The report was prepared by focusing on the market expansion of Dewlay Cheese. As Dewlay Cheese was founded in 1957 and has already a good grip on the market, therefore the report included an in-depth analysis of the potential key opportunities of the market. Further, the report also makes an analysis of the current competitors of Dewlay Cheese in the market. Apart from that as it is planning for its expansion in the UK as well as in Spain. Therefore the report majorly focuses on the key opportunities required along with the strategy to make the entry of its cheese in foreign markets.
It is well known that Dewlay Cheese are having a reputation for a long back and was founded by George Kenyon with the production of Lancashire Cheese. The Lancashire Cheese is the best-known. It is because Dewlay is getting a huge amount of dedicated milk supply which is mixed with a good unique starter culture that provides taste to Lancashire Cheese (Dewlay. 2017). Further, these Lancashire are divided into a variety of tastes depending upon the demand of the customers (Bargiela-Chiappini & Nickerson, 2014). To make the expansion of Dewlay Cheese in the UK market as well as in the market of Spain it is necessary to have an analysis of the key opportunities for Dewlay Cheese that can further resonate with both trade customers and consumers alike for the best demand for cheese. The key opportunities involve the SWOT analysis, Pestle analysis, and the determination of Porter’s Five Forces (Dewlay. 2017).
With the regular development and growth of Dewley Cheesemakers, it is trying to gain a firm position in the international market. However, due to the presence of other companies, it is facing a tough challenge on an international level.
Northumberland Cheese Company
The company is named among one of the top cheesemakers in Britain. The company mainly uses local milk to produce artisan cheese which is prepared traditionally. It is in Northumberland, hence the name.
ETS. Freddy Baines NV Flanders Milk
This is another well-known name among dairy manufacturers. The company has a high amount of supply in India, Argentina, and New Zealand. Headquartered in Spain, the company is a quality manufacturer of cheese along with other dairy products (Buckley, 2016).
Fine Cheese Company
They are a well-known cheesemaker in the UK market and have an excellence in making hand-made cheese. The company has its distributors and retailers which makes them an exception. The company believes in unpasteurized cheese and has many different types of cheese which are made under its name.
Lactalis Group
Lactalis Group is a family dairy group that has its headquarters in France. It is a well-known cheesemaker throughout the world (Dellinger, et. al., 2013). The company has established itself in a total of 43 nations and has more than 230 factories worldwide where more than 75,000 workers are employed. The company not only sells cheese but they also produce other dairy products like cream etc.
Dewlay is planning an entry into the new market of Spain. The reason the company chose this country is because recently, the country has seen a high demand for cheese. Almost all households are including cheese in their food. Spain is considered among the topmost countries when it comes to the consumption of cheese. Moreover, when it comes to location, geographically, Spain is closer to the UK, thus, while exporting, the company will be able to provide high-quality fresh cheese to the consumers. Research has shown that the consumers of Spain like having new varieties of cheese (Hutzschenreuter and Horstkotte, 2013). This is mainly due to the promotional offers that are offered by the companies while promoting their new products. Hence, with Dewlay Cheesemakers coming into the market, the customers will have a new taste and new offers, which will make them buy the product. Hence, it is a good option for Dewlay when it comes to expanding globally.
For any company to enter a new market, it is essential to gain as much information as possible, about the target market. In this case, as Spain is a new market for Dewlay, it has little information about the competition. Hence, the company needs to make some competitive strategies to understand the market and sustain it (Naldi, Achtenhagen, and Davidsson, 2015). For this purpose, Porter’s Five Forces model is used which will help the company understand the important areas of the Spain cheese market. The company will also have an option of joining hands with other local companies which will help the company get into the market very easily.
Dewlay is a company that deals in household products but is a well-known company in its home market. However, in this new market, it has no experience and no fame either. Thus, the company can also get a new name which will be welcomed by the local customers (Teece, 2014). As the local companies have a better understanding of the trends in the customers buying behavior, thus Dewlay can join hands with any local company and try to penetrate the market. This will not only give the company a wide range of options and understanding of the business in this new market but will also help them reduce the cost and avoid risk.
Dewlay can also distribute its products to famous retailers in Spain who will be able to sell the product to different areas of the country (Weber, Festing, and Dowling, 2013). Moreover, the company can also offer promotional rates and discounts to the customers.
Dewlay produces cheese in a special way, which differentiates it from the other cheesemakers. Also, the distance of Spain from the UK is comparatively less. Thus, the company can use a cost-leadership strategy for selling the product under a new name (Warner, 2014). The company can also use local retailers to sell its products at a much-discounted price with different offers. These strategies will help the company penetrate the market very easily and effectively.
As discussed in the earlier section regarding the various key opportunities for Dewlay Cheese. In that case, there is an explanation of the whole market analysis of Dewlay Cheese as per the market of the UK as well as the emerging market of Spain. That is the reason it can be stated that it is quite important to know that Dewlay making the exploitation of core competencies. With this, Dewlay is trying in itself to cope with the intensity of rivalry existing in the market of UK.
Due to the identification of the resultants, the report, therefore, included a detailed description of the SWOT analysis, Pestle analysis, and Porter’s five Forces (Knežević & Wach, 2014). These three are some of the vital opportunities that can help in concluding the effective differentiation strategy which can make Dewlay in becoming a standalone brand concept in the market. As Dewlay is already existing a huge brand in the UK market, therefore, it can take care of the opportunities prevailing in the market.
Most importantly for the expansion of its branch in the UK market, Dewlay has to make consistency can develop dedicated supply chains which can further make strong provenance of opportunities (Kolk, 2016). This can be done by adopting effective strategies (as identified in Porter’s Five Forces cited by Kolk). Similarly to make the expansion in the overseas market like Spain, Dewlay has to be truthful in terms of the secret ingredients that it adds in manufacturing cheese (Zander, McDougall-Covin, and Rose, 2015). Also concerning the rivalry present in Spain, it has made its effort in marketing and quality so that Dewlay can establish a brand name in the market of Spain which will also, in the future, help in the global growth of Dewlay. With the increase in the supply chain relationship, it can enhance the performance of its business.
Apart from that the strategy that Dewlay needs to take care of is through seeing the prospect and profitability. It involves the management of efficiency in the supply chain of cheese. Along with that, there will have the maintenance of the relationships in the supply chain. Also, Dewlay must take care of innovations for its market development. (Punnett, 2014) These three strategic activities are the most to be followed by Dewlay to make its expansion in the overseas market and local markets (Ruigrok and Van Tulder, 2013).
The supply chain relationships that Dewlay must take care of are the existence of the relationships between the commercial parties by understanding the necessary issues of the marketplace. It can further provide to lay out the formulation of policies for successful business relationships. Similarly, the efficiency in this relationship is determined by addressing the issues raised in the UK which can improvise the business performance of Dewlay. The last strategic activity to be considered as described above is bringing innovations for the development of the market (Penrose, 2013).
It can be done when Dewlay will make the product innovation and other innovations in launching the cheese. Dewlay has to make huge investments like about £240 million in commercial funding to have the advertisement which must keep on increasing in due course of time and along with that it will put up steps to make the growth in the commercial activity of Dewlay.
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As per the case study undertaken about the cheese company, Dewlay Cheesemakers based in the UK, the following analysis can be done as per its strengths, weakness, opportunities, and threats (SWOT analysis):
Strengths: As per the elaborate research conducted on this particular cheesemaker, Dewlay the most striking feature of the establishment is that it is driven by value and a cultural alignment of its organizational goals. The organization founded by George Kenyon, still applies the traditional methods devised by its founder for the production of cheese. The values and the cultural backdrop that have been ensured by the founder have been carried forward to the third generation of cheese manufacturers at this organization (Myers, 2013). It takes pride in delivering quality and its commitment and devotion to the stakeholders of the company. The company also generously involves itself in the plethora of activities targeting the social framework it operates from, in general. This is done by a slew of corporate social responsibility programs by the manufacturer. It ensures that it makes its presence felt among the masses for its core products i.e. dairy and cheese.
Weaknesses: the most glaring weakness faced by the company is the rise and popularity of international brands dealing with the same line of products as itself. This clubbed with, a rather inadequate PR management approach could spell trouble if it tries entering newer and more lucrative markets. To capitalize on any opportunity, an organization like delay cheesemakers, a formidable amount of attention needs to be bestowed on the PR and marketing front of the business.
Opportunities: In the case of Dewlay Cheesemakers, the opportunities for newer business prospects seem to be immense, since they haven’t yet explored the overseas markets to their fullest potential. Emerging economies like Spain and other vicinity regions are some of the playing fields for cheese manufacturers (Ferreira, et. al., 2014). This can be complemented and enhanced by using a better model for all distribution channels the company has been using since its inception. A good amount of research and improvement of strategies being used by the rival manufacturers can make Dewlay Cheesemakers a force to reckon with.
Threats: The various threats to the growth and sustenance of Dewlay Cheesemakers are almost the same as the threats perceived by other players in dairy manufacturing. Being a manufacturer of fast-moving perishable goods, the distribution channels need to be of top quality and efficiency. These factors are rather difficult to streamline at first when moving and exploring new markets. Competition from rivals dealing with dairy products on a multinational basis is always a threat. And so is the demographical and technological challenges that are put forward in the form of Dewlay by expansion to newer and prospective markets.
Political:
The examination shows that the political figures in the large-scale environment of the Irish dairy market are portrayed by components, for example, WTO intercession, CAP wellbeing check, and update of the preparing structure. The abolishment of EU drain portions in 2015 and the WTO arrangements of Spain referred to the prohibition of fare discounts by 2013. Thusly these components could potentially affect the costs of the drain in Spain and other European industrial facilities which can be used by Dewlay Cheesemakers further bolstering its good fortune as a bottomless and negligibly valued drain (Cantwell, 2014). The mastery of drain handling organizations in Spain could make potential difficulties for Dewlay Cheesemakers in Spain’s market surroundings.
Economic:
The economic scene of Spain in the case of Dewlay Cheesemakers would be hugely dictated by the recent BREXIT. The various regulations that were put in place by the EU before BREXIT, will eventually have to give way to newer regulations related to food markets. Since the factors of supply in irsh diary market would be less volatile and exposed to the international markets, low-cost players in this sector might see a boom in the demand for their goods.
Social:
The case study of the Dewlay Cheesemakers done in this regard shows that social factors like the demography of the market, etc. will play in factor making a positive social change. For instance, a large chunk of the Irish population is involved with the agriculture, dairy, and allied sectors, hence cheap workforce and other factors of production can be easily made available for pushing production further.
Technological:
The Digital platform that has recently found a niche in the promotion of various goods and services in several sectors, could be one determining factor of the profit margin made by the manufacturer. The various technological advancements in dairy and cheese making available in the Irish market could be used to push production toward a more efficient and cost-effective direction.
Environmental:
As the study suggests, an environmental concern when it comes to FMCG products is a huge determinant of the quality of business. In this regard, Dewlap Cheesemakers can have certain legal facets to take care of before entering the market. The Water Framework Directive (WFD) which targets the safekeeping of groundwater is one such factor that contributes to the environmental concern, as well as the prospect of Dewlay Cheesemakers, beginning operation in Spain.
Porter’s five force model has always been an instrumental business tool to determine the quality of competition being faced by a certain business. It also analyses the attractiveness of a certain business sector based on various parameters it takes into account. In the case of Dewlay Cheesemakers which has started a new operation in Ireland, the following observation about the five forces can be made:
The threat of new entry:
In this case, Dewlay Cheesemakers is a new market entrant itself. Since the diary market in Spain has not seen a saturation state, the chances of Dewlay taking a good market share in complement with some competitors in Spain like Kerrygold, etc. is moderate.
The threat of substitutes:
This particular aspect will depend on the product line that is launched for a particular market. In general terms, the threat of substitutes in the Irish market is minimal. Since dairy products as such have a better market penetration as compared to their non-diary substitutes like tofu etc., Dewlay has a good chance of making good business.
Bargaining power of customers:
In dairy products, the bargaining power of customers is very low due to the nature of the product. Since product differentiation is low in this sector, hence there is a fair chance that this factor will turn out to be a positive parameter for delay cheesemakers.
Bargaining power of suppliers:
Since the diary industry in Spain is not dependent on a small number of suppliers for the sectors, the chances of having suppliers’ autonomy or influence over the price factor are quite low. Hence a diverse distribution channel for the various manufacturers has ensured that the bargaining power of suppliers lies towards the lower end of the spectrum.
Competitive entry:
FMCG sectors like dairy and cheese products have always faced this factor. In the case of Dewlay Cheesemakers, the competitive rivalry by the producers of similar products who were previously present in the market makes it a little difficult for Dewlay Cheesemakers to gain a formidable market position.
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