Chupa Chups International Business Strategy
and capabilities analysis
To be successful, a company has to develop a sustainable competitive advantage. It comes both from the external environment (opportunities and threats) and from the internal one (resources and capabilities).
In this case study, we will concentrate mainly on the internal environment.
The competence-based model focuses on the resources and capabilities the firm need to develop that will be impossible for its competitors to imitate (DeWitt and Meyer).
The resources are what a firm has.
Tangible resources are:
- Financial: as we can see in appendix C and D, the sales of the company are very high and increase every year. Without any more information we can just suppose that the financial health of the company is good.
- Physical: the company owns production plants in Spain and France, producing lollipops and other varieties of sweets, and around the world (China, Russia…)
- Organizational: the decision system is informal and simple, enabling quick decision and easy reaching consensus. As the top management is very accessible, the information spreads better.
- Human: the staffs are very motivated and highly committed to the company. The employees benefit of a lot of autonomy and confidence, good wages, involvement in problem solving, friendly and energetic atmosphere.
The company benefits of motivated people, working hard, carefully recruited. They can exchange staff between subsidiaries.
Intangible resources are:
- Innovation: the company was the first to develop a sweet on a stick. The lollipop is an innovative product. The plastic stick developed later is also an innovation as it was a new process technology.
- Technology: thanks to the purchase of Confipack, the company benefits of production technologic process that increases its production levels. The proprietary process technology protects its from the competitors.
- Distribution: The distribution company, Chupa Chups Diversificacion is very responsive to the demand and takes part of the rapid expansion of the brand.
- Reputation: thanks to its good marketing, its innovative products, its original wrapping paper and the good quality of the product, the brand Chupa Chups is known all over the world.
Having identified the resources of the company, it is important to examine how does the company integrate them to achieve its objective: the capabilities (what a firm does).
It is the unique combination of these capabilities that creates core competencies having strategic value and sometimes leading to a competitive advantage.
We will look at the company’s capabilities through its Value Chain (M. Porter).
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FIRM INFRASTRUCTURE Simple hierarchy, informal meetings, easy decision taking, familial structure, accessible top management.
HUMAN RESOURCES MANAGEMENTTalented and motivated people, high commitment, involvement in decision taking, friendly atmosphere.
TECHNOLOGY Benefits from Confipack technology and from the proprietary process.
INNOVATIONVery innovative company.
INBOUND LOGISTICSNo information given. OPERATIONSHigh level of production, good quality of products. OUTBOUND LOGISTICSNo information given. MARKETING AND SALESGood advertising conferring a good reputation to the firm, good [next page]