Sombreros off for Mexico business strategy

Sombreros off for Mexico business strategy at WMS Case Competition

A bold plan to turn a Hamilton-based dairy equipment manufacturer into an international powerhouse by moving to Mexico, and then expanding into North and South America, has seen a team of students from Waikato Management School win this year’s 39th WMS Case Competition.

An entertaining presentation for the judges about Waikato Milking Systems – complete with sombrero hats - saw ‘The Five Profiteers’ team secure the competition’s $2,500 prize, donated by event sponsor PwC. The team included (pictured from left) Bachelor of Management Studies students Tasha Taylor, Jordan Herbert, Casey Stewart, Rhandal Meijerink and Dean Phillips.

The Five Profiteers identified that Waikato Milking Systems (WMS) faced three key problems: over-reliance on the domestic dairy market for sales, geographic isolation from international markets; and high costs of production in New Zealand. To overcome this, they proposed the company should go into partnership with Tacna Services, a low-cost manufacturer in Mexico with 24 plants located near the border of California – the largest dairy region in the United States.

Mexico has a competitive labour market on a par with China, and more free trade agreements than any other country, resulting in lower production costs. The partnership with Tacna would lead to expected savings for Waikato Milking Systems of $45.4 million and a 33% increase in revenue by 2022.

“We knew our strategy was original and would stand out from the other teams, but we never expected to win,” said team member Jordan Herbert. “We talked about how everyone else would have the same idea of going into the US market straight away, so we wanted to do something different.”

Waikato Milking Systems CEO Dean Bell said The Five Profiteers were clearly passionate about their strategy, and managers would discuss some of the students’ “innovative ideas” at their next meeting.

Senior lecturer in strategic management Dr Stephen Bowden said the Waikato Management School Case Competition, established in 1989, gives students an opportunity to act as ‘business consultants’ and apply what they have learned in class to a real-life company. It is seen as a practical highlight of the four-year Bachelor of Management Studies (BMS) degree.

The judging panel featured Professor of Agribusiness Jacqueline Rowarth (Waikato Management School); Nicole Measures (Corporate development analyst at Waikato Milking Systems); Brent Goldsack (managing partner at PwC Waikato); Grant Neagle (director at PwC Waikato); and Vice-Chancellor Professor Neil Quigley (University of Waikato).

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