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by Group 3, Section A

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Incorporated in 1938

Acquired by Unilever in 1943 for its value to its subsidiaries

MacFisheries (Fish),Bachelors Peas (dried peas) & Poulton& Noel Ltd(Poultry)

Frozen food business specially peas, beans, fish, meat,dessert, beefburgers

6o% of UK Frozen Food market share by tonnage

Pretax return on capital employed(1974) = 15.9%

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Long term contract with farmer

Strong Brand

Economics of Scale

Vertically integrated market

Large distribution Channels

Strong Brand

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UK FROZEN INDUSTRY IN 1942(EMERGING MARKET)

Rivalry

Moderate

Threat ofnew entrant

LOW

BargainingPower ofBuyers

LOW

Threat ofSubstituteProducts

LOW

BargainingPower ofSuppliers

LOW

UK FROZEN INDUSTRY IN 1975(DEVELOPED MARKET)

Rivalry

Moderate

Threat ofnew entrant

High

BargainingPower ofBuyers

Moderate

Threat ofSubstituteProducts

Moderate

BargainingPower ofSuppliers

High

Capital

intensive

Long term

contract

Less choice

Low cost with

new technology

Emergence ofsuper market chain

Emergence ofnew product

Too many playerin buyer market

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Economics of Scale has been achieved withvertically integrated market

Created high entry barrier by employing largecapital and large distribution channels

Differentiated product has been launchedbacked with high advertising budget

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Undeveloped Infrastructure: Frozen Industry was ininfancy stage with disorganized raw materialsuppliers, distributors and retail stores.

To use economics of scale.

To maintain high quality of product and securing rawmaterial like peas, at right time

Create barrier for entry of new entrant

Industry Practice: other competitor were followingsame practice

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Long term contract with farmer ensured propersupply and economics of scale

Procurement of high quality of raw material and

control over value chain ensured good product tocustomer

Create barrier for entry of new entrant by large

investment Specialized suppliers

High profit due to accumulation at different level

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Technology like Blast Freezer allowed freezingand packing to occur together enabling low costsmall scale entry.

Growth of Private labels promoted by retailer. Growth of Merchant market at each level of

chain

Growth of Home freezer centre Diseconomies of scale came into play with

increase in production.

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Reduction in cost of product.

More margin to the producer .

Reducing the inefficiency of verticallyintegrated system by focusing on specialized

supplier

Monitoring cost and incentive to allintermediaries to remain in fold.

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Focus on its Brand value. De-Integrate its business and try to use it

potential at its core area i.e. quality production. Distribution chain need to be consolidated and

inefficiency should be weeded out by use of IT . Reduce Product line and try to adopt high margin

product. Focus on high margin user and frequent buyer by

use of CRM technology.