HJ. Heinz Corporation
Political conditions and government regulations have always been important determinants of business development anywhere in the world. Tariffs, quotas and other trade barriers are obstacles to a globalize business which is created for various reasons. However, whether the creations of these trade barriers are inspired by a good cause, they are nevertheless, obstacles that prevent a more open and continuous trade activities among companies with different nationalities. Understanding that international trade is necessary for growth and further economic development, modern countries have spent billions of dollars combating such trade barriers.
One of the most prevalent undertakings to eliminate trade barriers in the North American continent is North American Free Trade Agreement (NAFTA). It is one of the pioneers of ground breaking movement to join different countries with vast regions to become a single trade area free from trade barriers. There are various other agreements prior and after the NAFTA agreement, like AFTA and GATT, but in this paper, we are focusing on NAFTA and how it influences trade and business within the regions involved.
In order to provide a clear example of how NAFTA affected business and trade within the region, I have selected a single business and examine its business development and business strategies. The company is the HJ Heinz Company, an American company founded in 1869. In the next chapter I will elaborate the company, its background and its strategic development. Afterwards I will elaborate the terms of NAFTA and how it affects strategic development of the selected company in the present days (Greider, 1997).
The focus of the paper is to assess how contemporary governmental regulations and agreements affect business development in America. II. Company Profile The name HJ Heinz was recognized as an incorporated business in 1900, however, the business has actually been operating since 1869 in Sharpsburg Pennsylvania. The founder was Henry J. Heinz. Throughout its development, the company acquired several companies as subsidiaries and expanded their product range. HJ Heinz and its subsidiaries are manufacturers and marketers of processed food products to retail consumer markets all over the world.
The product range of the company includes ketchup, soups, beans, infant food, sauces and condiments, and other processed food products. A of May 3, 2006, the company employed approximately 36,000 managers and workers around the globe (‘About Heinz’, 2007). II. 1. Activities The operating activities of the company include developing recipes in company’s research laboratories and experimental kitchens, selecting ingredients and processing them, sterilization of the products, homogenization, freezing, drying, baking and labeling the products for sale.
The company operates in total of 92 factories all over the globe, 83 of them are personally owned through branches and subsidiaries. The company manufactures its products from a wide variety of raw foods. Heinz has established pre-season contracts with farmers for raw materials like potatoes, tomatoes, cucumbers, etc. For dairy products, fruits and vegetables, the company simply goes to the open markets (‘HJ Heinz Annual Report’, 2004). The company is also involved in the development of many of its food processing equipments although managers of the company do not consider patent development as a core business of the company.
The company sold its products through various channels, like: corporate sales organization, independent brokers, agents and distributors. The company sales its products though supermarket chains, convenience stores, restaurants and hotels, foodservice distributors, and health-care services and several government agencies. The nature of consumers of HJ Heinz products are diverse, in a sense that there are no single type of consumers representing more than 10% of HJ Heinz’s sales account (‘HJ Heinz Annual Report’, 2004).