Reference no: EM132800643

Fonterra Co-operative Group Limited, is a dairy co-operative organization based in Auckland. It produces and exports commodities to 140 countries and is responsible for a third of worlds dairy trade. It is the largest company of New Zealand with revenues in excess of $17.2 billion New Zealand Dollars and profits exceeding $800 million New Zealand Dollars. Fonterra generates 20 percent of New Zealand's export receipts and 7 percent of its GDP. It is jointly owned by over 11,000 farmers of New Zealand and employs more than 22,000 people. In recent years attempts have been made to get shareholders to approve a public share sale in order to access more capital for global expansion.

The organization in its current form was founded in the year 2001 by means of merger of two of the largest co-operative dairies of New Zealand. Fonterra is fully vertically integrated: it runs dairy herds, manufactures and distributes dairy products, and is responsible for packaging, transportation, shipping and quality control. The key products of the company includes Milk, Butter, Cheese and Ice cream and the key markets for the organization includes New Zealand, Australia and Chile while having a significant presence in other countries like China and Sri Lanka.

Overseas expansion began days after Fonterra came in to being. In 2001 Fonterra announced plans for cooperation with Nestle´ in the Americas, Arla in the United Kingdom and Britannia Industries in India. Such strategic partnerships allow Fonterra to secure supplies of milk from diverse regions, reducing price volatility. It is also a way to enter markets where demand is met by local supply without major capital investments and financial risk. This especially facilitates entry into developing country markets, which can otherwise be difficult because of the tendency towards disorganised supply structures. Thus, Fonterra's idea is 'to put your horsepower behind local brands and improve them, forming alliances and making acquisitions behind country borders and trade barriers.

Develop a SWOT analysis in which you identify both internal and external variables of Fonterra in the current international context. (At least two per category) Please, not only mention each element but also justify why you consider it relevant to the organization's strategy. Then, write one improvement strategy for the four quadrants SO-ST-WO-WT.