A2 MILK Company Research Report PDF

Preview

Summary

this is a research report needed for enterprise leadership, you are given a list of different companies to choose from and from there you need to research the background (including the ASX listing), 2-3 key issues, which will be allocated per company depending on which chapter, and the challenges fo...

Description

A2 Milk Company Research Report Background on A2 Milk About the business A2 Milk is the leading premium fresh milk brand in Australian supermarkets. The continued growth in both fresh milk and infant formula sales reflects increasing consumer awareness and loyalty driven by consistent brand advertising and growing media coverage of the A2 Milk Company brand.

Nature of Business The A2 Milk Company produces both fresh milk and baby formula as their products to supermarkets within Australia, New Zealand, China, USA and the UK, whist also continually developing their formula and the science behind their products. This means that under the Global Industry Classification Standard (GICS) Sector, Industry Group and Industry, the A2 Milk Company is considered to be a consumer staples, a food, beverage and tobacco industry and a food products.

Financial Situation The A2 Milk Company became public on the 2nd April 2015 where their shares were selling at 0.56 AUD, over the course of that year, they had a steady increase in value until 2016 where they rose to 1.88 AUD, after that they maintained their rise, increasing in value until mid 2017 where it spiked up to 7.67 AUD. After the initial spike the shares value maintained in price until Feb 2018 where it really shot up to 11.73 AUD and has now since stabilised around 9-11 AUD. At the End of Financial Year of (EOFY) 2015, the Net Profit After Tax (NPAT) for the A2 Milk Company was -$1.85M. The EOFY of 2016, the NPAT was at $29.02M and the EOFY 2017, the NPAT was at $86.33M which shows that the A2 Milk Company has been increasing in both profits and shares prices since 2015.

Key Issues for A2 Milk Social Responsibility The A2 Milk Company reflects a socioeconomic view of social responsibility in that it is management's social responsibility to go beyond making profits for just the company and shareholders, that they should be protecting and improving on society's welfare. The A2 Milk Company also reflects the definition of social responsiveness, which is when a company engages in social actions in response to some popular social need.For their social responsibility and social responsiveness, the A2 Milk Company supports the following Australian non-for-profit organisations: The Song Room in which the A2 Milk Company are partners of, Landcare Grants Program in which A2 Milk farmers submit applications for grants and 4 farmers will be awarded funding for programs that help them respond to challenges and enhance the sustainability of their operations, The Children's Book Council of Australia in which the A2 Milk Company are partners with and The Salvation Army,

where the A2 Milk Company donates A2 platinum infant formula. This shows that the A2 Milk Company has some understanding of their social responsibility and that they are not responsible for only their shareholders, they understand that they have a responsibility to their society and that by giving back it creates a supportive and loyal customer base who ends up purchasing and supporting their products. Managerial Ethics Ethics is referred to the principles, values and beliefs that define what is right and wrong behaviour, which can be outlined in a code of ethics for corporations.The A2 Milk Company have a code of ethics, which is a formal statement of an organisations primary values and the ethical rules it expects its employees to follow. The A2 Milk Company's code of ethics is approved by the Board of Directors of the company. A strong company culture can have more influence on employees than a weak culture. If the company culture is strong and supports high ethical standards, it should have a powerful and positive influence on all employee's decisions to act ethically or unethically.

Current Challenges and Opportunities for 2018-2020 As outlined in the annual meeting report of 2017, below are the following challenges and opportunities for the A2 Milk Company: Challenges One challenge faced by the A2 Milk Company is continuing on with the science that continues to develop and adapting it towards bettering their products. This is a challenge as there is always new theories being put out to both prove and disprove the benefits of 'A2' Milk, so by developing their products and staying up to date with theories is something the A2 Milk Company needs to face for 2018-2020. Opportunities One opportunity for the A2 Milk Company over 2018-2020 is to continue building a global branded dairy nutritional business by accelerating new product development and furthering strategic partnerships to help the A2 Milk Company expand into South East Asia to make further market expansion opportunities. This will then help the A2 Milk Company in continuing to build corporate capability, increasing investment in brand, and know-how to ensure leadership in an emerging A1 protein-free category. This is a huge opportunity for the A2 Milk Company as while they already have a global branding, expanding out into different countries will definitely help spread awareness of the A2 protein, raise their shareprices and increase their customer base.

References Asx.com.au. (2018). [online] Available at: https://www.asx.com.au/asx/share-priceresearch/company/A2M [Accessed 1 Aug. 2018]. Datanalysis-morningstar-com-au.ezproxy.uws.edu.au. (2018). WSU Library EzProxy. [online] Available at: https://datanalysis-morningstar-comau.ezproxy.uws.edu.au/ftl/company/profitloss? ASXCode=A2M&rt=A&sy=2015-01-01&ey=2018-12-31&xtm-licensee=datpremium [Accessed 1 Aug. 2018]. Robbins, S, Bergman & Coulter, M 2018, Management 8th edn, Pearson Australia, Melbourne. [Accessed 1 Aug. 2018] The a2 Milk Company. (2018). Our businesses - The a2 Milk Company. [online] Available at: https://thea2milkcompany.com/about-us/our-businesses/ [Accessed 1 Aug. 2018]....