Tate & Lyle plc

Question 1

International business is an area of continuing research because the benefits to be gained and the problems that can arise from internationalization of business operations are well balanced (cited in Hill , 2005 . On the one hand there is the possibility of greater market share as an organization reaches out to a greater number of customers On the other hand , there is the problem of determining as to what is the best mix of standardization and customization . This problem however is mitigated when it comes to the food additive industry as

seen in this case study

In the food additive industry , consumer tastes and preferences do not vary that much from one geographical region to another . According to the case , there are some differences which make starch products more popular in the West than sweeteners . However Tate Lyle carries both product lines and therefore stands to gain from its strategy of diversification into different product lines . In spite of this difference in terms of the penetration rates of starch and sweeteners , the problem is clearly not how much to standardize sweeteners sold in different countries or how much to customize them to the different cultural characteristics of different countries . As stated in the case , customers of food additive manufacturing companies like Tate Lyle are food and soft drinks manufacturers and these customers use the same additives in their products no matter in which country of the world they are marketing their products . Therefore companies like Tate Lyle have the luxury of standardizing their products across geographical regions . This is a luxury inasmuch as costs of production and marketing are kept low as a result of standardization . However standardization has a downside in that the products tend to be low-margin as seen in the case

In an intensely competitive environment , the management of a business organization has three tools at its disposal : differentiation , cost leadership and quick response (Griffin and Pustay , 2007 . Companies differentiate their product lines in to develop a unique selling proposition . Companies reengineer their business processes in to make them more efficient and effective so that they consume less resource and as a result cost less . This drives down costs of production . Companies also experiment with different processes in to reduce the time taken by their products to reach the market . A business organization can practice one of these strategies at a time or the organization can practice all three strategies simultaneously . In this case study we see Tate Lyle practicing both differentiation and cost minimization . First , it is moving into other product lines which have higher value added . This diversification is targeted towards taking the company into high-margin product categories

Second , it is building new plants and consolidating existing operations in to reduce operational costs . Therefore the company is competing not only on the basis of product variety but also on the basis of price However the strategy of differentiation has been found to be of little success in the past because...