TETRA PAK VS GREATVIEW Harvard Case Solution & Analysis

TETRA PAK VS GREATVIEW Case Solution

Introduction

A company originated from Sweden and headquartered in Switzerland became one of the leading companies in packaging solutions and food processing. The name of this company is Tetra Pak, it is owned by Tetra Laval group. It enjoyed its power and influence because of initiation of new aseptic packaging and carton to preserve milk for long routes and storage. Tetra Pak has remained very competitive in its industry. Due to weak regulations in China, the company has significantly enjoyed the power of tying and bundling strategy. Moreover, company's products were sold in over 170 countries with 23.5K employees and 40 technical service centers. Tetra Pak is well known for its R&D centers. Continuous innovation has remained the key to success for Tetra Pak. After enjoying its power in China since 1973, in 2003, a domestic player (Great view) emerged to beat this existing player. After gaining success in China, Great view planned to move into the European market, where it started building manufacturing plants for its products. Great view became successful in snatching market share from Tetra Pak. Moreover, regulations were now changing in China because of China's inclusion in WTO. Hence as per rules, the competition now has to remain fair. Antitrust law was followed properly, which is why Tetra Pak's dominance over its customers died down. Antitrust law gives rights to each customer to choose suppliers of their own choice. The company followed different strategies in China as well as abroad to tackle this cut throat competition. These strategies include taking customer feedbacks, making environment-friendly products, and continuous innovation. Despite this, competition was much aggressive. Tetra Pak now needs to do something out of the box in order to maintain its market leadership around the globe.

Problem Statement:

China is the second largest market for the industry followed by Europe. This is why China was on the radar of different players like Tetra. Initially, Tetra Pak enjoyed its monopoly in packaging and food producing segment. However, Great view came into the market and started bottleneck competition with Tetra. Now, Tetra Pak has to form some strategies in order to maintain its market leadership. Along with that, Tetra Pak has to tackle regulatory pressure and the threat of new entrant.

Case Analysis

PESTLGD Analysis

Political: Tetra Pak was somehow reluctant to follow the rules and regulations of host countries because regulatory bodies in China were not so much effective initially. After continuous cry from customers as well as competitors and consumers, the government passed a resolution of encouraging fair competition, which discourages monopoly.

Economic: Since population was increasing year over year, the demand for milk consumption was increasing as well along with per capita income in the country. Each of these factors was in favor of food processing sector.

Social: People’s lifestyle was changing; they preferred packaged milk instead of loose milk. It was estimated that in developing countries, consumption of packaged milk reached up to 70% in overall sales volume.

Technological: Technology in food processing sector was considered as main weapon to beat competitors. Due to technological advancement, Tetra Pak was enjoying its power. Moreover, Great view was also expanding its operation by incorporating latest plants into its production line..............

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