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Potential Risks and Benefits

Discuss about the Source of Sustainable Competitive Advantage.

Silver Fern farms are a Primary Producers co-operative Society registered in the year 1948. In beginning the company started with trading as PPCS while changing itself to Silver Fern Farms in 2008.  The company recognized in 1948 as the Primary Producers Cooperative Society. It was formerly situated in the South Island of New Zealand as a meat marketing cooperative primarily selling sheep. The company formerly transformed into PPCS Limited till the deployment of new management team. The over-capacity in meat industry gave a chance to utilise its profitability generated in the previous decade.  It expanded formal functioning in 1980s from small processing operations via meat giving out cooperatives originally in the South Island and later the North Island (Council, 2016).  Later in 1986, the released asset value was returned to the farmer shareholders through the holding company Apex Limited.  Acquisition of Canterbury Frozen Meat and consolidation of the New Zealand meat industry sustained during the 1990s with PPCS.  This includes business competence by not getting trapped out by the competitors like AFFCO Holdings.  However, in 2006, the company Hawkes Bay based Richmond Meats to determine issues regarding the undisclosed investment created in the late 1990s. This burdened the cooperative with debt. As a result the Silver Fern Farms in 2008 based on the long standing brands.  The company was unable to complete the equity lifting required finance offered.  They had to pay $42 million in compensation to Silver Fern and write off a total of $50 million for the compensation and due diligence expenses.  They are important for managing tasks in an appropriate way.

The brand revamped itself On 1 October 2014, by reorganizing the business into three species-based units.  They created two new 100% subsidiaries, Silver Fern Farms Beef Ltd and Silver Fern Farms Venison Ltd. In October 2015, Silver Fern Farms underwent a partnership proposal for an investment of NZD $261M with a subsidiary of Bright Food Group. The company underwent a deal with a Chinese company that will help in global expansion. The deal was completed in June 2016(Hutching, 2016). The vision of Silver Fern Farms Beef Ltd is to create an inspirational Food by Passionate People. The company is thinking of ways to manage individual interest by developing an effective ways to enjoy a meal by the people. There strategy is to identify the needs of the consumers and developing the same accordingly.  As a cooperative society, Silver Fern Farms has a target to manage the organization to gain market competency.  They are highly focusing over the high quality, grass-fed, red meat that is made in New Zealand.  As a long term strategy, the brand wants to establish itself as the consumers brand to deliver reliable and sustainable chain of care for farmers.  Their central plan is to deliver what is promised. For the reason, they are meeting consumers’ needs by working consequently with the team. Silver Fern Farms Co-operative Limited distributed a special dividend of $34.5 million on 14 February.  The shareholders received 30 cents per share on all Ordinary Shares and Rebate Shares after the completion of Shanghai Maling Aquarius’ $267m investment in Silver Fern Farms Limited (Silver Fern Farms, 2017).

Competitive Advantage

  1. New Zealand is a stable and globally competitive business environment. They have a positive economic growth. For the reason Trade has been an essential element in order to gain economic affluence.
  2. The prospective investment opportunity in the coming years will gradually impact the business growth. This will gradually help in handling of free trade agreements, pro-competitive regulation, an efficient tax regime in gaining innovation and an efficient and competitive economy.
  3. In some way the country is using the foreign funds preferable to manage the export and import.  FDI provides with different risk sharing options to the business organization by supporting capital investment.
  4. FDI is an important parameter that offers greater stability of funding in the business organizations in New Zealand. It is a a smaller amount liquid form of investment which reduces the risk of the firms due to rollover risk. The Debt to direct investors does have favourable terms.  These features help in reducing the economy from risk. They however help in reducing risks to macroeconomic steadiness. It is evident for an economy that FDI can amplify the chances of supplementary investment into New Zealand. Multiple investments in the country will eventually.
  5. Silver Fern Farms and Chinese company Shanghai Maling have signed their partnership In June 2016 appointing present SFF chairman Rob Hewett as a co-chairman along with Xia Xu Shen.  The deal amounts to $267m investment into Silver Fern Farms acted as a game-changer for Silver Fern Farms. 
  6. The International deals act as an appropriate platform to manage the strong and sustainable capital structure. This will eventually help in managing the resources to speed up strategy in ongoing and upcoming market. It will allow the business organization in optimising production facilities and capability. Outstandingly, this will help in managing the fastest growing red meat market in the world.
  1. Foreign Direct Investment has a direct focus on resources other than the investor’s home country. The foreign direct investment at times hinders domestic investment. At times, the FDI causes problem in managing the local resources.
  2. There can be problems in term of political issues.  There is a difference in the political environment  of China. This might cause a direct risk in managing business opportunity. The investment is very risky in that case creating problems. Certain risk factors in FDI are very risky and the chance of loss is extremely high (Kumar, Jones, Venkatesan & Leone, 2013).
  3.  Foreign Direct Investment has a Negative Influence on Exchange Rates. This can occasionally affect exchange rates in the favor   Silver Fern (Pearce, 2015).
  4.  At times one can notice that it is more expensive to export goods. This is imperative to prepare sufficient money to set up your operations. There can be issues in relation to the economic viability while managing the resources derived from outside (Hinton & Hamilton, 2013). This is eventually important to consider foreign direct investments may be capital-intensive for investors.
  5. They are at times considered to be very risky for the investors.  This is to manage the political changes to expropriation, where the government will control property and assets. In such a situation, FDI has negative implications on the country.  It is possible to manage the changes taking place in the global environment.
  6. This is important for taking care of the global factors while considering the expansion. It is evident for the business organization in matching up with the international competition. This is applicable in matching up with the expectations of the consumers (Massa & Testa, 2009).

Global competition is creating multi-fold business opportunity. This helps in generating sales with a superior margin.  Competitive advantage with the different factors helps in managing the competition in an effective way.  It provides with a cutting edge while generating ability against the competitors.  Porter’s generic strategies are "Cost Leadership", "Differentiation" and "Focus” Strategy.  The focus strategy is divided into two parts: "Cost Focus" and "Differentiation Focus."

It creates sustainable cost leadership in between the organizations while developing better goals (Wagner & Hollenbeck, 2014).  This strategy helps in deriving economies of scale in order to manage the organization in a best possible way. Silver Fern Farms and Chinese company Shanghai Maling have signed their partnership In June 2016 appointing present SFF chairman Rob Hewett as a co-chairman alongside Xia Xu Shen.  The deal amounts to $267m investment into Silver Fern Farms acted as a game-changer for Silver Fern Farms (Completion of investment by Shanghai Maling, 2016).

The International deals act as a support in managing the strong and sustainable capital structure. This will eventually help in managing the resources while focusing upon strategy in the upcoming global markets. It will allow the business organization in optimising production facilities and capability (Spencer, 2017). Prominently, it helps in shared and associated partnership in the fastest growing red meat market in the world. The deal will help in gaining competitive advantage in order to manage growth in an effective way. The deal is important from the point of view of gaining effective business opportunity globally.  It is important to manage the organization in a better way by generating global competition. It is important for managing long term sustainable market. It is evident for the business in managing the issues in the best probable way. A Business entity can gain market effectiveness in an effective way (Madsen & Walker, 2015).

 The primary focus is to create quality meat by forming alliance with the   international brand.  In this way the company can expand its business while considering the future advancement. The demand will be increasing in coming future creating a better opportunity for the global expansion. In this way, the company can expand its business operations. The cooperative will be receiving 50 percent of its future dividend after receiving board approval (Goetsch & Davis, 2014). The global advancement will help in managing the business opportunities in an effective way. This is important for gaining effective business results. This is evident for a business in managing business overseas.   This has a potential to establish a unique position in the fastest growing red meat market in the world (Hutching, 2016). Shanghai Maling’s has an integrated supply chain model that will permit them in developing product and consumer marketing skills in order to gain competitiveness.

The business culture in New Zealand is moderate as compared to the other countries. This is an effective way through which the culture can easily be managed by the control of the employees at each and every level. The organizational culture motivates employee in an effective way. This is one of the effective way through which the company is organizing its resources.  This is important for gaining effectiveness in order to manage the organizational goals. While expanding business internationally, it is evident for the business to manage the business operations by adopting the local culture. The business culture in China is different from that in New Zealand. There can be challenges in terms of performing business in China due to difference in culture. It is highly importance to adopt the culture and develop certain level of functions that help the company in mitigating the cultural gaps. For long term sustainability, it is important for a business to develop effective business policies. This will be helping in gaining better cultural understanding and managing the culture in the most appropriate way (Baker& Saren, 2016). The trade and cultural barriers in the country can be mitigated with the help of organizing an effective business opportunities. In such a competitive atmosphere, it is evident for business to manage the culture in an appropriate way to fill the gap. It is evident in the current context while managing the business opportunities to gain competencies. This is important for managing better results by organizing better organizational goals. While managing the organization, it is important to manage the circumstances in the best and effective way.  This is important for the business in deploying the resources in an effective way.  This is important from the point of view of gaining organizational growth (West, Ford & Ibrahim, 2015).

For gaining effective results, it is important for the country to develop policies supporting business culture, this is important for a business organization in managing the results in the best and appropriate way. For an organization, it is important to manage the results in an effective way. It is important for gaining important business results and managing organizational goals. It is important for a country to develop a sound business law and regulations. These regulations are important for carrying out the business in the appropriate way (Vitalis & Scott, 2015). This is important for a business in gaining market competencies for expanding business. It is important for the business organization in mastering the effective growth opportunities. These market opportunities can only be realised if the country has ample of business growth. It is necessary for a business in gaining effective measures in arranging results (Kelsey, 2015). 

The policies need to be framed that support business organization evidently. It should help business in gaining a competitive advantage and developing an effective market place. This is important from the point of view of managing the business operations across the border. It is important in dealing with the cross-border transactions. With the expansion in the business, it has become evident to use a progressive business technique helping in gaining competitive advantage. The FDI policies should allow business enterprises to make advancement while expanding business.  Business Opportunities are important to gain an appropriate advancement in the right direction. These business policies are important for business in making appropriate result (Buckley, Burton & Mirza, 2016).

References

Baker, M. J., & Saren, M. (Eds.). (2016). Marketing theory: a student text. Sage.

Buckley, P. J., Burton, F., & Mirza, H. (Eds.). (2016). The strategy and organization of international business. Springer.

Completion of investment by Shanghai Maling,(2016) (Online).Retrieved from:

Council, T. R. (2016). Silver Fern Farms Ltd Waitotara Monitoring Programme Annual Report 2014-2015.

Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Hinton, M., & Hamilton, R. T. (2013). Characterizing high-growth firms in New Zealand. The International Journal of Entrepreneurship and Innovation, 14(1), 39-48.

https://www.silverfernfarms.com/our-company/latest-news/completion-of-investment-by-shanghai-maling/ Accessed on: 26 October 2017

Hutching, G.(2016). Silver Fern Farms and Shanghai Maling tie knot. (Online).Retrieved from: https://www.stuff.co.nz/business/farming/87274271/silver-fern-farms-and-shanghai-maling-tie-knot Accessed on: 26 October 2017

Kelsey, J. (2015). Reclaiming the future: New Zealand and the global economy. Bridget Williams Books.

Kumar, V., Jones, E., Venkatesan, R., & Leone, R. P. (2013, May). Is market orientation a source of sustainable competitive advantage or simply the cost of competing?. American Marketing Association.

Madsen, T. L., & Walker, G. (2015). Modern competitive strategy. McGraw Hill.

Massa, S., & Testa, S. (2009). A knowledge management approach to organizational competitive advantage: Evidence from the food sector. European Management Journal, 27(2), 129-141.

Pearce, D. G. (2015). Destination management in New Zealand: Structures and functions. Journal of Destination Marketing & Management, 4(1), 1-12.

Roche, M. (2014). Changes and Challenges Facing the Export Meat Industry in New Zealand.

Spencer, A. (2017). Meat industry association news. Food New Zealand, 17(1), 44.

Vitalis, H., & Scott, R. (2015). Joint ventures in the public sector: Translating lessons from the private sector to New Zealand government departments. Proceedings of the 2015 Australia and New Zealand Academy of Management.

Wagner III, J. A., & Hollenbeck, J. R. (2014). Organizational behavior: Securing competitive advantage. Routledge.

West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive advantage. Oxford University Press, USA.

Silver Fern Farms, (2017). $34.5m Dividend For Co-Op Shareholders, (Online). Retrieved from: https://www.silverfernfarms.com/our-company/latest-news/34-5m-dividend-for-co-op-shareholders/ (Accessed on : 19 November 2017)

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