Sustainability Goals in Food Logistics

1. Introduction

Nagel Group Limited is the company that specializes in the category of food logistics and it finds it to be operated throughout Europe. The headquarters of the company is located at Versmold and it is found to have total employment of 12,000 people in more than 130 different locations. The primary aim of the company is to ensure that the customer in Europe would be able to buy fresh food items every day in the shop. The total turnover rate or amount of the company is analyzed to be 2 billion Euros. The company deals with moving the large collection of food consignments which can be categorized as meat, frozen products and dairy products all over Europe. The company also aims to reduce the actual emission of C02 by more or less 20 percent within the duration of the coming five years. The issues like excess emission of fuel are considered to be a challenge for the different industry and hence to overcome it the company is using resource-saving and fuel optimized technologies for a different purpose. This company is selected for the study as it is easier to understand the importance of strategic management in the business using its data and for the competitors. The company seems to have better developments in its opportunities and also have a better competitive advantage over other food logistics sector. The primary aim of the study is to understand the role of strategic management in the organization using different analytical methods like SWOT Analysis, PESTLE analysis, VRIO Framework and many others.

2.0 Environmental analysis

2.1 Macro Trend environment analysis

The section will discuss the PESTLE Analysis that will identify the risk that is occurring in the business and also the opportunities that are occurring.

2.1.1 PESTLE Analysis

The “PESTLE Analysis” is one of the essential tools that can be helpful to identify the environment in which the company is operating. It is summarized as below

Political factors: The political environment of the United Kingdom is a favorable one with effective support from different policies and trade laws. The factors like regulatory practices can be one of the essential factors that help the country to improve the ranking of different business (Rothaermel, 2016) . The actual size of the budget allocated by both the national level and the local government helps in boosting the inflation rate for the company over a certain period of time. The transition that occurs between the government of the United Kingdom and also the consistency related to the policy from one government to another considered being optimal political factors that affect the business.

Economical Factors: There are various economic factors that affect the growth of the company in the United Kingdom like there is a high rate of work-force productivity in the United Kingdom which helps the company “Nagel Group Limited” to have 12000 total employees working in an organization. The “foreign exchange rate” of the company seems to be an essential factor as it produces maximum capital amount by the company (Aguinis et al. 2017). There is a high rate of fluctuation in the price of dairy and other frozen products which can also have an impact on the performance of the company. The rate of employment also has a deep impact on the strategy of "Nagel Group Limited" as it will provide more number of customers and also the company can hire and train more employees or staff (Al Falasi et al. 2019).

Social Factors: The social factors can be categorized as women's participation in the workforce, the attitude of the company towards the safety and health of workers and customers and also the level of awareness that the company is generating in society. The company in order to reduce the hectic schedule of staff provides two to three months off so that they can visit their house and spent time with family. The company provides better support and environment to all the staff so that the employment rate will not get compromised. The women are encouraged to participate equally in the strategic decision and thus it can provide better opportunities to the business in market (Bergh et al. 2016).

Technological Factors: Technology is considered to be one of the fast disrupting models of business. It can be the utilization of artificial intelligence and another business model to improve the growth of the business. "Nagel Group Ltd." Ha continued to digitalize the entire process of business to increase work productivity. The popular and optimal version of the "Tracking and tracing" shipment Information system has been developed for better tracking of delivery through the utilization of mobile devices. The company also introduces an EDI system that helps in direct interaction with the customers without losing any data or information. (nagel-group.com, 2020)

Environmental factors: The Company in order to reduce the rate of carbon emission has introduced photovoltaic cells to a different branch in Borgholzhausen. The company in order to reduce the actual emission of carbon reduces the consumption of fuel using some advanced technology in business. Thus the factor helps the company to get better customer satisfaction of products in terms of health (Boris and Ushvitsky, 2017).

Legal factors: The legal factors include the laws that need to be followed while operating in the market. It is analyzed that the legal system is considered to be one of the essential factors which can prevent the company from numerous challenges. "Nagel Group Ltd." must need to follow the laws related to business. It must follow the health and safety law which can be followed both for the workers and customers. The "Data protection Law" is the law that allows the data of a particular country to not get used outside for any illegal activity (Certo et al. 2016). [Referred to Appendix 2]

2.2 Micro trend environmental analysis

2.2.1 Five forces analysis

"Porter's five forces" is considered to be one of the analytical tools that provide a framework to identify the competitive environment of the company. The section will explain the different factors of five-force for the company "Navel Group Ltd." and it is summarized as below

Competition in the Industry: The biggest competitor of “Navel Group Ltd.” is “Kuehne & Nagel" which is also working in the same sector. The company because of the superior quality of products and services has the highest rate of customer satisfaction in the market. The reputation in the market helps the company to have a stronger relationship with the group of existing suppliers and thus it can be challenging for the "Nagel Group Ltd" to compete in terms of the supplier (Durand et al. 2017). The only thing which can be stronger for "Navel Group Ltd." as a comparison to "Kuehne & Nagel" is the number of critical talent related to the field of IT and digital transformation. Therefore, it can be termed as an advantage for “Nagel Group Ltd.” over other competitors. This factor might be challenging for the company to adapt optimally in the market (Gans and Ryall, 2017).

Potential of new entrants in the industry: There are high chances of entry of new entrants related to the food logistics department into the market of the United Kingdom as a higher demand for the supply chain. However it might not effects the position or reputation of companies like "Nagel Group Ltd" as it is serving the market from 1935 to the different people of Europe and also have a high customer satisfaction rate in the market. Thus the factor can be less challenging for the company in the market (Engert et al. 2016).

Power of suppliers: The Company "Nagel Group Ltd." has the highest geographical coverage related to the food-network all over Europe and for this reason there is a large connection with the suppliers. The company is in logistic solutions for more than 80 years and thus it has developed a better relationship with suppliers resulting in the timely supply of consignments. It has the highest number of deliveries throughout the day as compared to other food logistic business (Galpin, 2019).

Threats of substitute products: There are large substitutes available for the products that are supplied by the "Nagel Group Ltd." in Europe and thus it can be challenging for the company to operate in the market. But as because of a better position in the market and also better quality of product the customer will prefer more the products of this company.

Power of customers: The power of customers is high in the market of Europe as it is having a large number of customers as compared to the suppliers. The company is operating in 16 different countries and thus it is having a maximum number of customers. Thus this factor can have a high impact on the performance of the company in the operating market (embapro.com, 2020).

2.2.2 Industry Life Cycle analysis

"Nagel Group LTD" is in the maturity stage of the industrial life cycle. At this stage of life cycle the management of the company aims to maintain the delivery of services with minimization of cost. The group of customers has been able to understand the services that are offered by the company. This can be understood by customers ordering the large collection of orders and rival companies keep on monitoring the strategies of each other companies.

2.3 Opportunities and threats

Thus from the micro and macro analysis it can be clearly said that the primary threat of the company “Nagel Group LTD” is competitors like “Kuehne & Nagel” and risk of currency. The primary opportunities are the growth in market share and also increase in growth of employment for the company. Thus the company needs to enhance the strategy so that it can have better stability in the market with that of competitors (Jabbar and Hussein, 2017).

2.4 Internal environmental analysis

2.4.1 RBV of Strategy

The performance of the company can be measured using the Resource based view (RBV). It basically focuses on the internal environment of the organization. It is beneficial in the identification of the resource capability that an organization has as comparison to the other in the industry. The Company like "Nagel Group Ltd." has differentiated itself from the other rivals or competitors through the application of superior quality and also an enhancement in productivity. "Nagel Group Ltd." Keep on updating the resources and also optimized the learning by introducing artificial intelligence in the business (Nickols, 2016). The company is capable of utilizing sustainable resources for business like introducing low rolling-resistance tyres in order to reduce the usage of fuel. "Nagel Group Ltd." includes the concept of paperless warehouse management system through barcode for transportation and other processes. Thus there is less utilization of paper-based resources which makes business more flexible and adaptable in the market. The elogistic Portal is introduced in company to track the orders of customer and also for HRM purpose to manage staff. The “SAP in house consultation” is done which makes it more compatible and updated in the business environment. Thus utilization of the list of user-friendly resources makes the company more advanced and optimal for attracting a large number of customers (O’Neill, 2016). [Referred to Appendix 1]

2.4.2 McKinsey’s 7S Framework

The "McKinsey's 7S Framework" is considered to be one of the method that can be helpful in understanding how the entire organization works together. It can be effective in improving the performance of an organization by providing a better implementation path of strategy. The seven different elements of this framework can be listed as below

Strategy: The Company “Nagel Group Ltd” in order to remain competitive in the industry plans to reduce the emission of carbon by 20-25% within 5 years. Thus it will help the company to get better competitive advantage and also the strategy is to achieve the goal of "zero accidents" by 2025. This strategy will be helpful in avoiding the accidents at work and avoids maximum human suffering.

Structure: The organization structure is consisting of “Board of Directors” which includes the name of “Carsten Taucke(CEO)” and Tobias Nagel as Innovation and corporate development officer. There is an IT department who is responsible for testing and also implementation of new technologies in business. There is order picking departments that also interact with the customer. The transportation department consisting of senior transport planner, truck driver, Lorry driver and many other categories of designation. There is a department for training also in which the one who newly joined in an organization are trained (Shujahat et al. 2017).

System: The staff of logistic sector like “Nagel Group Ltd.” deals with storage and supply of good materials to the different parts of the location. The transportation industry supply frozen or dairy products as demanded by group of customers to the accurate location. The packaging and material handling is done once the order is demanded delivery. Now the packaging is done and the material is handed over to the person or driver who is in charge of delivery. The IT department tracks the location of good materials along with that provide information to the customer regarding exact dispatch date for the product. Once the item is received from the customer side the information is updated by the back-office department. The inventory and stock details are also updated by the back-office department and thus with the help of it the suppliers and other clients are informed.

Shared Value: The core values of the organization are to provide flexible and less restricted services to the customers. The company "Nagel Group Ltd" is considering the employees as an asset and they provide facilities like 28 days annual leave and also beneficial pension schemes. The workers are trained with full support and appreciation so that they can develop the skills which will be essential for interacting with the customer.

Style: The employee of "Nagel Group Ltd." works as a team to achieve the goal. The trainer works with full effort to develop the skills within each individual working in the company. The organization considered the employee as the primary asset and thus provides 28 days annual leave so that they can get relief from work. The management is analyzed to be supportive and allows each individual to participate in every part of the business (Trigeorgis and Reuer, 2017).

Staffs: There is various position or specialization in the team of “Nagel Group Ltd” like order picking staff and IT staff for that individual who is specialized in IT background. The Back-office staffs are also there who are responsible for storing and updating all the inventory and customer information within the system (Sundiman, 2018).

Skills: The staff working in the company "Nagel Group Ltd." is having optimal skills like IT workers are more updated with the latest technology like Photovoltaic cells and artificial intelligence. Even the tracking through mobile devices is one of the updated skills that are easily adapted and used by the workers to track the product location easily, The SAP is one of the effective and useful application used by the Back-office staffs to keep a record of inventory and thus the workers work accurately with the skills (nagel-group.com, 2020). [Referred to Appendix 4]

2.4.3 VRIO

The VRIO framework is one of the essential tools that can be helpful to the company in protecting the number of resources and capabilities that can provide a better competitive advantage over the other company in market. The "VRIO" framework for "Nagel Group Ltd." is discussed as below

Value: The Company “Nagel Group Ltd” utilizes a sustainable concept to reduce the number of carbon emissions in the environment protecting the environment. This company also provides better benefits to retain productive and innovative employees. Thus with the help of these employees the accurate services is created and provided to customers through the globe.

Rarity: There is almost the least number of companies who includes sustainable business and also provides lifetime benefits like post-retirement money in terms of pension.

Imitability: The resource that is used by the company for sustainable business and also method to store information about data is usually followed in most of the companies. The SAP implementation is used in many food logistic sector and hence it is easily affordable and also having temporary advantage over competitors.

Organization: The IT staffs of the company “Nagel Group Ltd.” is capable of using the advanced technology and also to track and provide accurate information to customers query. The back-office departments are well trained so that they can be able to manage and store all the information accurately without any errors (clearpointstrategy.com, 2020). [Referred to Appendix 3]

2.4.4 Value Chain Analysis

The “Value-chain analysis is considered to be a type of method that explains different activities, that is performed by the company in order to produce the products or services. It can be useful in improving the competitive advantage of the company using various factors. The Value-chain analysis for the “Nagel Group Ltd.” is discussed as below

Inbound Logistic: “Nagel Group Ltd.” has selected low-cost suppliers for the products. It sources suppliers for different items like dairy products like meat and others.

Operations: The Company has total four “Board of Directors” and many business partners. The company is operating in 130 different locations worldwide with total turnover of 2 billion Euros.

Outbound Logistics: “Nagel Group Ltd.” basically has accurate transportation through which the food consignments as demanded by the customer are delivered within mentioned time slot. The company does the delivery after getting order from the manufacturers and retailers and the products can be of any temperature range.

Marketing and sales: The marketing strategy basically focused through media and print advertising, social media and others. The marketing through direct communication with the client is also done by the company.

Services: “Nagel Group Ltd.” provides optimal services to the customer over the globe with timely delivery without any delay. It also provides in-depth training to more than thousand of employee so that with the help of those skills they can provide best assistance to customers.

Support Activities

Firm Infrastructure: “Nagel Group Ltd” has well-designed and managed departments divided into IT, Management and many others. It consists of group of dedicated number of employees who are skilled and adjustable to the working environment.

Human Resources Management: The staffs or the employees of “Nagel Group Ltd” are motivated throughout the work with attractive benefits offered to them. The company has low rate of turnover which clearly indicates that it has efficient human-resource management. Even there are many programs related to training that are organized so that staff can be skillful and motivated.

Technology Development: “Nagel Group Ltd.” Utilizes advanced technology in the business from tracking the consignments till storing confidential information. The company uses digital medium for the communication with customer that provides better security (newsroom.nagel-group.com, 2020).

2.5 SWOT Analysis

The SWOT analysis of the company “Nagel Group Ltd.” is summarized as below

3.0 Strategic Option

3.1 TOWS Matrix

3.2 Feasibility, Acceptability and suitability

Feasibility: The Company “Nagel Group LTD” is feasible to the market as it has some upgraded resources. The staff and workers also have the optimal capability to increase the productivity of business. They are capable to utilize different IT technology like artificial intelligence, big data in the work.

Acceptability: The Company is having better strategic-flexibility and also having flexible profitability with large number of clients.

Suitability: According to the analysis done using methods like “SWOT” and “PESTLE” the company is capable of addressing the issues that are occurring in the every position of company.

4.0 Proposed Strategy and Implementation Challenges

4.1 Porter’s Generic Strategy

“Nagel Group Ltd” can adopt “Porter’s Generic Strategy” in the business in order to get the optimal position with the superior-return. The company profitability is better but still with the help of this strategy the company can improve the strength within the market. It is basically divided into different group of strategies like “Cost leadership”, “Differentiation” and the “focus strategy”. Through the cost-leadership strategy the company can enhance cost advantages by doing improvement in the efficiencies of process. Thus with the help of this strategic model the company can gain better competitive advantage over the market. Through the differentiation strategy the company can develop the product and services with the list of unique attributes and that will definitely be valued by the customers who think it to be better than competitor’s product (Zhao et al. 2017).

4.2 Application of BCG Matrix

The BCG Matrix can be useful for the company “Nagel Group LTD.” for the long term strategic planning. It will help the business to grow in the market considering some of the factor like where to invest that helps in developing the services. The “BCG Matrix” after applying in the services offered by the “Nagel Group LTD” produces following result

Stars: Technology: “Nagel Group LTD” is well managed and advanced with the technology they are using for the business. The application of artificial intelligence and digital communication makes them more compatible and flexible in working environment. Therefore the technology of the company is responsible for high market growth and shares.

Question Marks: Dairy Products: The dairy products are highly demanded by the client from different location but due to unavailability of data related to quantities and order size the delivery is always declined. Thus this factor is of high market growth and less market shares.

Cash Cows: Sustainable products: Low growth and High market shares

Dogs: Cheese and Fruit Warehouse: Low market growth and Low market share.

4.3 Implementation Challenges

The “Porter Generic strategy” is useful for the product based company but “Nagel Group Ltd” is a service based company and hence it will be difficult to apply this model over here. There might be the chances of lack of attention to the needs as well as preference given to customer as because of excess concern in respect to the minimization of cost. It can also result in creating the unexpected rate of inflation in the cost and that can reduce the ability lies within the company. The challenge of implementing “BCG Matrix” can be that there is problem or difficulties in getting sufficient data on the market-share and market-growth for the company like “Nagel Group LTD”(works.doklad.ru, 2020).

5.0 Conclusion

The strategy that is used in the study has addressed the issues which the company is facing. The proposed strategy like “Porter’s Generic strategy” will be useful to reduce the number of threats by better cost differentiation and it also helps in improving the services of company “Nagel Group LTD” by adding the unique attributes to it. The proposed strategy like “BCG matrix” can be useful in getting the strong and weak area of the company like technology is strongest for “Nagel Group Ltd.” responsible for high market growth and shares. It is been analyzed that the company is having sufficient resources with the help of which they can compete in the market. The primary purpose of the company is to provide better service to customer using advanced technology and the proposed strategy provides effective methods for it.

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