Van Heerden Foods' strategic decision to acquire JF Foods

Van Heerden Foods is one of the largest food producers in South Africa whose greatest business strengths were powerful brands and loyal customers. The company has a strong track record as an innovator and a well-funded R&D budget. However, the food manufacturer has some weaknesses like the recent loss of top management talent to its rivals and a cultural resistance to change that reduced response to market forces. In addition some key threats have been developing for several years including the success and increased market share of less costly, private-label brands. Secondly, the South African market has been a key target for various overseas manufacturers who are using aggressive marketing strategies. Moreover, local rivals have been quick to respond to the increasing consumer demands for less fattening and healthier food choices. The firm's new Chief Executive Officer has been evaluating the business by looking at these dynamics in order to make the most appropriate, though unpopular decision that would get the company back on track.

Decision-making Process Taken by Don Stransky and Van Heerden:

After analysis of the strengths, weaknesses, opportunities, and threats of Van Heerden Foods, the CEO had to examine whether to exploit an opportunity to acquire a smaller rival, JF Foods. This competitor is renowned for its ability to produce quality ready-to-eat, comfort foods and snack foods. JF Foods not only has a considerable portion in the private label market but produces foods that target the growing sector of the market. Through acquisition of JF Foods, Van Heerden could obtain their core competencies for innovation. Stransky is renowned for successfully spotting new market opportunities by acting on instinct, which paid off handsomely.

Don Stransky and Van Heerden Foods completed several steps in the decision-making process to decide on whether to acquire JF Foods as part of attempts to transform the company into a highly-flexible, customer focused company. The first step of the decision-making process completed by the CEO and Van Heerden is identifying or clarifying the decision to be made. In this case, a decision had to be made on how to get the company back on track in light of the difficult challenges it had experienced in recent years. Following a comprehensive analysis, the CEO identified the decision to be made i.e. The best strategy towards transforming the firm into a highly-flexible, customer focused company. Secondly, relevant information was gathered in attempts to identify the most appropriate decision. This is an important step because many decisions usually require gathering relevant information ("Decision-making Process," n.d.). This process was completed through examining the strengths, weaknesses, opportunities, and threats of Van Heerden Foods.

Third, the alternatives were identified including considerations on whether to acquire JF Foods or continue with aggressive pricing to increase market share. Fourth, Don Stransky weighed the evidence by listening to contributions from senior managers such as Jennifer Le Roux, the services division head, and Sam Botha, the Chief Financial Officer. However, the Chief Executive Officer and Van Heerden Foods did not complete other steps in the decision-making process. They did not choose from the alternatives, did not take action, and did not review or evaluate their decision. Therefore, Don Stransky and Van Heerden's decision making process was incomplete and ineffective.

Decision-making Styles:

Even though the decision-making process by the company was incomplete and ineffective, Don Stransky and Sam Botha used different decision-making styles. Generally, there are different decision-making styles because people use different approaches in making decisions. The two major dimensions that people use in decision making are individual's way of thinking and individual's tolerance for ambiguity. An individual's way of thinking involves rational and logical processing of information while an individual's tolerance for ambiguity involves ways for lessening ambiguity (Robbins et. al., 2006). The best decision-making style that describes Stransky approach is behavioral style, which involves being open to suggestions from others and concern about the achievement of a team. This style best described Stransky approach because he was open to ideas and suggestions from other senior managers. On the contrary, Botha's decision-making approach is analytic style, which involves being well informed and thorough evaluation of options. Botha demonstrated this by providing information and deep insights on why the acquisition of JF Foods was not the best starting point.

Recommendation for Van Heerden Foods:

Van Heerden's attempt to acquire JF Foods is not the most appropriate strategy or a good place to start. This is primarily because of the hard-to-dismiss information provided by the Chief Financial Officer against the acquisition initiative. The inappropriateness of the acquisition attempt is shown in the fact that many competitors were adopting such strategies and customers contentment with current products. Therefore, I recommend that Van Heerden Foods adopt an effective pricing strategy since customers are buying on price in the current economic climate.