it has to deal with in order to enhance profitability.

Firstly, there is constant price fluctuation in the market, especially in the foreign exchange rates

between the United States and Canada. The fluctuating of exchange is always a challenge to

traders who sometimes fail to anticipate the prices of the arriving products as the prices keep

changing. The exchange rate used for the Canadian dollar and the United States dollar is never

constant, making it difficult to anticipate the cost and sales. This is usually a worry for the

producers. Also, there is a decline in the consumption of the consumer milk. In the United States,

many people are quitting milk consumption due to health reasons and personal issues. There are

also numerous people not consuming milk for the same reasons. Even though the sale of cheese

and other products have not fallen, the sale of milk has dropped due to a fall in the taste and a
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change in the diet. The supply of milk is another issue for the company. The supply is not

constant due variation in weather conditions and competition from other companies.

Competitors

Saputo has several competitors which produce the same products. This means that they

have to find ways to outdo the competitors by providing the best possible products or offer other

means that will give them competitive advantage. These companies include Nestle corporations

Limited, Unilever Producers, and Danone manufacturers. Apart from producing same products,

these companies have also implemented strategies similar to those by Saputo.

SUMMERY OF SWOT ANALYSIS OF SAPUTO DAIRY IN THE UNITED

STATES

Saputo Dairy

Parent Company Name Saputo Inc. Company

Category of Produce Food Processing and Marketing

Business Sector Involved Foods and Beverages

Company Tagline/

Slogan We are Standing Together and Looking Ahead to a whole new world of cheese

USP
Employee Craftsmanship and the company passion and as well as the
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innovations that are used in making sure that the company t continues the

production of the products that have won several awards as some of the best.

Segment, Target Group and Positioning (STG)

Products produced: cheese, milk, yogurts, dairy ingredients, dairy cakes and

Business Segment snack-cakes

The Business Target

Group Maidens, Housewives, hotel chefs, restaurant workers and high class hotels

Saputo Diary is Committed to offering its customers with the best and the highest

Business Positioning quality products.

SWOT Analysis

1. The products of Saputo are sold and used in over fifty countries. Some of the

most common selling brands include. Alexis de Portneuf, Dairy land and

Danscorella, Dairy Land, Dairy Star and Friendship Dairy, Treasure Cave and

Woolwich Dairy among others.

2. The company has more than five thousand employees and the dairy sector has

more than sixteen processing plants. It has also 11 plants and networks of the

distribution centres in the United States.

Strengths
3. There are several operational efficiencies within the company which has
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resulted in a higher volume of sales, a better mix of the products as well as low

transportation cost.

4. There are several consolidated distributions for manufacturing, marketing and

distribution activities for over ten thousand employees.

5. Saputo also has various grocery product sectors which operates over five

Canadian plants and thirty-five distribution networks. They are used in the

delivery of products to the available warehouses and distribution centres.

1. The company is faced with increased level of promotions of products. The

amount of money that is needed to do promotion put the company in a jeopardy

as the cost is added to the production cost.

2. Saputo faces unfavourable relationships with the customers in its existing

block markets that was fuelled by failure of the company to provide them

products that they consider affordable.

3. Saputo dairies faces highly competitive selling prices and high export market

prices. In order to outdo the competitors, the company is sometimes forced to

Weaknesses enter into price competition with other firms.

1. The first opportunity is capital investment which is involved in speciality

growth of cheese products. Increased investments has evidently let to increase in

productivity and more sales.

Opportunities
2. High anticipation of the increased prices and the demands for various dairy
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products. This does not seem to come to an end anytime soon. Each and every

day there is an increase in demand for dairy products.

3. Saputo has an opportunity of setting up production plants in other countries

potential for growth to allow for further expansion. The export market in

countries such as Argentina seems to be on the increase which is a good thing for

the company.

1. Constant price fluctuation in the market, especially in the foreign exchange

rates between the United States and Canada. The exchange rate used for the

Canadian dollar and the United States dollar is never constant, making it difficult

to anticipate the cost and sales.

2. In the United States, many people are quitting milk consumption due to health

reasons and personal issues. There are also numerous people not consuming milk

for the same reasons.

3. The supply of milk is another issue for the company. The supply is not

constant due variation in weather conditions and competition from other

Threats companies. .

Competition

1. Nestle Corporations Limited

2. Unilever Producers

Competitors 3. Danone manufacturers

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References

Akilen, R., Deljoomanesh, N., Hunschede, S., Smith, C. E., Arshad, M. U., Kubant, R., &

Anderson, G. H. (2016). The Effects of Potatoes and Other Carbohydrate Side Dishes

Consumed With Meat on Food Intake, Glycemia and Satiety Response in

Children. Nutrition & Diabetes, Vol. 6, No. 2, Pg. 195.

Chamberland, J., Lessard, M. H., Doyen, A., Labrie, S., & Pouliot, Y. (2017). A Sequencing

Approach Targeting the 16S rRNA Gene Unravels the Biofilm Composition of Spiral-

Wound Membranes Used In The Dairy Industry. Dairy Science & Technology, Vol. 96,

No. 6, Pg. 827-843.

Courtney, R. C., Taylor, S. L., & Baumert, J. L. (2016). Evaluation of Commercial Milk-Specific

Lateral Flow Devices. Journal of Food Protection, Vol. 79, No.10, Pg. 1767-1774.

Maselli, L., & Hekmat, S. (2016). Microbial Vitality of Probiotic Milks Supplemented With

Cereal or Pseudocereal Grain Flours. Journal of Food Research, Vol. 5, No. 2, Pg. 41
SAPUTO SWOT ANALYSIS 14

Task Two: Leadership Evaluation

Seven Habit Profile

The seven habit profile helps in evaluating the effectiveness of people in leadership

positions. These habits based on the principles that bring the maximum long-term beneficial

results possible. The first habit for a successful leader is forward-looking. Managers should look

forward towards achieving extraordinary results by consistently executing their duties and

breaking through barriers. Managers should prioritize most important things first other than

wasting time and energy on least important goals which may not be so much helpful to company.

In a team set up, leaders should consider win-win situation when making decisions. This

motivate the team members resulting improved performance. Managers should demonstrate

problem-solving skills by seeking out new and better alternatives to improve productivity and

handle conflicts. They should also create atmosphere that encourages understanding of team

issues. Furthermore, leaders need to develop goal-oriented mindset in every activity they engage

in, for example contributions, meetings and projects.

Evaluation of Leadership Practices

In order to improve the performance of our company, I. need to invoke leadership

theories in my management role. One of them is the Participative Theory, which suggests ideal

leadership style is the one that takes into account the input of others. Participative leadership is

framework that focuses on equality. In our organization, power and responsibility is shared

among the top managers and other employees. This theory will be helpful in creating an effective

team, the Saputo community, by bringing together all our different and diverse employees.
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Teamwork will be realized by building strong relationships of trust which smashes past cultural

boundaries. Through participative leadership, I will be able to tab specific strengths and

beneficial skills from our employees. This theory advocates democratic participation in all the

activities of the organization. Therefore, no employee will be feeling superior or inferior, or left

out in decision making.

Strengths

Since I was appointed as Saputo Dairy CEO, I have demonstrated various provisions of

participative theory that has enabled me move the company to the greater heights. I consider all

the employees equal and involve them in decision making. I often call for meetings for senior

managers in our head office and representatives from our divisions before making crucial

decisions (Jackson, 2012). Our shareholders are not left out as they are very important to our

company. We normally have annual general meetings for our shareholders to assess the

performance of the year and provide room suggestions that will better the company. This

together with my good negotiation and interpersonal skills has enabled me acquire several dairy

companies. One of our recent acquisition is the Warrnambool Cheese & Butter Factory Co.

Holdings Ltd., which costed $475 million. This company was regarded as Australia's oldest dairy

with 126 years of operation since it was founded. We clinched the deal in 2014 after dramatic

bidding war by our board. Australia is an ideal base as with enable to reach to the Asian markets

such as South Korea and China.

Weaknesses
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Failure to fully implement the provisions of the participative theory has been my major

weakness in the running of the company. Not all employees have been made aware of allegations

that has linked our family to Mafia, an outlawed group operating in Montreal. These allegations

emerged after engaging in business with Rome-based entrepreneur Mariano Turrisi and Vito

Rizzuto who are believed to be the god fathers of the group according to the Italian police. The

decision was arrived by our family members without any consultation with the Saputo board

(Courtney, 2016).

Another weakness that has emerged as result of family decision is the allegation of

involvement of our company in illegal activities in the US division. The U.S. authorities claimed

that my father sold part of his business to New York mobster Joseph Bonanno in 1964. The

Pennsylvania Crime Commission in 1980 established direct link between our company and the

Joseph Bonanno criminal organization (Courtney, 2016). This resulted in the company being

denied milk license in 1980 to market cheese in New York. Furthermore, our decision to cut

production in Canada without wide consultation has costed us a lot of profits. Our customers are

now complaining and are threatening to abolish our products.

Theory-Based Practices

In order to maximize the performance of the company, I will apply participative theory in

my leadership role. Before making any decision, I will take into account the input of our

stakeholders. I will involve the board members, shareholders, customers and the public in

decision making. As a result, we will be able to meet the customer requirements and other needs

in the products being manufactured. Also, I will devote considerable effort and resources to train

employees so they can effectively execute the activities of the company. Training will
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encompass improving the skills and knowledge of team members through mentoring, on-job

training and coaching. I will encourage team-building activities to enhance strong relationships

of trust and tabbing of the employees skills. I will use my huge experience to lead and show

direction to the board and the employees.

Moreover, I will develop clear organizational plan that encourages teamwork. This will

improve the overall competencies and collaborations among our employees leading to enhanced

performance. I will establish ground rules and guidelines that define clear expectations regarding

acceptable behavior by our employees.

SMART Goals

To enhance my skills as an effective leader I will set short-term goals to help motivate

employees and overall performance in the company. One of them is to enhance promotions of

our products to give our company a competitive advantage against other firms. Also, targeting

new markets such as China will increase sales.

Achieving SMART Goals

To achieve the two SMART goals above, I will promote our products in social media,

particular Facebook and Twitter, create TV adverts, radio adverts and road shows across major

markets. To expand to China, the most effective method will be through mergers and

acquisitions.
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References

Courtney, R. C., Taylor, S. L., & Baumert, J. L. (2016). Evaluation of Commercial Milk-Specific

Lateral Flow Devices. Journal of Food Protection, Vol. 79, No.10, Pg. 1767-1774.

Jackson, E. (2012). The Only Thing You Need To Remember About the Seven Habits of Highly

Effective People. New York: Forbes, July 2012.