Logoplaste Harvard Case Study

Case Study - Logoplaste

by Min Si Thu

1. Plastic pellet

1.1. supplied by Petrochemical

2. Rigid plastic container industry 21% of container

2.1. APA largest 30%

2.2. FCMGs such as P&G, Coca-Cola

3. Industry Trends

3.1. 1. Industry consolidation 2. production consolidation (demand increased) 3. sustainability (eco-friendly packages, such as bio-polymer bottles, efficient Supply chain Mgt) 4. globalization

4. Competition

4.1. 1. Alpla-Werke

4.2. 2. Amcor

4.3. 3. Graham

4.4. 4. Packaging and Plastipak

5. Challenges

5.1. 1. Structure and Financing – succed in financing in 2010, the entire Brazilian operation

5.2. 2. Client recruitment and retention – 100% customer retension, let client enjoy higher scale benefits (Lean)

6. Distribution

6.1. On-sit sets up inside or close to clients’

6.2. Off-site units serve customer from a central location,

6.3. scale benefits and diversifying client risk

7. Globalization

7.1. North America, Central and Eastern Europe, China and Asia- Pacific

7.2. Challenging markets – accepted P&G offer by first seting up plant in Malaysia

8. History

8.1. - in-house manufacturing in Europe with its “hole-in-the-wall” concept.

8.2. Dictated minimum production scale and just-in-time deliver.

9. Initial Expansion

9.1. Hole-in-the-wall concept expanded to Spain in 1992

9.2. In 1997, partnered with Coca-Cola and in 1998, partnered with 2 larger plants for P&G

10. Business Model

10.1. open-book policy

10.2. null transportation costs

10.3. reliable quality and competitive prices

10.4. Strategies

10.4.1. Cost competitive player,

10.4.2. ILab, innovation Lab, established partnership with various equipment manufactures.

11. Global Org

11.1. IMF

11.2. World Bank

11.2.1. The Multilateral Investment Guarantee Agency (MIGA)

11.3. WTO (GATT)

12. Strategies

12.1. Core Strategy Tools

12.1.1. Porter's Five Forces

12.1.1.1. Supplier

12.1.1.2. Buyer

12.1.1.3. Competitive rivalry

12.1.1.4. threat of substitution

12.1.1.5. Threat of new entrant

12.1.2. PEST

12.1.3. SWOT Analysis

12.2. Understanding Competitive Advantage

12.2.1. USP Analysis

12.2.2. Porter’s Diamond

12.2.3. Kay's Distinctive Capabilities Framework

12.2.4. The ADL Matrix

12.2.5. Ohmae's 3C Model

12.2.6. VRIO Analysis

12.2.7. Competitive Intelligence

12.2.8. Weisbord's Six-Box Model

12.2.9. Kotler and Keller's Five Product Levels

12.3. Strategic Options

12.3.1. Developing Your Strategy

12.3.2. Porter's Generic Strategies

12.3.3. Bowman’s Strategy Clock

12.3.4. Mintzberg's 5 Ps of Strategy

12.3.5. Blue Ocean Strategy

12.3.6. Scenario Analysis

12.3.7. Understanding Game Theory

12.3.8. The Value Disciplines Model

12.3.9. Value-Based Management

12.3.10. The Business Motivation Model

12.4. Organization Design

12.4.1. The McKinsey 7S Framework

12.4.2. Strategic Alliances

12.4.3. Diversification

12.4.4. Adizes' Corporate Lifecycle

12.5. Strategic Prioritization

12.5.1. The GE-McKinsey Matrix

12.5.2. The Boston Matrix

12.5.3. Porter's Value Chain

12.6. Executing Strategy

12.6.1. The Balanced Scorecard

12.6.2. Corporate Governance

12.7. Quality Strategy

12.7.1. Total Quality Management (TQM)

12.7.2. Six Sigma

12.7.3. Benchmarking

12.7.4. Manufacturing and Operations

12.7.4.1. JIT

12.7.4.2. Green Mgt

Introduction

            The paper attempts to describe the reason for the various Multinational Corporations to prefer Logo plaste over its competitors, along with considering the global footprints of the company. The paper also attempts to provide the issues faced by the company in achieving towards its goals. Furthermore, the paper provides the analysis of the company through performing internal and external audit by implementing SWOT analysis. Moreover, the paper also attempts to provide various alternatives which can help the company in pursuing a growth strategy to enhance its sustainable profit earning. Lastly, the paper provides recommendations through selecting the best alternative from the various alternatives, while it also provides the implementation plan.

Why would global corporations such as P&G and Unilever favor Logoplaste over its competitors? How does your answer change if Logoplaste increased its global footprint?

            The global corporations such as P&G, Unilever, and Coca-Cola have competitive edge over its competitors because these are the global brands which have presence in various countries. The corporations have a higher market share in many Asian and European countries.

Along with this, these clients require to develop packaging according to their own needs and quality because they do not want to compromise on the product quality. Therefore, these product traits and characteristics are being offered by Logoplaste through its business model.

            The business model of Logoplaste is based establishing each production units and plants separately for its each customer according to their specification. These plants are situated inside its clients’ filler plants, or it is present nearest to the location of the clients’ filler plants. This decreases the transportation and inventory cost of the company. Furthermore, penalties are awarded to FMCG companies when the product is delayed to the retailers, therefore the particular strategy also provides a safe passage for the company in meeting its product solutions.

            Due to the increase in the global footprint of the company, Logoplastedeveloped a business unit ILab which had been designed for the purpose of business providing solutions to its clients. Due to the increase in the global arena and development of a larger customer base, the company designated the particular business unit for the purpose of serving its clients in maintaining a long-term relationship. Due to the particular strategy, the company has been able to maintain almost a 100% customer retention strategy.

Issues Faced by the Company

            Even though the company has secured good financial results in many of the existing markets the company has been currently operating, Logoplaste is searching for further growth opportunities in order to guarantee the company’s continued success. The large clients of the company is demanding to provide them a higher level of service than its previous offering along with its presence in various countries operated by their clients.

Therefore, the company needs to decide whether it shall stick with the existing markets with various local firms, or it could enter new markets to target large companies. Lastly, the company also have an option to acquire Graham Packaging which is one of the major players in the industry so that Logoplaste could become the major player in rigid plastic industry.

Analysis

SWOT Analysis

Strengths

            The business model of Logoplaste is unique from its various competitors as it focuses on establishing a plant according to the needs of its clients. The company established plants for each of its client separately either inside of the clients’ company or closer to its location. This decreases the transportation cost along with the inventory cost, since the company has introduced Just-in-time inventory system where the company does not have any inventory storage.

Logoplaste Case Analysis Case Solution

            Along with this, through the particular business model the company has a customer retention rate of almost 100%. The company implements a long-term relationship with its customers. The company has established a business unit ILab which provides business solutions to its various clients across different countries, while also manages long-term relationship with these clients. The company offers competitive pricing and a high quality product.

            Furthermore, the company has been the top 10 manufacturers of the rigid plastic container which has the highest percentage of demand in the global arena. Along with this, the company sold a total of 7.2 billion containers in the year 2009, while in 2010 the company owned a total of 60 plants across the world. The sales for the recent year in 2010 has been €300 million. ...................................

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