INTRODUCTION.........................................................................................................................1
1.1 HISTORY OF MCCAIN FOOD...........................................................................................................2
1.2 NATURE OF BUSINESS....................................................................................................................2
2.0 THE ENVIRONMENTAL FORCES.............................................................................3
2.1 THE INTERNAL FORCES........................................................................................3
2.1.1 STATEMENT OF PURPOSE.............................................................................................................3
2.1.2 ORGANISATION STRUCTURE.........................................................................................................4
2.1.3 MANAGEMENT OF MCCAIN FOOD................................................................................................6
2.2 THE EXTERNAL FORCES........................................................................................7
2.2.1 POLITICAL ENVIRONMENT............................................................................................................7
2.2.2 LEGAL ENVIRONMENT................................................................................................................8
2.2.3 SOCIO-CULTURE ENVIRONMENT....................................................................................................9
2.2.4 ECONOMICAL ENVIRONMENT......................................................................................................10
2.2.5 TECHNOLOGICAL ENVIRONMENT.................................................................................................11
2.2.6 ECOLOGICAL ENVIRONMENT......................................................................................................12
3.0 CONCLUSION................................................................................................................13
4.0 APPENDIX......................................................................................................................14
5.0 REFERENCE..................................................................................................................16
1.1 INTRODUCTION
McCain Food Company is a multinational company that supplies its products such as; Frozen
Chips and vegetables, juices, pizzas, entrees and desserts to 110 counties on six continents. It is
in fact, the number the world’s largest producer of frozen chips (French Fries). In the industry of
frozen foods, McCain is a clear leader selling around 45% of frozen potatoes in the UK alone.
Introduction To Business Group Assignment
A business ability to achieve success depends on two main groups of factors; the first being the
internal strength of the organisation and the second is the ability to identify and act accordingly
to the external influences in the business environment. This document will highlight all the
business environments and their effect towards McCain Food Company.
McCain Food is built on the cutting edge agronomy1, superior technology and a global
workforce to enable the brand to deliver both variety and quality and live up to their slogan;
Good Food, Better Life.
Agronomy – The application of soil and plant sciences to land management and crop
1
production.
(Robert, Andrew, Harrison and Wallace McCain) in their hometown of Florenceville, New
Brunswick in Canada.
In the early 1900s, Andrew McCain saw an opportunity to expand beyond faming and selling
potatoes locally and together with his brothers, the company was developed and established and
has a total of 57 factories worldwide.
The key dates that mark their accomplishments are illustrated in the appendix (Table 1) on page
14.
Allison McCain is the chairman and Dale Morrison is the President and CEO of the company.
McCain Food has 20,000 employees in total to make up for its human resources and enjoys total
revenue of around $6.2 billion as of 2008. It is basically the world’s largest frozen food
company that operates on a global level.
organisation.
1. To maintain a constant supply of raw materials (Potatoes, Flour and spices) to match the
demands of the customer throughout the year.
2. To instill a consistent code of conduct to all the employees as their values and moral
compass in dealing with customers.
3. To retain competitive advantage3 by producing diverse number of products with unique
characteristics like shapes, sizes, ingredients and different seasonings; thus keeping the
current customers and add new ones.
4. Implementing the power system by switching to a more saving and environmental-
friendly energy sources such as the wind turbine system and the wastewater system.
3
Competitive Advantage – A position occupied by a company against other competing
companies by possessing an advantage over them.
4
Span of Control – The total number of subordinates under a sole superior.
5
Hierarchical levels – The levels of authority from top management to the employees at the base
of the organisation chart.
6
Chain of command – The action of an employee to report to just one superior.
7
Departmentalization – The breakdown of jobs by their task and common characteristics and
grouping them in departments or segments.
8
Specification of Job – Defining the job by its tasks, responsibility and relevant requirements of
performing it.
This department is responsible for acquiring, deploying and developing the employees to
enhance effectiveness by giving priority to the human capital (employees). It is also responsible
for providing motivation and performance appraisals to reduce the staff turnover9.
Please refer to the Organisation chart (departments) in the Appendix (Figure 1) on page 14.
2.2 THE EXTERNAL FORCES
The external forces are the attribute of the business environment that cannot be controlled by
any organisation. They are referred to as external forces because they are influence is exerted
outside the business organisation including; Political, Legal, Economical, Socio-Culture,
Technological, Competitive and Ecological Environments.
These External Forces poses different influences that result into different effect towards the
Business organisation respectively. The success of any business depends how best they analyse
each environment and make necessary amendments accordingly in order to use and/or counter
act the effects of their influence. McCain Food, like any other Organisation, is affected by these
business environments, thus affecting their business operations and activities.
9
Staff turnover – The rate at which employees leave the company compared to how many
employees are recruited.
actions, McCain Food was forced to re-strategies on ways to reduce the fat content in their
products.
In addition, McCain products comply with a range of laws, including;
1. The Food Safety Act, covering the way the food is prepared and served.
2. The Trades Description Act, which states that goods and services must be exactly as
described.
3. The Weight and Measure Act, governing such aspects as giving the right weight on
packs.
This environment affects the decision making of McCain in a way that, all their business
activities (Marketing, advertising, operational activities, promotions, packaging) must abide to
the rules and regulation enforced by the government. The government itself as an influential
body has the power and right to support or restrict the business activities, by means of tax
imposed on the products, the company and its shareholders10, so as to protect their interests and
specifications throughout the entire nation.
Shareholders – An individual who is registered in the stock exchange and owns share(s) of
10
stock in a company.
McCain Food is a trademark11 therefore products posses a copyright12 that ensures a protection
from other competitors to produce the same products. McCain Food has the right to sue anyone
who violates the copyright, thus maintain originality among the market.
In UK, the government has several agencies that are concerned with maintaining a standard to
the legal factors in need of achieving. The government’s Food Standards Agency has
recommended that firms put ‘traffic light’ labels to help people understand what they are buying
and make choices about their food intake.
– Red represents High level of Ingredients (Fats and Salts).
– Green represents a low level of Ingredients.
Advertising of products is supervised by a voluntary body, Advertising Standards Authority
(ASA), within the advertising industry. McCain makes sure that all its advertising sticks within
the requirements of ASA, which is all advertisements, must be Legal, Decent, Honest and
Truthful.
2.2.3 SOCIO-CULTURE ENVIRONMENT
Socio-Culture environment is another force that posses a potential effect to the business. This
environment, in an overwhelming way, dictates the outcome of McCain Food’s success. It refers
to customer behavior and factors that affect customer behavior. Among the environment’s
components are; culture, religion, race and nationality, behaviors and personalities patterns,
beliefs, characters and preference.
Customer buying patterns are determined by trends. Just as the demand for some popular clothes
are determined by fashion, demand for food is likewise determined by eating patterns. Due to
such patterns, McCain takes a close note on their customers’ biggest concern (Obesity13 issues
and response to junk foods14) and execute relevant actions to minimize such concerns so as to
maintain their customers.
Currently in the UK, potatoes are largely consumed as chips. As people become more time
conscious, they prefer to consume ready meals that can be prepared quickly by heating in an
oven or microwave as an outcome of being too busy in their respective work environments. This
in tells that McCain, as the largest supplier of chips, must ensure a diversity among their
products therefore producing them in different varieties of shapes, sizes, fat and salt content,
other seasoning ingredients and packaging to suit the different customers in the market. McCain
will continually develop their products in a way to satisfy their Market Share15 around the
world because of the close relationship it maintains with their customers.
Decision making of the company is greatly affected by this environment and yet it serves as an
influential factor that determines the demand of customers for McCain Food Company. Nothing
14
Junk food – Are the Foods that tastes good and are more convenient and easy to obtain in a
ready-to-eat form but having high calorie content with little or nil nutritional value.
Market Share – The percentage or proportion of the total available market or market segment
15
17
Economic System – Is a system that defines the involvement of production, distribution and
consumption of goods and services and it includes; Capitalist, Socialist and Mixed economic
systems.
18
Production cost – The fixed cost that is incurred in producing a specific product in the
company.
19
Shell life – Life span of a certain product (Measure of how long a product can last before
expiring).
Total cost – The addition cost of the fixed and variable cost that the company has incurred in
20
21
Ethical – Of relating to the principles of right and wrong that are accepted by an individual or a
social group.
22
Carbon Footprint – The quantity of Carbon dioxide created by individuals, businesses or
countries as a result of their activities.
30 CONCLUSION
Change in the business environment is an inevitable factor since it has a vast number of sources.
Businesses of today including McCain Food must keep up with the change, become flexible and
dynamic, so as to anticipate the consumers’ demands henceforth decide on effective strategies and plans.
As seen from the previous chapters, different environments posses a different threat and opportunity
respectively to McCain Food and it is for a fact that decision making and way of operation in the
company is greatly affected by these business environments.
Consumers are increasingly becoming aware of food content and food issues to achieve a healthier
lifestyle and therefore the challenge for McCain has been, and will continue to be, to prepare their
products in the healthiest way possible; as far change is concerned, McCain has market researchers and
technologists who enable the company to keep in tune with the changing business environment.
40 APPENDIX
YEAR DECRIPTION
1956 McCain Food is incorporated (Changes its business ownership).
1965 McCain enters the British market.
1968 Company begins Marketing in Australia.
1969 Company opens U.K facility in Scarborough.
1971 Company enters U.S Market.
1976 McCain purchases Ore-Ida Food Service business (Business takeover).
2000 McCain Foods builds $7.2 million Potato processing technology center.
2002 McCain acquires Wong Wing Foods (Business acquisition).
2005 McCain builds a $18 million processing plant in India (Business expansion).
2008 McCain builds a $65 million plant in Florenceville, Canada.
TABLE 1: KEY EVENTS
50 REFERENCES
‘Principles of by Lawrence by C.W Hill & S.L McShane, 2008 Edition, pg. 38-44,
Information on Environment, Book
‘Business Essentials’ by Ronald J.E & Ricky W.G, 5th Edition, Information On business
environments, Book
Information on McCain Food Company, Accessed May 16th,2009 from
http://www.mccain.com, Web
More Information on McCain Food Company, Accessed May 16th,2009 from
http://www.answers.com/topic/mccain-foods-limited, Web
Case study of McCain Food Company, Accessed May 18th,2009 from
http://www.thetimes100.co.uk/case-study--how-mccain-responds-to-changes-external-
environment--101-272-1.php, Web