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Case study of Viola

 

Identify the problem

Valio faced few problems. They had lot of stakeholders and they were a matured business that did not face much competition. There were 17 dairies and the company was founded in 1908.

They were bloated with people, after they started change in the organization, we see that they had to downsize. That shows, the company had more people that it needed. It also shows that the company was not efficient.

They were not innovating either. As we see, they started R&D only after they decided to undergo the change.

They were not innovating either. As we see, they started R&D only after they decided to undergo the change.

One external challenge they faced, and I believe this forced them to change, was Finland was joining EU, and that meant the Finland market was being opened to EU members.

Diagnose the cause(s)

Valio was established in 1908 with 17 dairies, they were manufacturing butter, cheese etc. Being a 80 years old organizations, they got used to doing things in certain ways. Change must had been difficult. When they entered into the period of change, they had to downsize and they had to invest in research and development. Because of the number of stakeholders, the organization was bloated. They had more employees than they actually required and they did not invest enough in research and development. Basically the organization was uncompetitive. The products costed more, so they did not have low cost advantage either.

For Valio the causes were both internal and external. The company was old and inefficient with the processes and people. The company had cost disadvantage too. And they did not have any research and development section, so they did not try to innovate. When Finland joined EU, they market was open to other EU companies. And that made Valio vulnerable. Finland joining EU was not something Valio had control over. This was external factor.

Prescribe possible alternatives

Valio decided to cut cost, downsize their employee strength, shut down plants. After gaining access to external market, they started looking for opportunities outside.

Viola should have searched for opportunity within Finland too. They could invest in Research and Development and come up with new products, such as low fat or sugar free products. They could come up with value added products too. Such as milkshake or snack able cheese platter etc.

Externally, they should scout EU markets for new opportunities. Whichever market has some product gap, Viola can produce that product to fill the gap.

They can tie up with café or restaurants to be exclusive suppliers too, and this can be done both in Finland and in any other county.

 

Recommend a plan of action

I think they are right to close plants, and look for opportunities outside in the EU markets, The accession of Finland in the EU in 1995 found Valio in the middle of a substantial reorganization project that eventually changed its business model (Lamprinakis, 2012). They should look for opportunities in other markets in EU, like if they can introduce any new product or introduce lower cost and better quality.

 

 Even though organizational change has been extensively studied, the published estimates show that success rates can be as low as 10% (Beer and Nohria, 2

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