In the previous blog, we did a full SWOT Analysis of Patanjali. In this article, we are going to break down the SWOT Analysis of Yili – China’s leading dairy products manufacturer.
Inner Mongolian Yili Group’s full name Yili Industrial Group Company Limited, based in Hohhot, Inner Mongolia, is a Chinese dairy product manufacturer. It is listed as an A-share company on the Shanghai Stock Exchange, alongside Mengniu, as one of China’s largest dairy enterprises (SSE). Under the “Yili” brand, it manufactures ice cream, milk tea powder, sterilised milk, and fresh milk; under the “Pro-Kido” brand, it produces powdered milk; and under the “Satine” name, it produces organic milk.
It is the third best-performing food brand in the world in 2018. The Jinshan Development Zone in Hohhot houses the company’s headquarters. The corporation sponsored the 2008 Beijing Olympics as an official sponsor.
Also, Yilis’ digital marketing strategies have played a vital role in its becoming so popular around the world. It is marketed as a vibrant beverage strongly related to good health and sports.
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In this case study, we will learn about the SWOT Analysis of Yili. But first, let us know about the company and the product better.
About Yili
For numerous years, the Yili Group has been named No. 1 in the Asian dairy business, making it one of the world’s most successful dairy enterprises. It is also China’s largest dairy company, with the widest range of goods.
Yili is China’s sole dairy company that has satisfied the requirements for servicing Olympic Games, and it provided services for the 2008 Beijing Olympics. It’s also the only dairy company to meet the World Expo’s requirements, and it was the exclusive supplier of dairy products for the 2010 Shanghai World Expo. Yili has always emphasised, “internationalisation” and “innovation” as well as the two fundamentals of “quality” and “responsibility” throughout its history. Consumers have given it their trust.
With its high-quality, high-tech, and high-value-added varied dairy products, it has earned the trust of consumers. Over 100 million Yili items are shipped to customers every day. Yili goods are consumed by about 1.1 billion Chinese people each year.
In the first half of 2019, the company achieved a net profit of 3.8 billion yuan, up 0.33 billion yuan year on year. Furthermore, it generated total operating revenue of 45.07 billion yuan in the period, up 5.13 billion yuan from the previous year.
| Founder | Pan Gang |
|---|---|
| Year Founded | 1956 |
| Origin | China |
| No. of Employees | 59,159+ |
| Company Type | Public |
| Market Cap | $38.82 Billion (2022) |
| Annual Revenue | RMB 110.595 Billion (2021) |
| Net Income/ Profit | 8.73 Billion Yuan (2021) |
Products of Yili
In nearly one million Indian homes, the brand has become a household name. The following are some of their product categories:
- Bottled water
- Yoghurt
- Liquid Milk
- Milk Powder
- Cheese
- Ice cream
Competitors of Yili
On a global scale, Yili competes with several other private dairy farms. Therefore, the top 5 rivals are as follows:
- China Mengniu Dairy
- Byrne
- Milcobel
- Parmalat
- Emmi
- TINE
As now we have a better understanding of Yili, let’s look into the SWOT Analysis of Yili.
SWOT Analysis of Yili
Yili is India’s leading and most trusted milk production company, carrying out a detailed SWOT Analysis of Yili helps in finding its strengths, weaknesses, opportunities and threats. Understanding internal strengths and weaknesses and external opportunities and threats. SWOT analysis helps in forming correct objectives and plans for the future.
So let us go ahead and first have a glance at the strengths of Yili from the SWOT analysis of Yili.
Strengths of Yili
Strengths represent everything that an organisation is good at and why it sets them apart from the competition. They are the internal and positive attributes of any company. Yili’s strengths are
- Superior Quality: One of Yili’s primary mottos is to provide premium quality products that are healthy and nutritious and it is standing on its commitments which led it to become one of the world’s largest health-focused dairy providers.
- International Omnipresence: Yili has a network incorporating a global resource system, innovation system and marketing system in Asia, Europe, America and Oceania and takes advantage of profits from different sources.
- Innovation Strategy: The company is committed to the innovation strategy and continuously promotes it. It has R&D institutes in the world and extends its reach to Asia, Europe, Oceania, and America.
- Business Model: Yili deals in the dairy industry and this industry is said to be endless because dairy products like milk, butter and cheese come under daily goods and work as many for necessity.
- A Wide Range of Products: Yili has a diverse portfolio in over 15 consumer-centric product categories including fresh milk, skim milk powder, whole milk powder, an array of processed and natural cheese, cheese spreads, butter, Yoghurt and dairy whitener. This helps Yili to explore more revenue streams.
- Commitments: In the China food industry, Yili took a commitment to launch its Plan for a Net-Zero Carbon Future and Roadmap to a Net-Zero Carbon Future. Such initiatives show the company’s commitment to economic sustainability.
Weaknesses of Yili
Weaknesses pull an organisation back from performing at its best. They are the negative internal factors that weaken business strengths. A few drawbacks or weaknesses of Yili are
- Incompetency in the Chinese Market: Yili’s presence in China contributes greatly to its sales value however it has been constantly falling due to other leading dairy manufacturers.
- Limited Supplier Contracts: Yili relies too much on a handful of suppliers for its raw material which is milk purchased from farmers and this increases the risk factor greatly.
- Limited Attention on Other Segments: Yili exclusively focuses on revenue from its dairy segment which often gets the other segments overlooked.
- Improper Strategy: Upon further inspection, one can find out that the focus of all marketing efforts is long-term and that there are gaps in its short-term strategy formulation.
- Niche Market Segment: Yili’s premium pricing strategy allows its sales volume to reduce significantly as various lower economic sectors of the market go unexplored.
Opportunities for Yili
Opportunities are the factors that provide an organisation with a chance to edge over others. They are the external factors that can contribute to the success of any company. Certain opportunities that Yili has:
- Fitness Movement: Several health issues and epidemics tend to threaten the lives of various people and as they move towards a healthier lifestyle, Yili can be among the first brands to introduce organic products.
- Plant-based Nutrition: The shift to veganism allows Yili to take advantage of this opportunity and diversify its product portfolio.
- Acquisitions & Partnerships: Yili has established its presence in India through various acquisitions and mergers which also opens up the prospect of several more.
- Product Diversification: Due to its rising revenue, Yili has the opportunity to invest its revenue in research and development which will increase the number of products and their features ultimately leading to it gaining a competitive advantage in the market.
Threats to Yili
Threats are those factors that have the potential to provide harm to the organisation in any form. The threats to Yili are as follows:
- Severe Competition: The competition is extremely cut-throat in the Food industry. Some of its chief competitors are China Mengniu Dairy, Byrne, Milcobel, and Parmalat.
- Entry of New Competition: Due to the FMCG industry being an opportunistic, ever-evolving field, the entry of potential players into the market is easy.
- High Substitution Rate: Due to the availability of various substitutes like local distributors and local dairy plants available across several product categories, it is very easy for consumers to substitute Danone’s products.
- COVID19 Pandemic: COVID19 has caused a disastrous economic impact on economies and individuals which reduces the probability of consumers opting for dairy products that are labelled by brands like Danone, based on which customers are compromising on quality and thinking from the price perspective.
This ends our elaborated SWOT analysis of Yili. Let us conclude our learning below.
To Conclude
Thus, we conclude from the above analysis that as a brand that already boasts of a diversified product portfolio and global omnipresence, Yili’s strengths outweigh its negative factors if it were to take advantage of the opportunities in the market and take timely action to mitigate its risks.
However, to comment on the current global scenario, Yili must take advantage of the biggest opportunity out there which relies on the digital movement that is quickly causing all operations to switch to virtual platforms. In this light, it becomes all the more essential for Yili to direct a significant proportion of its funds to digital marketing which will cause its brand value to increase and its sales volume and value to multiply.
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We hope this blog on the SWOT analysis of Yili has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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