Bee Maid Honey Alternative #1: One Alternative

Bee Maid Honey

Alternative #1:

One alternative Bee Maid Honey may consider, in order to remain competitive in an increasingly competitive industry, is to invite beekeepers in other regions to join their co-operative. Currently, Bee Maid Honey is comprised of beekeepers only in western Canada. The primary advantage to this strategy would be the increased economies of scale Bee Maid could acquire, especially given the strong growth in exports to the United States, across all provinces. This could give the company the scale needed to truly compete on price point with McCormick's acquisition of Billy Bee. However, there would be disadvantages with which the organization would need to contend.

Logistics would be a significant challenge for a geographically expanding Bee Maid. Processing and packaging plants would likely need to be located in both central and eastern Canada. Additionally, one of Bee Maid's founding principles was to provide consistently high quality honey. Ensuring this quality remained a constant, with the addition of new members, would require additional vigilance.

Alternative #2:

A second alternative for Bee Maid Honey would be to seek a multi-national corporation to by the co-operative out. Acquisition by an organization such as international food powerhouse, Associated British Foods, could give Bee Maid the financial, technological, and marketing resources needed to compete directly with Billy Bee. As the honey industry is a mature market, with little product innovation, consumers are more price sensitive when comparing brand-to-brand. The primary disadvantage to this strategy, however, lies in the loss of control for Bee Maid.

Although the organization has grown substantially over the years, the small, private beekeeper pride still shows through in their product and way of doing business. To be purchased by a large corporation, such as Associated British Foods, Bee Maid will simply become just one more division. Focus will be on maximizing revenues and profits, which may lead to a dramatic change in organizational culture, and ultimately product.

Alternative #3:

Instead of looking at expansion solely in Canada and the United States, Bee Maid may consider expanding their exportation to the European Union. The primary advantage to this alternative is the large market the EU offers. The EU is the largest importer of honey in the world ("Honey production," 2003). However, there are disadvantages to this strategy as well.

First and foremost, Bee Maid Honey would need to ensure they are meeting the strict EU guidelines for honey manufactured for human consumption. Additionally, Bee Maid would be competing with well-established brands that have already entered this geographic market. Lastly, marketing and distribution costs would be a significant financial investment for the organization.

Alternative #4:

A final alternative Bee Maid may consider is to not look to become the biggest, but instead focus on being the best honey manufacturer in the world. As mentioned, the honey industry is a mature market. Product differentiation through innovation is rare, and when it does occur and is successful, it can be easily copied by competitors. For this reason, price point is often a primary means of product differentiation. However, the advantage to this alternative allows Bee Maid to remain true to their founding vision of producing high quality honey, charge a premium price for their product, and compete as a specialty or luxury brand, for sales direct to the consumer, that can't be met with the profit driven large manufacturers like Billy Bee. There is one significant disadvantage to this straetgy.

Currently western nations, including Canada and the United States, have encountered economic challenges. Should economic challenges continue, consumers may become more price sensitive, turning to cheaper alternatives in order to meet tightening household budgets. This could hurt specialty, premium honey sales.

Recommendation and Contingency:

It is recommended that Bee Maid pursue the alternative to develop their product and brand as a specialty, luxury honey. Focusing on quality is core to the organization's founding principles and would be inline with their current culture. In addition, consumers have already demonstrated a willingness to pay a premium for honey. The price inelasticity of the market, with demand remaining reasonably constant despite increasing prices, is proof of this. Additionally, this will allow Bee Maid to compete in a niche market that manufacturers like Billy Bee, that are owned by international corporations interested primarily in the bottom line, simply can't compete.

As mentioned, the primary risk in this strategy is the possibility that premium honey sales could fall if economic challenges continue in Bee Maid's primary markets of Canada and the United States. Although honey is price inelastic generally, as families face growing economic troubles, when comparing brand-to-brand, price may be a determining factor. As a contingency to this possible threat, it is further recommended that Bee Maid develop a secondary line of honey. This secondary product line would be a medium quality honey, comparable with the mass produced honeys of Billy Bee, at a similar price point. In this way, Bee Maid can service both consumers willing and able to spend a premium amount on the world's finest honey, while also offering products that more budget conscious consumers can afford, but still is a quality honey product.