Agrana Case Study

For the sake of the threat of potential entry, the meaningful entering of the other multinational firms could also be a concern for AGRANA enterprise since they produce very common two food categories which are sugar and starch. It may be seen as common capabilities without competitive advantages. On the contrary, the formation of new fruit sector provide a unique portal with accumulated knowledge with refinement procedure, which add much more values and competitive advantages upon the multinational markets. To add this, the movement into biofuel segment also bring the AGRANA into a further level of food industry, which is similar to the movement of fruit sector.

Porter asserted that industry-based view could explain that the conditions and environment of a firm decide the operations and strategies they implement (as cited in Peng, Wang and Jiang, 2008). Within this case, the five forces model can be explore to analyze the firm strategy of AGRANA via rivalry among competitors, threat of potential entry as well as the bargaining power of suppliers.

From the point of rivalry among competitors, as presented in the case, the timing of the arrivals of the CEE countries and the other European markets was indeed fortunate. In another words, those multinational enterprises came as potential investment affect the Western European market in a positive way. This entering and multinational integration encouraged the CEE countries formed a great platform for AGRANA and allowed AGRANA company to cope with its foreign direct investment throughout the CEE countries. The approach of foreign direct investment is essential method to boost the economic scale and enhance the competitive advantages within the increasingly stiff environment.