by David E. Bell, Aldo Sesia
Source: Harvard Business School
32 pages. government issue date: Jun 30, 2008. Prod. #: 508079-PDF-ENG
In 2005, COFCO Ltd., one of Chinas largest and most successful companies, acquired Xinjiang Tunhe, a tomato plant processing firm, which had been, in recent years, poorly managed. COFCO changed Tunhes counseling team up and set reveal to create a finishing of professionalism and impressed upon the employees that the customer came first. Qin Yelong, Tunhe president, had ambitious goals for the company. he demanded Tunhe to be the worlds largest supplier of tomato products (primarily paste) within three years. To do so, Tunhe postulate to secure relationships with top-of-the-line international customers, such as H.J. Heinz and Unilever. These companies were interested in Tunhe as a supplier, but needed assurances that the company could result a reliable supply of high quality, competitively priced, and fail-safe tomato paste year in and year out before they would finalize long term contracts with Tunhe. Qin and his management team knew that to be number one, Tunhe would need to take a threesome role in modernizing Chinas current peasant mode of agriculture.
Indeed, Tunhes tomato supply came from 200,000 mainly uneducated farmers, working small parcels of subvert (less than 0.2 hectare on average) with little to no mechanization, scattered across the regions of northwestern United States China. The challenge: How to manage so many farmers (the number was pass judgment to grow to 300,000 if Qins revenue targets were achieved) so as to ensure reproducible tomato quality and safety without dramatically increasing costs. Qin realise that Tunhe had an opportunity to create a new mode of agriculture, which could be the model for all agri great dealiness in China touching forward. On the other(a) hand, a misstep could lead Heinz and other large international companies to look elsewhere for their supply requirements.
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