GrainCorp Limited: Agribusiness And Food Ingredients Essay.

Identify an Agribusiness operating in Australia. Identify its business units and products and services lines.Identify its business revenue units and discuss the importance of the largest of these revenue units. Analyse the Agribusiness’ external environment.Discuss its political, economic, social, technological, environmental and legal operating environment. Analyse the Agribusiness’ internal organisation.Discuss its resources, capabilities, core competencies and competitive advantages. 

GrainCorp Limited is an agribusiness and food ingredients company. The company was founded in the year 1916 as the Grain Elevators Board. The company was started under the Grain Elevator Act. GrainCorp Limited initially wen through a lot of changes which led it to be called as the Grain Handling Authority of NSW by the year 1989 (GrainCorp 2018). After going through several other changes it finally became GrainCorp Limited in 1992 and was then listen on the Australian Stock Exchange in the year1998.

The strategy of the company is to operate in the global market of grains and provide prospects for growth in the demand for different grains, oils and malt. The objectives of the company is to participate in the several chains and geographies of grains through which they will be able to manage the variability of their earnings. Moreover, they aim to understand the opportunities and the potential of the global market for grains and deliver and grow according to the availability of demand. The company was initially formed with the view to transport grains from a local point throughout every producing areas in New South Wales. The company operates in several countries such as the United Kingdom, Asia, Australia, North America, New Zealand and others.      

2. Discussion

a. Company Analysis

The company had four business units through which their operations are established which are marketing, malt, oils and storage & logistics. However, the company announced on the 31^st of August, 2017 that they were simplifying their structure of the business by creating a single unit known as grains by combining two units which are marketing and storage & logistics (O’Keeffe 2017). Under the grains unit the marketing segment deals with the marketing of grains and other agricultural products and are also involved in the operations of grain pools. On the other hand, the storage & logistics segment deals with the receiving, transportation, testing and storage of grains such as barley, sorghum, wheat and canola. It also stores, imports and exports grains.

The malt segment deals with the production of products made of malt and offers inputs for brewing (Szwed, Tomaszewska-Ciosk and B?a?ewicz 2014).  The segment also provides malting services to several distillers and brewers, sells inputs about farms and is involved in the exporting of malts. The oils segment deals with the processing and the crushing of oilseeds, the supply of feeds and edible oil (Hamm, Hamilton and Calliauw 2013). The segment also provides different services such as logistics, storage, transportation and packaging.

Business Units

The business revenue units are the three units of the company which are mentioned above – Oils, Malt and Grains. The company generates revenue from all of their business segment. However, the most revenue generating unit of the business is their Malt and Grain segments. The business of malt production is present globally and the company is the fourth largest producer of malt in the world. They also have the largest network for grains in Australia and have several grain storage and handling sites.      

          b. External Analysis – PESTEL

            The PESTEL analysis helps the company to get a clear understanding about the different factors that would create an impact on the operations of the company.

c. Internal Analysis

            The resources used by GrainCorp Limited are mostly natural gas and all other resources that are needed for the production of grains, malt and edible oil. These resources are required by the company and are obtained from various suppliers. The raw materials are an essential part of the good quality of products that are made by the company. The raw materials and resources that are used by the company are derived from the best suppliers which is chosen very strategically by the company so that nothing affects the quality of their products (Sabourin 2015). The company also makes sure that none of their raw materials are harmful to the consumers or to the environment.

The company maintains an innovative and independent approach towards their business which is liked by their suppliers and customers. Their core competency is their skills of risk management towards their commodities which they have practiced over the years to make it stronger. The company have developed this skills over the years so that they are able to become a regional leader who is able to manage their supply chain of their agricultural products (Suvedi and Kaplowitz 2016). The customers and the suppliers of the company are attracted by the core competency of the company which is the most important feature of the company. The company has a huge range of capable production and operation units which enable it to create products which are of value to the consumers.

The products that they produce are mostly sought by several high leading manufacturers of food in the world and this due to their capable and highly developed processing units (Storer et al. 2014). GrainCorp Limited functions in a highly competitive market where there are numerous other agribusiness industries. The competition takes a huge toll on the complete profitability of the company. The company focuses on innovations regarding their products so that they are able to gain a competitive edge over their competitors.

Revenue Units

They aim on increasing their capacities of building their resources and their expenditure and invests on research and development of new products and services (Martinez 2014). The internal analysis and understanding of the company will help them to grow and develop and become the best in their industry in terms of the products and the services that they offer.      

d. Recommendations

            GrainCorp Limited has a lot of reach and foothold over the agribusiness sector. However, there is always a scope and opportunity for growth in every business which would enable them to stay well above their competitors. There are several recommendations which if followed by the company can help them to achieve their objectives. Firstly, there are several new emerging trends in the market which are being adapted by the customers. These new trends will help the company to explore new areas of the market (Kirkegaard et al. 2014). The company will be able to generate more revenue and diversify their product and services lines in trying to meet the demands of the new trends. Secondly, the development in the market will help the company to increase their competiveness so that they can compare themselves to the other competitors of their field.

Thirdly, the market which is currently facing a low rate of inflation will provide to be beneficial for the company as it will make them more stable in the market and they will be able to provide credits to the customers at a very low rate of interest. Fourthly, if the company is able to get a good understanding of the new taxation policies that have come into existence then they can use it to their advantage and use it to increase their profitability. Fifthly, the core competencies of one sector of the company can be used to make better products of another field a huge success. Sixthly, the company could plan to lower their shipping charges which would enable the decrease of transportation cost. It will lead to a decrease in the products of GrainCorp Limited.

This decrease in the cost of products can be advantageous for the company as they will be able to create a boost in their profits as more and more customers will be able to purchase their products (Rochecouste et al. 2015). Lastly, the company should focus on new innovations regarding both their technologies and their products. Since people are attracted to new things, these innovations can help them to gain new customer base and also retain the old ones successfully. Innovations will also be internally beneficial for them as they will help the company to grow and develop and expand their own abilities and capabilities. The following recommendations will help the company to grow and explore new areas and manage their customers and also increase their profitability and their competitiveness.            

External Analysis – PESTEL

3. Conclusion

            Hence, it can be deduced from the above report that GrainCorp Limited has a successful holding in the agribusiness both in the Australian and the global market. Through their strategies that they use for the development of the company there will be able to grow in their field and explore several new and unattained areas in the agribusiness sector. The company operates in three segment which are Oils, Malt and Grains which is again divided into two sectors namely Marketing and Supply & Logistics. Out of these three segments the mist revenue is gained in the Grain and Malt sector due to its global presence.

Both the sectors are global players which makes them gain a lot of consumers in the global market. The external factors which create an impact on the operations of the business is also determined and will be helpful for the company’s development. The different resources, capabilities and the competencies of the company will help them to beat their competitors and gain advantage over them. Moreover, the recommendations that are mentioned will help the company to gain profitability and also make them maintain their position in the market.  

4. References

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