COFCO Xinjiang Tunhe Co. Ltd. Harvard Case Solution & Analysis

In 2005, COFCO Ltd, one of the largest and most successful companies in China, has acquired Xinjiang Tunhe, tomato processing firm that had been in recent years, poorly controlled. COFCO Tunhe changed the management team decided to create a culture of professionalism and inspire employees, the customer came first. Qin Yelong, Tunhe president had ambitious goals for the company. He wanted Tunhe is the world's largest supplier of tomato products (first insert) for three years. To do this, Tunhe, necessary for the relationship with the top-of-the-line international clients such as HJ Heinz and Unilever. These companies have been interested in Tunhe as provider, but want assurances that the company would provide a reliable supply of high quality products at competitive prices, and safely, the tomato paste in the year before they complete long-term contracts with Tunhe. Ch'in and his management team knew that, to be number one, Tunhe would have to take a leading role in the modernization of China's current "peasant mode of agriculture." Indeed, the tomato supply Tunhe came with 200,000 mostly uneducated farmers working small plots of land (less than 0.2 ha on average) with little to no mechanization, scattered regions of Northwest China. The problem: How to manage so many farmers (their number will grow to 300,000, if the goals were achieved Qin income) in such a way as to ensure the consistent quality of tomatoes and safety without significantly increasing costs. Ch'in realized that Tunhe had the opportunity to create a new mode of agriculture, which could become a model for all of agribusiness in China is moving forward. On the other hand, a wrong step can lead Heinz and other major international companies to look for new ways to meet their nutritional needs. "Hide
by David E. Bell, Aldo Sesia Source: Harvard Business School 32 pages. Publication Date: June 30, 2008. Prod. #: 508079-PDF-ENG

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