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Ferrero final - Case Study
Marketing Management (2020)
Hebron University
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Hebron University
MBA Program
Marketing Management.
To-Prof: Samir Abuznaid.
From: Shireen Al-Qawasmeh.
Subject-
Ferrero Group Analysis – Case Study.
Chapter 3
Page 118-
2
nd
2019 - 2020.
Table of Contents
- I. Introduction Table of Contents Page NO
- II. Static on Ferrero Rocher Group
- III. Ferrero Groups Goals
- IV. The Ferrero Brands
- V. STRATEGY
- VI. Ferrero Value Chain
- VII. Understanding The Issue
- VIII. Framing the issue
IX. Ferrero for Future Framework Ferrero Rocher Projects
- XI. Conclusion X. SWOT Analysis of Ferrero Rocher
- XII. Final Recommendations
- References
manufacturing plants, 6 agricultural companies and the Michele Ferrero Entrepreneurial Project, active in Cameroon, South Africa and India. Since their products are also sold in more than 17 0 countries.
VII. Static on Ferrero Rocher Group
The Ferrero Group approved the Consolidated Financial Statements as of and for the year ended August 31, 2018 with a turnover of 10 billion Euro
Ferrero International S., parent company of the Ferrero Group, approved the Consolidated Financial Statements of the Group as of and for the year ended August 31, 2018. At that date, Ferrero International S. consolidated 94 companies worldwide, with 25 operating manufacturing plants. The Group’s products are present directly or through authorized distributors in over 170 countries.
Besides the global uncertainties and the industry challenges and trends, the Group was able to consolidate and confirm its performance during 2017/2018. The Ferrero Group continued to boost investment in its iconic brands and maintain a high level of operating income as well as strengthen internal R&D activities.
The sales of finished products increased by 3% (6% at constant
rates) driven principally by Germany, France, Italy, Poland, UK and the USA. 5. The products that led the growth in net sales of finished products were Nutella, Ferrero Rocher, Kinder Joy, Kinder Bueno and Kinder Chocolate. 6. The Group's average workforce in 2017/2018 was 31,748, an increase from 30,305 employees in 2016/2017. The headcount as of August 31, 2018 amounted to 35,146 employees, compared to 34,543 as of August 31, 2017. 7. In 2018 and even decades the global research on ecological evaluation models has grown. To measure the environmental impact through a life cycle, Ferrero has identified three key indicators in the most sensitive areas: The impact on global warming caused by the direct and indirect emission of greenhouse gases (Global Warming Potential - GWP); The total amount of energy used (Gross Energy Requirement - GER); Direct and indirect water consumption (Global Water Consumption - GWC)
VIII. F
errero Groups Goals - See the table in next page
Description Progress
IX. The Ferrero Brands
The role of Ferrero “Great Brands” in daily nutrition is in line with the basic guidelines of modern nutritional science:
- a varied and balanced diet provides all necessary nutrients;
- a healthy diet is based on the inclusion of all food types when consumed in proper amounts;
- a daily and moderate physical activity ensures a healthy lifestyle, while a sedentary lifestyle is a predisposing factor for becoming overweight and obese.
(+10% compared to 2009) 100% virgin cardboard3 from certified Reached in December 2014 sustainable supply chain 100% of virgin paper4 from certified sustainable Reached in December 2017 supply chain
In line with these principles, Ferrero Group have developed their strategy based on :
the careful selection of high-quality raw materials that provide essential energy and micronutrients: the physiological role of these ingredients’ natural components is preserved by peculiar strategic industrial processes, preserving their quantity and importance.
the promotion of foods that can be integrated into food education programs for both consumers and the medical-scientific community.
suitable portions of products that can help consumers better manage their daily energy needs within their overall diet.
the development of an educational program dedicated to promoting active lifestyles.
X. STRATEGY
ABCDE Plan (A Business Code Dialogue Engagement) Strategy
Since 2011, the Ferrero Group has been implementing the ABCDE Plan (A Business Code Dialogue Engagement), aimed at sharing our Code of Business Conduct with all stakeholders in the value chain, and in 2013 the goal of sharing was achieved. The code is based on the Ferrero principles, complies with our Code of Ethics and defines Ferrero practices in the following areas: I. excellent product quality and safety; II. commitment to protecting human rights; III. environmental protection and sustainability; IV. guaranteeing standards in the workplace environment; 5. business integrity. since December 2013, Ferrero has been part of the Supply Chain Initiative, promoting the implementation of the Principles of Good Practices in Vertical Relations in the Food Supply Chain. In March 2018, the promoters of the Supply Chain Initiative submitted their fourth annual report, that provides an overview of
The 5RS Integrate
The 5Rs into Ferrero Eco design approach In the development and planning of packaging, Ferrero adopt what they define as the “5R Strategy”, aimed at achieving the very best in terms of quality and freshness, while minimizing the quantity of waste produced.
The 5R are the principles identified by Ferrero as fundamental, which guide the design of packaging with a view to Eco design.
The phases of packaging development can be summarized as:
The consumer expectation
Idea generation
Technical feasibility analysis
Quality and production tests
Product packaging phase 6. Delivery to our consumers
Innovation Strategy
Ferrero approach to innovation combines two complementary and mutually reinforcing models.
Product To Science: Innovation is one of the main drivers of our success: over the last 50 years, we have created innovative products that have become, over time, true icons of the chocolate confectionery sector.
Science To Product: Ferrero Open Innovation (OI) Science embodies the “Science To Product” model: it explores, identifies, evaluates and selects external breakthrough innovation in science and technology that can deliver substantial impact for Ferrero innovation.
more than 1,333,000 controls on primary and secondary packaging, including organoleptic tests and defect detection tests
Responsible Communication Strategy
apply the “Framework for responsible food and beverage communication” adopted by the ICC, International Chamber of Commerce, as well as the regional and national self-regulatory codes developed locally on that basis.
- the International Food & Beverage Alliance (IFBA), through which world’s leading food companies commit to promote self- regulation programs regarding formulation and portioning of food, nutrition information to consumers, responsible advertising and physical exercise;
- the World Federation of Advertisers (WFA), an international organization which promotes good and efficient practices in relation to responsible advertising. Together with other companies, we participate in a number of self-regulatory initiatives, including:
- responsible advertising aimed at children EU Pledge;
- the promotion of fair practices along the food supply chain.
Kinder Surprise Company Strategy
- The Story of Ferrero Surprises
For over 40 years, Ferrero’s KINDER® products have contributed to the happy growth of children of all ages, generating moments of intense emotion every day. 2. Kids and The Value of Play
Kids are our future, and that is why Ferrero strongly believe that a happy child today will produce a better adult tomorrow.
Kinder + Sport Strategy
KINDER + SPORT JOY OF MOVING, ACTIVE PEOPLE Our international Social Responsibility program, Kinder + Sport Joy of Moving, promotes the importance of movement and daily physical activity for children and young people around the world, to support
their long health and happiness. The movement is gaining momentum all the time.
XIII. Ferrero Value Chain
Ferrero approach to achieving sustainable growth involves Ferrero entire value chain, categorize into the following stages:
Create: developing packaging that ensures great taste and a superior product experience.
Choose: sourcing the best ingredients, sustainably.
The Ferrero Farming Value (FFV) Hazelnut Production Standard
XIV. Understanding The Issue
Every process of production causes environmental impacts and costs. If left unchecked, these problems negatively impact businesses both directly, as in supply chain disruptions, and indirectly, as in health hazards that lead to loss of man-hours and efficiency. Following are some common environmental problems that businesses need to address to ensure sustainability and long-term financial viability:
Pollution - is one of the world’s biggest environmental problems, as it tends to be a typical byproduct of modern life. Air pollution, for instance, is the result of fossil fuel combustion, as well as various gases and toxins released by industries and factories.
Waste Disposal - As populations and industries grow, so does the problem of proper waste disposal. Communities accumulate so much garbage that properly disposing of it has become increasingly difficult. Solid garbage, for example, is usually buried in landfill sites or incinerated, which is extremely harmful to the environment. Decomposing garbage may attract vermin, give off a foul smell or leach into groundwater. The smoke given off by burning garbage contributes to air pollution.
Climate change - is a global problem with grave implications: environmental, social, economic, political and for the distribution of goods. If present trends continue, this century may well witness extraordinary climate change and an unprecedented destruction of ecosystems, with serious consequences for all of us. Shoreline erosion, coastal flooding and greater storm surges cause significant damage to coastal property and infrastructure. Cities, inhabited islands and tidal wetlands will be more prone to flooding. These can indirectly lead to business losses in the form of operational disruptions among suppliers, which in turn affect the rest of the supply chain and customers. In addition, floodwater can bring waterborne diseases that are harmful to people, plants and livestock. Climate change can also trigger a higher demand for energy. As the climate gets warmer, people consume more electricity for air conditioning. Greater electricity consumption, in turn, means higher operational costs for businesses. Furthermore, a higher energy demand translates to increased consumption of natural resources such as fossil fuel and water, resulting in a lack of resources for companies to turn into products and services. Climate change has negative effects on agricultural productivity.
Drought/Inadequate Access to Water - The world’s water supply is becoming increasingly scarce. Such water shortages have a detrimental effect on agriculture. Farms are dependent on water for irrigation, so a decrease in water supply will drastically
The FER-Way project.
Ferrero Group believes that its primary responsibility is to measure the impact of the entire supply chain of its products. Only once it has a clear vision of its own impact can it manage and reduce it.
Since 2009, the Group has been measuring its Carbon Footprint annually5 , committing to gradually increasing its boundaries.
Since FY 2013/2014, with the launch of the FER-Way - Ferrero Environmental Responsibility Way - project, aimed at the correct management of environmental sustainability, the Group has been paying particular attention to the improvement of data accuracy, to the greater inclusion of indirect emission sources and to the redefinition of indicators and measurement parameters that follow the most recent developments in the scientific field. This will allow the identification of risks, opportunities and strategic action to be taken.
The Ferrero Group is also committed to analyzing the main brands’ environmental footprint. For this reason, a project was piloted in FY 2012/2013 with the aim of identifying an internal methodology to define a specific sustainability roadmap for the different product categories. At the same time, the Group took part in the ENVIFOOD PROTOCOL 1 test, by contributing towards the implementation of a European methodology with the aim of conducting analyses of the environmental impact of food and beverages.
The test has allowed to identify improvements in the application of the methodology, highlighting peculiarities for the food & drink sector and links to the PEF (Product Environmental Footprint) methodology developed by the European Commission to measure and disclose the potential environmental impact of a product’s life cycle.
1 Environmental Assessment of Food and Drink Protocol
Ferrero final - Case Study
Course: Marketing Management (2020)
University: Hebron University
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