Uk Frozen Food Industry

Seminar Preparation Assignment

Question 1.

[typed text]

Birds Eye developed as a vertically integrated producer because of the quality of product, gaining market leadership in raw materials supplies.

The frozen food industry at that time was considered new and was undeveloped for producing, storing, distributing and retailing frozen foods. Thus, Birds Eye was forced to build its own system that makes it a vertically integrated producer to support the firm, but will have to require high capital which created barrier to new entrants. Birds Eye’s competitor Findus and Ross followed the similar strategies to what Birds Eye did, causing them to have a constraint in advertising expenditures.

Next, fresh food has to be quickly frozen because the quick freezing process will ensure the freshness and quality of the food. Therefore, Birds Eye had processing plants located near places where these raw materials were originally produced or caught.

Birds Eye had also backward integrated by entering the broiler chicken industry that built over 20 farms to secure a regular supply of its raw materials. In this way, Birds Eyes do not have to depend on the suppliers for raw materials and could cut transaction costs. For vegetables, Birds Eye supplied the farmers with machines under long-term contracts and also exercised close control over the crops by providing the farmers with professional people to ensure quality products produced. The reason Birds Eye having to vertically integrate in fishing is probably due to the initially stage where Birds Eye either bought fresh fish from dockside auctions or import from Scandinavian in frozen blocks of fillets where they have no control over its suppliers. Therefore by acquiring a majority of stake in a fishing company, Birds Eye could have a regular supply of cod and also much better control over its supplies.

In-Class Learnings

Question 1.

[handwritten notes]

Seminar Preparation Asst. Question 2

[typed text]

Birds Eye...