Posted: March 13th, 2025

Parmalat Dairy Company: SWOT ANALYSIS

SWOT ANALYSIS

Strengths

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Right from its formation, Parmalat has continued to experience fast growth and expansion through acquisitions and brand development. The company has an extensive market of its products across the world and also a strong market in Australia. Its large scale operations mean that the company has enough resource to launch its products to new markets such as China. Its high level of innovations is important for the production of high quality products. Additionally, Parmalat has a highly trained and competent workforce that helps to achieve its objectives.

Weakness               

            Although Parmalat has highly experienced workforce, it has been accused of violating some labor laws. Parmalat has not fully embraced an effective talent management strategy for promoting good relations with its workforce. In July, Parmalat locked out its dairy workers over pay disputes and unfavorable work conditions. The other weakness that the company has is to adjust its operations with the tax structure of the land to avoid clashing with the authority. The organization will also have to address the issues facing its employees and farmers in order to foster a strong relationship with its stakeholders.

Opportunities

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The signing of the Free Trade Agreement between China and Australia presents a good opportunity for Parmalat to expand its operations in China. FTA agreement means that the industries from Australia will have an easy access China; one of the largest emerging markets in the world. The trade agreement gives dairy companies to export dairy products to China without tariffs, which means the companies will experience an increase in return on investment. The other opportunity that Parmalat has is the ease with which it will be able to establish new subsidiaries where it can be manufacturing its dairy products. Establishing a manufacturing plant in China can present a good opportunity for Parmalat to enjoy relatively cheaper wages and low cost raw materials. Cheap labors combined with low cost materials that can significantly help the organization to lower its cost of production (EduTV & TVNews 2016).

Threats

One of the major threats to Parmalat is the rising cost of labor. The signing of the Free-trade agreement will open both opportunities and new cost of production. With increased demand due to new markets, Parmalat will also have to increase investment on human capital. As new measures are being implemented to standardize labor compensation across the world, it can pose a great challenge for most of the companies that target Asia as their preferred region for their production. The other threat of the dairy company is the increase in competition. The free trade agreement will also make other companies to increase their level of competition in order to win a bigger market share in China.

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