Harvard Case - Copenhagen Merchants Group and the EU Farm To Fork strategy
"Copenhagen Merchants Group and the EU Farm To Fork strategy" Harvard business case study is written by Andrew Inkpen, Tine Walravens. It deals with the challenges in the field of International Business. The case study is 10 page(s) long and it was first published on : Dec 21, 2023
At Fern Fort University, we recommend Copenhagen Merchants Group (CMG) embrace the EU Farm to Fork strategy as a strategic opportunity to enhance its brand image, strengthen its supply chain, and expand its market reach. This recommendation entails a multi-pronged approach, incorporating a combination of strategic alliances, product diversification, supply chain optimization, and marketing initiatives aimed at showcasing CMG's commitment to sustainability and consumer well-being.
2. Background
This case study focuses on Copenhagen Merchants Group (CMG), a leading Danish food distributor facing the challenge of aligning its business model with the EU's Farm to Fork strategy. This ambitious policy aims to transform the food system by promoting sustainable and healthy food production, reducing food waste, and fostering a more circular economy. CMG, with its strong presence in the Danish market and international aspirations, must navigate this evolving landscape to maintain its competitive edge.
The key protagonists in this case are:
- CMG's Management Team: They are tasked with developing a strategy to adapt to the Farm to Fork strategy and its implications for the food industry.
- EU policymakers: They are driving the Farm to Fork strategy, setting regulations and incentives that influence CMG's operations.
- Consumers: They are increasingly demanding sustainable and healthy food options, creating a market opportunity for CMG.
- Farmers and producers: They are key partners for CMG, and their ability to meet the Farm to Fork requirements will be crucial for CMG's success.
3. Analysis of the Case Study
To analyze CMG's situation, we can employ the Porter's Five Forces framework to understand the competitive landscape:
- Threat of New Entrants: The Farm to Fork strategy encourages new entrants, particularly smaller, more sustainable producers. This increases competition for CMG.
- Bargaining Power of Buyers: Consumers are becoming more conscious of sustainability and health, giving them greater bargaining power. This presents an opportunity for CMG to differentiate itself by aligning with these values.
- Bargaining Power of Suppliers: The Farm to Fork strategy empowers farmers and producers, potentially increasing their bargaining power. CMG needs to build strong partnerships with suppliers to ensure a consistent supply of sustainable products.
- Threat of Substitute Products: Consumers have access to various food sources, including local markets and online retailers. CMG must offer a compelling value proposition to retain customers.
- Competitive Rivalry: Competition within the food distribution sector is intense, with established players like CMG facing challenges from both traditional and online competitors.
Furthermore, a SWOT analysis reveals the following:
Strengths:
- Strong brand reputation in Denmark
- Established distribution network
- Expertise in sourcing and logistics
- Commitment to quality and safety
Weaknesses:
- Limited international presence
- Dependence on traditional supply chains
- Potential for higher costs associated with sustainable practices
Opportunities:
- Growing demand for sustainable and healthy food
- Potential for new partnerships with sustainable producers
- Expanding into new markets with a focus on sustainability
Threats:
- Regulatory changes and compliance costs associated with the Farm to Fork strategy
- Increased competition from new entrants
- Potential for consumer backlash against higher prices
4. Recommendations
To capitalize on the opportunities presented by the Farm to Fork strategy, CMG should implement the following recommendations:
- Strategic Alliances: Form partnerships with sustainable farmers and producers, both within Denmark and internationally. This will secure a reliable supply of high-quality, sustainable products and enhance CMG's brand image.
- Product Diversification: Expand product offerings to include a wider range of organic, locally sourced, and plant-based products. This will cater to the growing demand for healthier and more sustainable food options.
- Supply Chain Optimization: Implement a robust supply chain management system that prioritizes sustainability and traceability. This involves investing in technology, establishing clear standards for suppliers, and monitoring environmental impact throughout the supply chain.
- Marketing Initiatives: Develop a comprehensive marketing strategy that highlights CMG's commitment to sustainability and its role in supporting the Farm to Fork strategy. This can include targeted advertising campaigns, partnerships with environmental organizations, and transparent labeling of products.
- International Expansion: Explore global market entry strategies to expand into new markets with a strong demand for sustainable food. This could involve foreign direct investment (FDI), mergers and acquisitions (M&A), or strategic alliances with local distributors.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: CMG's existing strengths in sourcing, logistics, and brand reputation can be leveraged to build a sustainable business model aligned with the Farm to Fork strategy.
- External customers and internal clients: The recommendations cater to the evolving needs of consumers who prioritize sustainability and health while also ensuring the satisfaction of internal stakeholders like farmers and employees.
- Competitors: By adopting a proactive approach to sustainability, CMG can differentiate itself from competitors and attract environmentally conscious consumers.
- Attractiveness: The recommendations are expected to improve CMG's financial performance by increasing market share, reducing costs through efficient supply chain management, and enhancing brand value.
6. Conclusion
CMG has a significant opportunity to position itself as a leader in the sustainable food sector by embracing the EU's Farm to Fork strategy. By implementing the recommended actions, CMG can strengthen its brand image, enhance its competitive advantage, and contribute to a more sustainable food system.
7. Discussion
Alternative options include:
- Maintaining the status quo: This carries the risk of falling behind competitors and losing market share to more sustainable businesses.
- Focusing solely on internal efficiency: This approach may not be sufficient to meet the evolving demands of consumers and the regulatory landscape.
Key assumptions include:
- The Farm to Fork strategy will be implemented effectively and lead to a significant shift in consumer preferences.
- CMG can successfully navigate the challenges associated with implementing sustainable practices and building partnerships with sustainable producers.
8. Next Steps
CMG should:
- Develop a detailed implementation plan: This should outline specific actions, timelines, and resource allocation for each recommendation.
- Establish a dedicated team: This team will be responsible for overseeing the implementation of the strategy and monitoring its progress.
- Communicate the strategy to stakeholders: This includes informing employees, suppliers, and consumers about CMG's commitment to sustainability.
By taking these steps, CMG can successfully navigate the evolving landscape of the food industry and emerge as a leader in sustainable food distribution.
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Case Description
In 2022, food prices around the world were rising rapidly, and the war in Ukraine was threatening supplies of fertilizer and grain. In addition to this looming food crisis, in 2019 the EU had passed the European Green Deal with the objective of transforming the EU into a modern, resource-efficient, and competitive economy. The Green Deal included the Farm to Fork (F2F) strategy, which aimed to make food systems healthy and environmentally friendly. The objectives of the F2F strategy included reduced dependence on pesticides, antimicrobials, and fertilizers; increased organic farming; improved animal welfare; and a reversal of biodiversity loss. The F2F strategy was expected to significantly reduce European grain production and increase prices. It was also expected to lead to more locally produced protein crops in Europe and reduced imports of protein crops (mainly soybeans) from South America.
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