Wilmar International Limited Report
Major Stakeholders of the Wilmar International Limited include Kuok Khoon Hong, Martua Sitorus and Robert Kuok. The group operates in Asia, America, Africa and Europe. The activities of the Wilmar International businesses included crushing of oilseed, cultivation of oil farm, refining of edible oil, sugar refining and milling, biodiesel, oleochemical, grain processing and fertilizer manufacturing (Roelen, et al. Wilmar international organization encompasses the value of the entire chain of processing agricultural commodities right from processing to branding, mechanization and distribution of various agricultural products. The organization operates in more than fifty nations and consists of a multinational force of around ninety-two thousand employees who help the organization in its operations. The Board of the Organization is supported by an administrative team which is responsible for executing the operations and strategies of the firm.
Sustainability of the organization is also incorporated in the Risk Management Structure of the firm through the Risk Management Committee which reviews sustainability issues. This paper is set to strategically analyse Wilmar International Group synthesis various solutions and ideas related to strategic issues of the Wilmar International Limited. Macro Environmental Analysis of Wilmar International Limited To commence with, macro environment of the Wilmar International Limited involves a number of factors that affect its operational economy. The influence that the micro environment has to the Wilmar International Limited direct depend on their interlacement. By looking out the explosion of organic food in various parts of Asia, more consumers are now becoming health conscious. Lastly, the technological external factors of the Wilmar International majorly covers the impact of change in processing of commodities and distribution channels.
The PEST Analysis generally and precisely depicts the macro environmental factors of the Wilmar International. Interconnection between Different Environmental Factors in Terms of Key Opportunities and Threats There are several interconnections between various environmental factors of the Wilmar International and the overall influence that they have in regard to key threats and opportunities in the operational industry of the firm. Wilmar International Limited has three key opportunities (Allen, 2017). Strong forces increase competition while weak forces decrease competition. The agricultural industry has been facing continuous headwinds as result of progressive decline of the economic activities which have in turn led to decline in the prices of commodities. This makes the agricultural industry very competitive with a considerable number of mature and large companies competing with the Wilmar International Limited for market share.
Porters 5 Forces Figure 1. 1 Diagrammatic Representation of Porters 5 forces model of Wilmar (Tuithof et al. Suppliers Bargaining Power The agricultural products of the Wilmar International are vertically integrated and thus they conglomerate. The firm owns and manages the organization’s production chain right from the raw materials resourcing, to refining and to distribution and selling of products (Sen, 2017). Therefore, the associated production cost is highly stable with and its costs are independent on the prices of commodities. Furthermore, the company has diverse business interests in Indonesia, Malaysia, Africa, Australia, India, Ukraine and China that helps the company in spreading out the potential costs risks. Substitute Products Threat The threat associated with substitution of products out of core products is reduced by business interest of the company in extensive range of substitute products through processing and refining of other commodities (Roelen, et al.
Availability of Success Drivers The CEO of Wilmar International, Mr. Kuok attributes the success of the organization to identification of a good potential business and where the firm had obligatory skills. Another significant core factor was that the organization had a long-term vision for its activities. Wilmar International developed a number of businesses that were synergized with existing ones where expertise and resources such as manufacturing, trading, distribution and marketing facilities could be shared (Amarh et al. The availability of success drivers within the Wilmar International are considered as one among its key competencies of the organization in that it has contributed to the success of the Wilmar International through its willingness to venture to newly promising markets to get first mover advantage.
Components of Integrated Business Model of the Wilmar International Forward Integration In many occasions, several companies develop from a single trade focus to realize vertical integration. One way through which this can be realized is where a wholesaler or manufacturer carries out the processes of distributions to ensure that commodities reach the target consumers (Amarh et al. Wilmar International Limited might decide to establish its own distribution centres and manage the distribution arrangements or sell its products directly to the consumers. Backward Integration The contrary approach to vertical integration happens when reseller of a certain commodity decides to acquire its suppliers and start its own distribution or manufacturing operation (Sen, 2017). When a retailer or a distributor engages in distribution or manufacturing activities, the type of integration is regarded as backward integration.
One way through which this deal benefitted Wilmar International is that it brought expertise to the organization for the development of large sugar plantations in several regions. Such international links have also given Wilmar International access to Indonesian markets. Recommendations Based on the internal assessment, macro environment analysis and competitive strategy of the Wilmar International Limited, the administrative team of the Wilmar International Limited needs to establish an ongoing process for monitoring and improving human resources management within the organization’s plantations. For the Wilmar International organization to continually verify the progressive nature of the above issues, the internal management team has to develop an action plan that will ensure follow up and implementation of the processes. List of References Tuithof, M.
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