Bill Johnson, the CEO of Heinz Company, reveals the peculiarities of work of his company in the Asia/Pacific region, specifically in the countries with emerging economies. He uses his personal experience of visiting China as an example of cultural differences in its cuisine and other related aspects of food consumption. China, India, Russia and Indonesia are pointed out as the countries where further investments of Heinz and other companies should be concentrated.
According to Johnson, he was the person who started the Three A’s strategy once after he was made Heinz CEO. First A stands for “applicability”, and shows that any company product, manufactured in certain country, should be compatible with the preferences of the local people. A really good example of this principle can be found in the Philippines where ketchup is produced in the non-traditional way for the Westerners, using bananas instead of tomatoes. “Availability” is the second A in the formula, and it reflects the economic flows of goods from the manufacturer to the end consumer. Most people in the emerging countries purchase food at the local retail stores or open-air markets, not in the specialized grocery stores. “Affordability” completes the Three A’s strategy, pointing out that the interests of the consumers in the countries with emerging economies have to be reconsidered, as well as the level of their income. Heinz Company adjusts to the needs of every market, displaying its own flexibility and increasing the share of people who can afford purchasing their goods. Johnson’s personal contribution to the project resulted in “affinity”, or the fourth A. It stands for the maximal involvement of local people in running the company and foresees using of the US managers or coaches during the initial phase of the project or during any upgrades or adjustments.
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Johnson states that Heinz always does a proper research of the market, checks on the government influences on economy, and evaluates the possibility of future growth. All the risks are also weighed and considered, and risky projects are closely analyzed prior to turning them down, as risks may be ignored if long-term success is guaranteed. Heinz Company works on redirecting of its products in any possible directions, including from the emerging markets to the developed economies and vice versa. It works for customer satisfaction, trying to maintain affordable prices at high-quality products and win the competition by introduction of the innovative technologies and creative ideas.
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