Joaquin Miguel Madamba

2015-89536
BA 194 – International Business
Prof. Lizares
Final Paper

As per the company’s Annual Report for 2015, management’s 2020 vision puts URC on

the course of becoming:

...a leading, respected, and recognized corporate brand spanning the PAN-ASEAN-

TASMAN region with leading consumer and household brands in snack foods and

beverages across the mainstream and premium segments. It aspires to be a significant

multinational business focusing on its five strong consumer brands -- Jack ‘n Jill, C2,

Great Taste, Griffin’s and Nice & Natural. This vision in anchored onto the company’s

orientation towards product innovation and scale in the markets they serve,” (URC

Annual Report 2015, p 51).

Considering the company’s growth trajectory given its long history of expansion, it’s not

difficult to see how this vision may be well within reach. This growth, however, wasn’t just a

result of the scale to which the company has been able to grow its operations, but how well URC

has been able to capitalize on opportunities in the various markets it has entered over the years.

That said, the success of URC’s current strategy, one that can be surmised as a stability strategy

given its intention to maintain market leadership, will largely depend on two aforementioned

factors – 1) the scale and quality of the company’s entire value chain, from production to

distribution and 2) how well the company can capitalize on current trends in the market and

respond to the dynamic competitive landscape.

 Forming the backbone of the company’s competitive advantage is the scale at which

URC can produce its products and distribute them. From its numerous acquisitions of companies

like NZ Snack Food Holdings and Snackbrands Australia, to its joint ventures with companies

like Calbee and Danone, URC’s various modes of entry over the years have not only given the

company exposure to international markets, but have allowed them to access a wider range of

product offerings which, due to their organizational structure as discussed later on, allows them

to offer them to other markets with demand for these same products e.g. Vitasoy and B’lue

flavored water.

More important however, is company’s convoluted organizational structure which is

essential to its ability to capitalize on said trends. Operating on somewhat of an international

division structure, this allows country managers to employ a more decentralized decision-making

process and therefore an adaptive, international approach to managing product portfolios that suit

the tastes of markets under their purview. This type of structure was useful in situations like the

company’s introduction of C2 to the Vietnamese market and will thus be integral to capitalizing

on unique consumer profiles in various markets. This is significant attribute is in line with the

company’s aim to create a “more responsive supply chain to better serve customers.”

With that in mind, it is worth considering how the company ought to employ strategies

across markets where they might find their market leadership threatened by other competitors.

Such is the case in the ever-present challenge it faces against competitor Oishi in the salty snacks

space in the Indonesian market. At a glance at the figures outlined in Exhibit 4, one can see that

Oishi’s cost advantage on a per gram basis range in upwards of ~20%, thus making them more

appealing in a market where competitive pricing is key given the average consumers spending

capacity and the high costs of maintaining shelf space, particularly for larger retailers.
 If URC’s Jack and Jill is to encroach on Oishi’s market share in this space, the company

will have to find means in employing a low-cost leadership strategy possibly by evaluating areas

in their value chain where they may lower costs such as alternative means of procuring raw

materials or less costly means distributing their product.

An equally viable business-level route that the company might be able to take would be

in product differentiation. If URC cannot compete with Oishi in terms of pricing, they might be

able to capitalize on the consumers’ openness to trying new products (p 343) by constant

innovation in their creation of unique product offerings.

Last but not the least, URC is faced with the challenge of capitalizing on emerging trends

in the current competitive landscape. Going back to the 2020 vision of the company, achieving

this vision goes beyond just product innovation, but involves improving the overall supply chain

and “more intensive brand-building programs.” This is especially important in lieu of “new

external realities” that management has identified for them to strategically compete. These, as

the case mention, include the prevalence of convenience stores as a key segment in URC’s retail

channels as well as the rising power and influence of social media, both of which are results of

millennial behavior.

Keeping that in mind, as important push strategies might be to capturing demand on the

side of distributors and resellers alike, adoption of a dual adaptation pull strategy is vital to

capitalize on the rise of social media as an integral marketing value to build URC’s brands in

accordance with the various business environments it operates in.

All in all, the company for the most part already has the scale and capacity to meet the

current demands of the market. What will determine the company’s success in the near future
regarding their goal of meeting their 2020 vision, will be their ability to leverage their flexible

international structure into finding the appropriate business-level strategies that will capitalize on

the trends developing in the markets they serve.