Murray Goulburn Global Strategy

Introduction

The success of any business in international market is highly dependent on adoption of effective and most appropriate global strategy in terms of its supply chain as well as value chain. The underlying essay is focused on global strategy assessment of Murray Goulburn (MG), which is famous Australian dairy company and is aiming to expand in Philippines. The assessment is carried out through AAA framework of global strategy.

Global Strategy Assessment of Murray Goulburn

MG has investments in multiple countries and based on its global strategy, it has successfully marketed its products in new markets by maintaining reliance on identical and coordinated brand image in different markets (Murray Goulburn, 2019). In Philippines the global value creation strategies of company can be assessed by using AAA framework. This framework has been developed by Ghemawat which offers that global value creation can be fostered through three generic strategies, including; adaptation, arbitrage and aggregation (Ghemawat, 2007). Adaptation is aimed at making changes in few or all components of business models as per diverse needs of different markets and regions (Hotho, Lyles and Easterby‐Smith, 2015). This strategy is not suited for Murray Goulburn, as products of company offer equal value to consumers in all markets and there is no need of adaptation. Additionally, arbitrage strategy offers that company can gain benefit of varying economic or industry conditions in markets and can make decision of locating different parts of supply chain in different regions (Mauri and de Figueiredo, 2012). It is notable that currently, farms and milk processing facilities of MG are in Australian regions and company is distributing finished products to different markets successfully (Murray Goulburn, 2019). Therefore, in Philippines market, Murray can carry on with its existing supply chain.

The last strategy of AAA framework, which is highly suitable to global strategy and supply chain of Murray Goulburn is Aggregation. The company can maintain focus on creation of global as well as regional efficiency through economies of scale as well as economies of scope (Lee and Rho, 2010). The economies of scale is generated by increasing average production scale of company’s products (Srai et al., 2016). Whereas, Murray produces variety of dairy products and increased variety reduces average cost of production. Both of these features allow the company to standardise its value proposition in different markets (Hotho, Lyles and Easterby‐Smith, 2015). Through adaptation strategy, Murray can produce similar products for Philippines market by making reliance on its existing supply chain and production processes. The analysis of supply chain and value chain of Murray highlights that company is grouping its development as well as production processes across different markets and thus through standardisation, it enters and succeed in new markets. Thus, in Philippines market, the same aggregation strategy of globalisation and supply chain management can be applied by Murray Goulburn.  

Conclusion

Murray Goulburn is in best position to make reliance on aggregation strategy of AAA framework to expand its operations in Philippines market. It has been concluded from analysis that need of company’s products is standardised across markets and through economies and scale and economies of scope, success can be generated in new market.

References

Ghemawat, P., 2007. Managing differences: The central challenge of global strategy. Harvard Business Review, 85(3), pp.58-68.

Hotho, J.J., Lyles, M.A. and Easterby‐Smith, M., 2015. The mutual impact of global strategy and organizational learning: current themes and future directions. Global Strategy Journal, 5(2), pp.85-112.

Lee, J.B. and Rho, M.J., 2010. A Multiple Case Study on The Globally Integrated Enterprise. Journal of the Korea Academia-Industrial cooperation Society, 11(11), pp.4296-4309.

Mauri, A.J. and de Figueiredo, J.N., 2012. Strategic patterns of internationalization and performance variability: effects of US-based MNC cross-border dispersion, integration, and outsourcing. Journal of International Management, 18(1), pp.38-51.

Murray Goulburn, 2019. Locations of production. [Online], Available at; http://www.mgc.com.au/our-story/locations/. [Accessed; 01 March, 2019].

Srai, J.S., Kumar, M., Graham, G., Phillips, W., Tooze, J., Ford, S., Beecher, P., Raj, B., Gregory, M., Tiwari, M.K. and Ravi, B., 2016. Distributed manufacturing: scope, challenges and opportunities. International Journal of Production Research, 54(23), pp.6917-6935.