Wimm-Bill-Dann in Russian Market Research Paper

Wimm-Bill-Dann in Russian Market - Research Paper ExampleBy the halt of 1999 the wages of common people tumbled by 30% and their pensions by 45% in value.These factors had a cascading effect on the economy resulting in high elicit and grain prices, which coupled with inefficient agricultural return that almost halved livestock r stamp outered supply of raw milk the weakest link in the supply chain for the dairy farm industry. While it was estimated that 35%-80% of a family budget was spent on food for thought, the economic situation in the country demanded that producers keep their prices low. The other factors that had a bearing on competitive rivalry were access to financial resources, wider product range and efficient distribution. This in turn meant tight management controls on production and distribution cost especially to reach produce to regions where the purchasing power was lower than in cities like Moscow.Sources of competition (Five forces) Before WBD arrived on the s cene the Russian dairy area was either regional or city-centred. They were making packaged milk, kefir (a fermented dairy drink), soured cream, butter, cream, and cottage cheese. The packaging technologies available to the small players were not able to provide capacious shelf life and limited their geographical reach. As the regional dairies were catering to markets as far away as 500 miles, under utilisation of production facilities, high logistics and distribution costs pushed up the prices. The economic crash of 1998 and the erosion of the rouble made the consumer highly price sensitive. WBD spotted a business luck in the situation. By expanding its product range and longer storage facilities the caller-up felt that it could reach wider markets, offer low prices and utilise business opportunities offered by a liberalised economy. WBD actively pursued the policy of regional expansion, expanded its product portfolio and continuous advertising helped the company capture 30% each in the national dairy and juices markets. The situation also prompted western companies to relocate their production facilities to Russia in order to trim costs and be able to compete there. Therefore during this period the company had to contend with the entry of new international players such as Campina, Danone, Erhmann and Parmalat. WBD relied on branding, lineament control, expanding product range and continued diversification as the strategy for fighting competition. The recovery of the economy in the new millennium saw changing trends in consumers becoming wealthier, more westernised, inclined to spend more and demanding high end products. Consumers began demanding healthy diets, more products with biologically active ingredients, special product lines for children with various multi-vitamin and other supplements.SWOT As WBD set its sights on becoming the nations leading food producer early on the company had a head start on competition. The company began implementing the i dea by a multi-pronged strategy product development, distribution, quality control, packaging, marketing and geographical expansion beyond Russias borders into other CIS countries like Kyrgyzstan and