AGRANA CASE

Agrana Case



Agrana Case

Introductory Facts

The most important fact that relates to the case of Agrana is that most of the consumers are not aware of the fact that Agrana remains the world's largest supplier of most of the brands like Nestle and Coca Cola. Moreover, the timing in which the Agrana was founded was apparently the most suitable timing for the business and it also facilitated the growth of business immensely. The fact that when Agrana started its business operations in Central and Eastern Europe (CEE), it was opened to the largest markets of Western Europe during 1989 remains important to analyze in the case. Moreover, the ability to finance its operations through foreign direct investment within CEE made Agrana more competitive within the market (Mike, 2008 Pp. 15-30).

The financing activities remain the most important aspect of every business. The methods Agrana utilized for financing its operations helped the company enhance its economies of scale which ultimately resulted in competing with significant and huge rivals of Western Europe. Having its headquarters in Austria, Agrana depicted huge advantages over other Western competitors mainly because of the bonds Austria possessed before the Cold War. Moreover, the employees of Agrana were able to understand the market more clearly and accurately than other competitors. Being better able to understand the market; made Agrana exploit the business opportunities in a more effective manner than its competitors.

Assumptions

The basic assumptions that underlie the analysis of the case relates to the fact that the case do not provide sufficient information about the competitors. Moreover, the economic trends and demands for the products related to Agrana's business are also not shown in a manner which can make the reader aware about how the diversification of Agrana becomes so significant.

Issues

The case represents the issues of globalization and expanding businesses over geographical boundaries. Moreover, the international perspectives for the purpose of expanding business beyond the geographical boundaries remain another important issue.

Primary or Major Issues

Competition within the industry of Agrana is seemingly quite intense. The underlying competition which Agrana faces makes the case of Agrana fairly recognizing and interesting. The most important aspect of the case is the fact that Agrana was really small when it entered the market. The potential entry of other companies was remained a main issue of concern for Agrana. Being the producer of two extremely generic products like sugar and starch made Agrana vulnerable to extreme competition. The major issue was to create differentiation of the products of Agrana in the minds of customers (Mike, 2008 Pp. 15-30)

Secondary or Related Issues

Another issue that is important with the reference to the case is the completely unrelated diversification adopted by Agrana. Despite the fact that diversification is important in today's business world, a complete unrelated diversification in the field of Bio fuel is an important issue in my viewpoint. Moreover, the expanding plant locations all around the world also created several issues for the management of Agrana. Managing so many plant locations effectively required Agrana to ...