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Resources and Capabilities of Foster Group

In the contemporary business world, all organizations have to set several targets and pursue them with the adherence to current technology. Foster’s Group emanated from the subsequent purchase of Peter Degrave’s Cascade Brewery Company that was started in 1824. The Company has grown over the years with the changing business opportunities and technological aspects all over the globe. The high revenues and profits, which the Company has been making since its start, have enabled it to develop a competitive advantage in the highly competitive beverage industry. The Foster’s Group has also been keen on developing and maintaining a green environment. It ensures that the environment is as clean as possible through its social responsibility initiatives. The Group has played an instrumental role in dedicating adequate funds to cater for different environmental issues. It has also offered numerous jobs to the communities in which it operates, hence attracting immense support. Minniti, Zacharakis, and Spinelli (2006) assert that in May 2011, the Foster’s Group was split into a separate company referred to as Treasury Wines Estate with the aim of promoting efficiency in the environment of operation.

 

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The Foster’s Group owns both tangible and intangible resources that account for facilitating operations within the company. Intangible resources are those that cannot be seen or counted, while tangible resources can be seen and counted accordingly. The company also has such capabilities as flexibility and effective management.

Tangible Resources. Financial Resources

The Foster’s Group has a wide variety of financial resources due to its large-scale operations. The Company was valued at US$ 10.2 billion in November 2011, when there was a proposal by SABMiller Company (Jenster, Smith, and Mitry 2008). It indicates large financial resources and high values. Additionally, the Foster’s Group earned pre-tax profit of $ 816.7 million. The after-tax profit amounted to $776.6m. It was a high level of more financial resources despite a drop of 8% from the previous year. Shareholders have provided adequate funds for operation despite the rough trading cycles that the company is experiencing. The company’s profits are dropping, and this necessitated its split into another company referred to as Treasury Wines Estate. This division would be vital in ensuring that effective management of financial resources is achieved.

After Tax Earnings for Foster Group for 3 Years

Year Profits
2009 $741.5m
2010 $797.2m
2011 $776.6m

Technological Resources

Technology is vital for advanced operations within the company. The adherence to technology ensures that there is a high level of success and the development of a competitive advantage within the industry. Foster’s Group high level of technology has enabled it manufacture beer that is appreciated all over the market. High levels of technology have enabled the company to advance its brands at every instance in order to match the existing demands. For instance, the Carlton United Group, which is Foster’s beer division, has announced that it would concentrate on the manufacture of craft beer with the high level of existing technology. It would facilitate the consumption of beer all over Australia and other areas. Technology has made sure that the company survives the stiff competition that it faces from other established companies in the beverage industry. Technologies have enabled the company to set a high standard in the market and achieve these standards effectively.

Intangible Resources. Human Resources

The company has a large employee base that performs different functions for the achievement of the company’s objectives. Ausmus (2008) affirms that Foster’s Group had an estimated 2239 number of employees at the end of 2011. It means that it has hired more employees to continue supporting its operations in different departments. The employees at Foster’s Groups are a unique and vital resource. They work with a high level of expertise and dedication in order to promote the image of the company. Additionally, the company has a group of dedicated suppliers who bring in their supplies in the appropriate time. It facilitates effective performance within the company. Cooperation and organization of human resources ensures that all operations and targets are achieved in time.

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Goodwill

Goodwill refers to the good reputation that the company has generated over the life of its operations. Foster’s Group has created good reputation through its concern and involvement in social responsibility. It has concentrated on the maintenance of a green environment that would ensure that it achieves its objectives. The company has created a positive impression by dedicating large amounts of its financial resources to the preservation of the environment. Moreover, it has a created a strong brand loyalty in the market, which ensures that it, competes favorably in the market. According to Blocker, Fahey, and Tyrrell (2003), the valuation of the Company in 2011 was boosted by its goodwill in the industry. The company continues to forge forward in the advancement of its goodwill as it continues diversifying its operations.

Capabilities

Capabilities refer to the capacity of the firm to integrate its various resources in order to achieve the goals that are set within the organization. It is vital to note that capabilities develop over the years of operation of the business and are based on complex relationships within the organization. The harmonization of different departments within the organization and the development of an effective communication system ensure that there is an effective collaboration and achievement of the set objectives. Effective communication channels ensure that cooperation is achieved in the various units of the organization, hence leading to the performance of the set activities with ease and perfection. Employees always play a vital role in the development of capabilities within the organization. Cappelli (1999) confirms that the harmonization of all the skills, knowledge, and the expertise of employees is central in the development of capacities within the organization. Capabilities would be vital within the organization in cases where they neither too easy to copy nor too complex to understand. Dagwell (2003) asserts that capabilities should be issues that individuals can understand easily and relate with at the organization. They should be easy to understand, as this would be instrumental in promoting operations within the organization. Capabilities must always be aimed at achieving the goals of the organization in the most economical manner possible.

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The Foster’s Group has several capabilities such as flexibility in its organizational performance. The company is not rigid in its operations and it can integrate different parts in order to achieve its objectives (Hitt, Ireland, and Hoskisson 2010).The flexibility of the company can be determined from its recent split, hence promoting effectiveness in the performance of activities. The company has also continued collaborating with the government and other demand of trade unions such as taking proper care of employees. High brand recognition and advertising serve as significant capabilities within the company as it markets its commodities. The other capacity within the company is a flexible management that is proactive. The management exhibits a high level of skills and expertise in the performance of the activities of the organization. It has been instrumental for the achievement of different objectives within the organization. Moreover, the company produces high quality products, which have a wide market in Australia. It has ensured that there is success within the organization. These capacities are the ones that have boosted the profitability of the company over the years. It continues to achieve most of its goals without strain. The table below gives a clear illustration of these capabilities within the organization.

Capabilities of Foster’s Group

Functional Area Capability Resources
Organization Flexible Operations

High level of technology

Employees dedication

Positive attitudes towards change

Setting of higher targets

Manufacturing High Quality Products

High level technology

Innovations

High-skilled labor

 

 

Exclusive Positioning

 


Effective Customer Service

 

Management Skills

Management Proactive and innovative behavior

Quality decision-making

Effective planning

Exhibition of high-quality skills

Organizational coordination and collaboration

 Strategy

The key strategy that has enabled Foster’s Group take leadership in the beverage industry is the adherence to social responsibility. Social responsibility refers to the obligation of the business to develop the environment in which it operates. According to the Information Resources Management Association; Information Resources Management Association Staff (2010), Foster’s Group has acquired leadership in the industry by offering employment opportunities to individuals in the community in which it operates. It is significant to note that the community would be able to support the company more as it offers the employment opportunities. Individuals have been able to purchase the products produced by the company due to its kindness to the community. The strategy of concentrating on social responsibility has also seen the company advance the environment. The company has dedicated most of its financial resources to environmental preservation, hence ensuring that a greener environment is achieved. The support of environmental preservation has enabled the company to achieve leadership through the support it receives from the government, other organizations, and the community. The strategy to concentrate on social responsibility has boosted the company’s image in the eyes of the community, which forms the largest consumer group of the beverage products. It has also enabled the company to advertise its commodities easily in the market and make enormous sales that boost its image in the market.

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Social Responsibility

Several individuals have played an instrumental role in promoting the success of social responsibility. Corporate leaders are involved in the formulation of decisions relating to social responsibility. They have played an instrumental role in promoting social responsibility by making decisions that favor the spirit of social responsibility. Regulators are involved in the setting of different rules and regulations that promote organizational operations. They have provided a conducive environment for social responsibility within society. They play a vital role in monitoring the implementation of different social responsibility projects. It is effective in the promotion of quality work in society. Shareholders are the owners of the company. They ensure that the company has adequate funds that would facilitate its operations in society. Notably, shareholders have effectively promoted social responsibility by availing funds for social responsibility projects. Williamson (2008) asserts that these funds have been dedicated to the achievement of the goals of social responsibility. Other stakeholders have facilitated social responsibility by supporting these projects effectively. It has ensured success in the achievement of the goals of social responsibility.

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Conclusion

The contemporary business world necessitates all organizations to set several targets and pursue them with the adherence to current technology. Foster’s Group emanated from the subsequent purchase of Peter Degrave’s Cascade Brewery Company that was started in 1824 (Rama 2004). The company has continued to expand despite the fact that its profitability is declining over the years. Foster’s Group has concentrated on social responsibility and this has played an instrumental role positioning is as a leader in the beverage industry. It has achieved most of its profitability goals by concentrating on the development of the community in which it operates. The Foster’s Group has also been keen on developing and maintaining a green environment. It ensures that the environment is as clean as possible through its social responsibility initiatives. The Group has played an instrumental role in dedicating adequate funds to cater for different environmental issues. It has also offered numerous jobs to the communities in which it operates, hence attracting immense support. In May 2011, the Foster’s Group was split into a separate company referred to as Treasury Wines Estate with the aim of promoting efficiency in the environment of operation. The company continues to pursue its goals from different angles as a subsidiary of SABMiller. The company has continued marketing its beverages intensively in order to achieve its goals in the fast-changing business environment.

 

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