This case “High noon at Alpha Mills” talks about an oil plantation which name is Alpha Plantation Sdn. Bhd. This plantation consists of an oil palm estate and one palm oil mill. Mr. Ang started to work at here when he was 15, then he acts as gatekeeper, anyone who wants to see mill manager should meet Mr. Ang first. The oil palm faced many challenges in 1999. World oil price were diminishing in an amazing speed, and palm oil hit a 15-year low. Captain Chubb, the mill manager said “We are doing nothing wrong, and have met all our efficiency targets.
It’s the market that is killing us! ” Of course after this, he was given his marching order. Instead of him, a new mill manager, Mr. Ian Davison, came this mill in early 2000. He was not a career plantation engineer and had never managed an agricultural product-processing mill befor. He came with some new idea, and Mr. Ang expressed his full support for his plan. This plan were not going so well, Mr. Davison think Mr. Ang effect his plan, but after Mr. Ang leave Alpha Mill, team performance began to deteriorate and no amount of pep talks could improve it.
In this case, we can find some management problem in Alpha mill. First is a different skill requirement within different management context. In this case, Mr. Ian Davison had never been a plantation manager. In china, we have slang: “Difference in profession makes one feel worlds apart. ” This one is a good example; he is not a plantation manager before this, even he graduated from Ivy-League MBA, and come with some good idea, he cannot fix up the mills’ problem, maybe he can be a good electronics engineer.
He wanted to use his experience on this company, his plan like improve technology, adopt more stringent performance measure. This maybe not good for Alpha mill now, because their faces huge deficit now, install new technology and automation means huge funds. Reason two is leadership, the appointment of new leadership failed to address key issues prior to implementing multi-dimensional change in the structure of company, he likes an autocratic leaders, he prefer to make decisions and solve problems on his own with ittle input from subordinates (Althouse, 2008).
He did not well with Mr. Ang who has real power in this mill. On another hand, Mr. Ang had some problem else, he always say this is just a simple question, no need to waste time over it, he did most thing by himself, don’t let those team solve problem by themselves. So, Mr. Davison didn’t like him, finally Mr. Ang leave this company, but Mr. Davison didn’t have good result as he think. Third reason I think is stress management, time management and goal setting,
Brazil’s Beer Market Analysis
The Beer Market in Brazil
Brazil is the 5th largest country in the world with a total population of 194 million. Total beer consumption in Brazil in the year 2012 is estimated to be 11,563. 9 million liters. Which means each person in Brazil is going to consume an average of 60 liters per year. The Brazilian beer market generated total revenue of $24. 55 billion in the year 2011. As stated by DataMonitor (2011), the market share for a standard lager in Brazil is 86. 3% and premium lager are 7. 0%. Which means premium lager generated $3. billion from the total revenue. The performance of the market is expected to be accelerated, with an anticipated CAGR of 6. 5% for the next five year period 2012-2017, which will drive the market to a value of $35. 8 billion by the end of the year 2017. The Market According to Euromonitor International (Jan 2012), the Brazil beer market saw total volume growth of 4% in 2011, which was lower than the expected CAGR of 6. 5% registered over the review period. However, the beer market in Brazil is considered to keep growing and improving.
As reported by the Portuguese American Journal (30th July 2011), Pope Benedict XVI will visit the country at the occasion of the World Youth Day event in 2013 and the soccer Confederations Cup will be held on the same year. In 2014, twelve Brazilian cities will host the soccer World Cup. Therefore, the performance of the Brazil beer market is forecast to improve, with an anticipated CAGR of 6. 5% As stated by DataMonitor (2011), Anheuser-Busch InBev (AB InBev) is the leading player of the Brazil beer market, roughly holding 66. 7% of market volume.
Ambev is one of the subsidiaries of AB InBev, has had an incredibly successful time in the post-global crisis Brazil. Ambev radically controls about 66. 7% of the market and has solid relations with most bars and retailers and it has served as a powerful deterrent to foreign competitors. Standard lager is the largest segment of the Brazil beer market as shown by DataMonitor(2011). The most popular beers in Brazil are Skol and Brahma. They also have Heineken in Brazil, but it is imported and expensive and also thought of as more “high class” among normal people.
It isn’t found as often as the other Brazilian beers, Brahma and Skol being ubiquitous in Brazil. In the Brazil beer market, producers able to differentiate their beers not only by overall segments (lager or bitter) but also by their brands, ingredients, and packaging style. Therefore, consumers have too many choices and the switching cost of the buyer is not particularly high. Moreover, the beer market in Brazil consists of few substitutes such as wine, whiskey, functional drinks, and champagnes. Opportunities Beer “must be sold’ at Brazil World Cup
BBC (19th Jan 2012) reported that beer must be sold at all venues hosting matches in the 2014 World Cup in Brazil, football’s world governing body, Fifa, has insisted. Under pressure from FIFA, the Senate of Brazil has approved legislation that allows beer sales in a football stadium during the 2014 World Cup. This is one of the biggest events that will increase the revenue of the year. This is an opportunity for Grolsch to generate a huge margin here. Brazil’s beer technology Brazil has a very advanced beer technology as it has various types of beer in Brazil’s market.
Brazil Brau ( the only meeting of the professional brewing industry in Brazil), it is the only exclusive event of the brewing industry in Brazil, it brings together companies and internationally renowned institutions to provide the latest beer technology. The next exhibition, which will take place from 25 to 27 June 2013. Infrastructure in Brazil Information from DHL’s website (Logistics in Brazil) stated that Brazil’s transport system is heavily dependent on the highway network. There are 60% of the total transport volume is handled by it. The quality of rail transport in Brazil is poorly developed and parts of it are in bad condition.
It is primarily based in the states of Sao Paulo, Minas Gerais, Rio de Janeiro, and the Rio Grande do Sul. However, there are few providers of logistics service in Brazil which are DHL, TNT, America Latina Logistica, Companhia Vale do Rio Doce, Expresso Mercurio, Penske, and Ryder. As the Grolsch will be exported to Brazil, the logistics service companies are the main suppliers which will provide transportation service all around Brazil. Location Due to the poor infrastructure and targeted market of Grolsch, the location will be one of the cities of Brazil which is Rio de Janeiro and Sao Paulo.
The strike happened in Brazil frequently due to police and soldier is trying to demand higher wages and better working conditions, according to Business Monitor International (2012).
Corruption in Brazil is relatively higher compare to other countries but President Dilma Rousseff’s tried to crackdown the corruption since she became the president.
The health problems of the president might cause the market to collapse due to uncertainty over the economic policy under Vice President Michel Temer.
The economics of Brazil is growing stably with expected GDP growth of 3. % for 2013. The average inflation of Brazil is very high at an average of 5% and it diluted the real purchasing power of consumers. Currently, the exchange rate of Brazil’s currency is fading against the euro. This means Grolsch is able to invest less amount money in order to get into the market compare to last year.
The market leader of the beer industry, Ambev is trying to expand its market volume by having strong relations with the distribution channel. Since corruption is practiced in Brazil, Ambev might use his power or influence to prevent foreign companies to enter the market.
The infrastructure in Brazil currently is not well developed. But, the government is under the progress to improve the infrastructure in order to be competent enough to host the FIFA 2014. According to BusinessWeek (1st June 2012), the government raised the tax rate by 26% for the beer industry which directly affects the beer industry in terms of profitability and sales volume. According to the World Bank and IFC’s report (2012), Brazil currently ranked 126th in the ease of doing business index.
Grolsch needs to go through a lot of procedures before commencing their business over there. Based on Porter’s Diamond framework, we strongly agreed that the company should enter the Brazilian market. The demand condition is perfectly good, related and supporting industries is available over there, factor condition is moderately good and improving, and lastly, the firm strategy and structure is suitable to enter the market. Recommendation We all always heard about the old adage ‘think global, act local’ when entering into the international market; but does the same story if linked to Grolsch?
Our team strongly believes that Grolsch should adapt globalization strategies, which are typically highly centralized and require Grolsch to tightly coordinate their beers and pricing strategies across Brazil’s market and locations. Some argue that if Grolsch intent on entering the Brazil market, they might face some obstacles such as language and culture differences, deliberate differences in tone of voice, customer taste and perceptions, and other local social issues. However, there’s not a compelling reason to justify whether localized presence is the most appropriate solution than a globalized presence.
And we should regardless of whether or not Grolsch should run localized or globalized strategies. It’s a good idea to take ownership of a local company, and use the company to globalize the market. One of the best ways for Grolsch to enter the Brazilian market is by participating in local trade through acquisition. We all know that the Brazil market almost controlled by the key player AmBev, Grolsch actually can adapt global strategies by acquiring Primo Schincariol Industria de Cervejas e Refrigerants, Brazil’s second-largest brewer, or Cervejaria Petropolis SA (3rd-largest brewer in Brazil) to compete with AmBev.
The economist states that it is difficult for a foreign company to grow in a market dominated by AmBev. Therefore the first step that Grolsch should do is joint-venture, partnership, merger, or acquisition with a local company. Secondly, in order to maintain the premium taste of Grolsch, globalization strategies make sure the quality of the products served is the same for each market all over the world. Thus Grolsch can buy its raw materials in bulk in order to brew the beer at once. It potentially saves the company hundreds of thousands of dollars per year.
If Grolsch is going to take local strategies, they need to have varieties of the flavor of beer products in different countries to suit the local tastes. This might involve different ingredients and resources needed to purchase or set up a beer brewer and it is directly increasing the cost. Eventually, the Brazilian couldn’t taste the premium taste of Grolsch which is brewed in the Netherland in Brazil. Based on reliable research, Brazilian have a good impression over Dutch beer in Netherland, therefore it is preferable for Grolsch to maintain its own product’s characteristics and features rather than go into localizing strategies.
PEST Analysis Politic
Corruption in Brazil is relatively higher compare to other countries. Although the corruption scandal continues to happen in Brazil, President Dilma Rousseff’s effort to crackdown the corruption in recent years has boosted the confidence of people towards her commitment. Since Dilma Rousseff became the president, corruption activity has been reduced. Strike by police and soldier force always occurred in Brazil as the officers tried to demand higher wages and better working conditions. Other than that, frequent riots in Brazilian prisons due to overcrowded inside the prison. President Dilma Rousseff aimed to reduce the poverty, increase access to education, enhance the medical care facility, and sanitation service to those in need by 2014. A second initiative focuses on business growth and innovation, including protectionist tariffs on imports, subsidies for exports, and incentivizing micro and small businesses. If the health problems of President Dilma Rousseff become worse, it might cause the market to collapse due to uncertainty over the economic policy under Vice President Michel Temer.
The GDP growth of the nation for 2011 is 2. % and is expected to expand by 1. 7% this year and 3. 7% for 2013. The growth is expected to be higher next year due to the coming event, FIFA World Cup 2014. The average inflation rate of Brazil for 2011 is 6. 63% and is expected to be 5. 34% this year and 5. 5% for next year, 2013. The high inflation in the nation diluted the real purchasing power of the people. The government should try to regulate the problem. The interest rate for 2011 has been reduced from 12% to 11%. Today, the interest rate has been further reduced until it reaches the lowest rate of record, 7. % and it is expected to be further decreasing since the government encourages the public to borrow money. The current unemployment rate in the country is recorded at 5. 3%. Which is considered to be healthy from an economic point of view. The current minimum wages for Brazil is R$ 4. 78 reais per hour which are approximately € 1. 8. Inequality income distribution in the nation caused society problem happened all around the country. The tax system in Brazil is very complicated and relatively higher compare to other countries. High tax in Brazil will reduce the profit or earning of investors.
The population of Brazil is 193,946,886 (1st July 2012) and it is the world’s 5th largest world both by population and land. For the statistic we found in the market, the beer consumption for 2012 is estimated to be 11,563. 9 million liters, which means each person in Brazil is going to consume an average of 59. 6 liters beer per year. The education level of Brazilian is lower compare to other developed countries. Despite the “Every Child Learning” project being launched in 2003, the IBGE says 500,000 children between seven and fourteen are still not receiving any education. 7 million of fifteen-to-seventeen-year-olds are out of school and the figure might likely be higher in reality due to difficulties to carry out surveys in Brazil. The society in Brazil generally is a low level of tolerance for uncertainty. This means the society does not prefer changes and very risk-averse or risk avoidance. They prefer regulated rules, laws, and policies. The people of Brazil mostly follow a “particularist” culture in which they are very obligate or responsible for their ingroup (family, extended family, friends of the family, and honorary “family”).
Therefore, they only feel owe the time to the limited circles of people belonging to their ingroup, they divide their time among the subset of people making them feel like they have plenty of time. The people outside their circles, outgroup, of cause, they don’t have any responsibility or obligation towards the outgroup.
Brazil’s basic infrastructure is currently undergoing wide-ranging expansion through the Program for Accelerated Growth (PAC), launched in 2007 by the federal government.
Within the scope of this program, the public and private sectors intend to invest around US$ 273 billion in energy, logistics, social, and urban infrastructure. Brazil has a very advanced beer technology as it has various types of beer in Brazil’s market. Brasil Brau has organized an exclusive event of the brewing industry in Brazil, it brings together companies and internationally renowned institutions to provide the latest beer technology. Porter five forces
Competitive Rivalry Is HIGH!
Anheuser-Busch InBev (AB InBev) is the leading player of the Brazil beer market, roughly holding 70% of market volume.
American Beverage ( Ambev ), one of the subsidiaries of AB InBev, has had an incredibly successful time in the post-global crisis Brazil. Ambev radically controls about 70% of the market and has solid relations with most bars and retailers and it has served as a powerful deterrent to foreign competitors. However, as a leader of this market, Ambev also afraid cannot continue growing its margins at this current pace, the low switching cost and different choices directly stimulate then the intensity of rivalry.
Furthermore, FIFA 2014 is going to held in Brazil and the economist strongly believes that more international brewers will enter into this high potential market. Dutch giant Heineken is one of the companies that could potentially do a lot more in Brazil, with Mexican beer maker Femsa now on board. If Grolsch decided to enter into Brazil beer market, it involves a high fixed costs to operate large breweries and increase the exit barriers. Brazilians that have a wide range of beers to choose might lead the price war occurs and Grolsch might need to reduce their standard retail price in order to survive in this red ocean. HIGH Barrier to entry! One of the most critical barriers to enter into the Brazil market is the investor will have to show proof of investment equaling at least USD 50,000 (EUR 34,171) in order to obtain a visa and work permit for Brazil. According to the World Bank Doing Business 2011 report, it takes significantly more time to set up a business in Brazil than in other Latin American or BRIC countries. Base on research, it takes 120 days to set up a limited liability company in Brazil and there are plenty of procedures and requirements.
Moreover, there are 12 Brazilian cities is set to host the 2014 FIFA World Cup, but there’s one big problem: Alcoholic drinks are banned in the country’s sports stadiums. Alcohol was banned at Brazilian football matches in 2003 as part of attempts to tackle violence between rival football fans and this is going to happen again in 2014 FIFA to limit violence between fans. This policy will indirectly cause some effects on the beer market in Brazil because some economists believe Brazil’s government will continue to impose different policies to limit beer consumption in order to control violence and turbulence.
Brazil’s government raised taxes on beer by 26 percent in 2012, and the beer’s price also automatically increase in order to offset the measure. Tax increases in large markets depressed beer sales in many parts of the world, for example, Carlsberg A/S reported a decline in profit last year after the Russian beer market contracted about 3 percent due to tax increases. Therefore, the tax increases indirectly form a barrier to enter into the beer market in Brazil.
High Bargaining Power of Buyers
The major market buyer in Brazil is specialist retailers such as supermarkets, beer stores, convenient and corner stores.
Most retailers are able to negotiate on the beer price with producers. Producers can differentiate their beers not only by overall segments (lager or bitter) but also by their brands, ingredients, and packaging style. Therefore, consumers have too many choices and the switching cost of the buyer is not particularly high, which increases the bargaining power of the buyer. Moreover, Brazil will host a papal visit and the World Youth Day event as well as the soccer Confederations Cup in 2013. In 2014, Brazil will host the soccer World Cup.
Therefore, the economist believes that there will be more brewers to enter the market and provide more choices to consumers and increase the power of the buyer.
Low Bargaining Power of Supplier
If Grolsch is using globalization strategies and exports their beer products into Brazil, then they can straightly skip the process of buying malted grain, hops, and bottles in Brazil. The quality of raw materials is a crucial part of this business, the end product is strongly influenced by the nature of the ingredients used.
Therefore, there is better for Grolsch to use their own resources to produce their beers and this will directly reduce the reliance on the supplier in Brazil. Overall, the bargaining power of suppliers is low.
Moderate Threat of Substitutes
The main substitutes for alcoholic beverages in the Brazil market are wine, whiskey, functional drinks, champagnes, and other low alcohol spirits. Although there are plenty of substitutes, the switching cost is not particularly high, so the threat arises from here will be moderate also.
Moreover, someplace like restaurants, bars and pubs found that it is difficult to operate without beer. The beer market is still very strong, the specialist retailers in Brazil still have a high demand for alcohol drinks and beers. However, from the point of view of the customer, plenty of substitutes made them have different choices base on their different tastes, this make beer vulnerable to the threat of other alcoholic beverages. Overall, there is a moderate threat of substitutes.
- “Beer ‘must be sold’ at Brazil World Cup, says Fifa”, BCC News, 19th Jan 2012. Available from http://www.bbc.co.uk/news/world-latin-america-16624823
- “Beer in Brazil”, Data Monitor, November 2011. Available from www.datamonitor.com
- “2013:Pope Benedict XVI to visit Rio de Janeiro – Brazil”, Portuguese American Journal, 30th July 2011. Available from http://portuguese-american-journal.com/2013-pope-benedict-xvi-to-visit-rio-de-janeiro–brazil/
- Brasil Brau 2013, XII International Exhibition of Beer Technology, access at 12th of October 2012. Available from http://www. brasilbrau.com.br/en/
- “Logistics in Brazil”, DHL, access at 13th of October 2012. Available from http://www.dhl-discoverlogistics. com/cms/en/course/trends/america/brazil.jsp
- “Doing Business. Economy Profile: Brazil”, The World Bank, IFC, 2012. Available from http://www.doingbusiness.org/
- Latin American Monitor: Brazil”, Business Monitor international, Vol29 Issue 10 October 2012. Available from www. latinamericamonitor.com
- “AB InBev Slides as Brazil Increases Beer Taxes: Brussels Mover”, Business Week, 1st June 2012. Available from http://www. businessweek.com/news/2012-06-01/ab-inbev-slides-as-brazil-increases-beer-taxes-brussels-mover
- “Beer in Brazil”, Euromonitor International, Jan 2012. Available from http://www.euromonitor.com/beer-in-brazil/report
Tomorrow When The War Began By John Marsden, Personal Response Analysis
Tomorrow When The War Began by John Marsden. Tomorrow when the war began by John Marsden is an exceptional novel filled with action, suspense and tension. The author tells the story of seven stereotypical examples of teenagers heading up into the hills to camp for a while when they suddenly find themselves drawn into the extreme stress of a war as they are left to fend for themselves. It is an inspiring tale of how they all responded to the war in different ways, took risks and grew from ordinary teenagers.
All seven teenagers transform from normal youths to brave, courageous and strong young adults as they deal with the loss of loved ones and extreme fear. But out of all seven I found Homer’s character developed the most. Before the war he started off as a typical teenage boy. He loved to play pranks and stir up trouble on other students at school. He didn’t care about his grades or anybody’s feelings. It seemed he didn’t have a care in the world. I think he took his life for granted as he had lots of family and friends all running after him and I think he didn’t realise how fortunate he was.
I also think that part of this was not his fault. I think he knew no different and didn’t know what it was like to have no family or friends. As Homer and his friends get back from their camp and realise all their family have been taken and they all have to deal with the stress, I thought Homer’s character developed the most. He kept his head up and became a serious leader of the group. I think Homer was just as stressed as everyone else, but I think he decided if they were going to survive, they had to stick together and so he began to value what he was left with in his life.
He was the one who remained strong and tried to comfort others. He came up with plans to gather food and keep everyone safe. He risked his own life by sneaking around the camp which the town was kept captive in so he could get word that everyone’s family was okay. I found this amazing, his actions really proved that he valued his new life. “We’ve got to stick together, that’s all I know. We will drive each other crazy but I don’t want to end up here alone. ” Homer says this to the rest of the group to keep them together and to motivate them to keep going.
I think Homer knew he had taken his previous life for granted and realised the importance of valuing his new life. I believe Homer’s character changed the most. I think he was like a completely new person with so many values. Homer’s character reminded me with connections to my own life, like the Christchurch earthquakes. The disaster bought out the best in so many people as they all helped each other even when they were all under stress. That’s what I think happened to Homer, the disaster in the novel really bought out the best in him.
Another interesting character in the novel was the main character Ellie. I found her interesting as she developed close relationships with people she never thought she would. Early on in the book when the group of friends find out their families have been captivated Ellie is one of the people who breaks down the most. She really struggles with the news and often feels scared and uncertain of her actions. She tries to hide these actions, of what she thinks is, moments of weaknesses from her friends.
As the book continues Ellie suddenly feels herself drawn towards Homer. This seems ironic as previously Ellie had felt she would never like him that much as he seemed so insensitive and careless and far from boyfriends material. “If anyone had said to me then that I’d end up liking him, well, I’d have paid their taxi fare to the psychiatrist. He was so immature”. But I think Ellie fell for Homer because during the crisis he was so strong and Ellie clung to him as a way of getting through the disaster.
I also think she felt safe and secure with him and like nothing could harm her. I can understand why Ellie felt this way about Homer as the stronger, mature and more confident people are always more attractive than the immature and weak people. You always feel secure and trusting of the strong ones. After reading this novel, it made me think about how important our family and friends are, especially when going through a disaster. I think the novel reflected the importance of valuing our lives and really being there for our loved ones.