For this assignment, you are required to review academic sources relevant to Learning Outcome 1 and critique how theoretical concepts taught in the class are used by Auckland Transport OR Silver Fern Farms OR KiwiRail by reviewing its strategy documents publicly available online.
In your critique, you must cover the following topics:
i. The use of resource-based view & external analysis in formulation of strategy
ii. Types of strategies used by the organization
iii. Concept of Corporate Governance, Social Responsibility & Sustainability used by the organization in its strategic management process
In your critique,
? You should provide a brief overview of the content of academic source, summarizing the topic, the ideas it reports, and the author’s key conclusions.
? Argue how theoretical concepts are used by your chosen organization.
? Using evidence from theory, identify gaps in the strategic management process adopted by the organization.You are expected to use a minimum of ten (10) academic references in your critique.
The study aims to discuss the concept of strategy management in an integrated manner. As an integral part of management, the concept of strategic management holds immense importance (Hill, Jones and Schilling 2014). The concept includes identification and strategizing of actions keeping the goals in mind. The entire process includes objectives setting after analyzing the business environment and developing strategies. However, one of the major parts of strategic management is the evaluation of the strategies in order to understand the feasibility of the strategies.
In one word strategic management refers to the process of outlining how and what the strategies should be set (Hill 2017). Hence throwing light on the concept the paper will discuss the use of resource-based view as well as the use of external analysis while developing the strategies. Meanwhile, the study gives an overview of the strategies followed by the organization Silver Fern Farms. The whole course of discussion otherwise sheds light on different concepts of social responsibility, sustainability and corporate governance in line with the strategies taken by the company.
Overview of the company
Established in the year of 1948, Silver Fern Farm is a New Zealand based company that deals in the industry of food. The company exports beef meat, lamb meat and venison across the globe. The company is joint partnership of Shanghai Maling and Silver Fern Farms Cooperative. With a production of 30% of the lamb, venison and beef all over the New Zealand, the company’s annual sale of the company marks $2.4 billion over 60 countries across the world (Silverfernfarms.com 2018).
Presently Silver Fern has 14 plants along approximately 7000 employees during the peak seasons. It has partnered with more than 16000 deer, sheep and beef farmers (Silverfernfarms.com 2018). The grass-fed naturally raised animals are being used by the company in order to produce meat that contains high vitamins and omega 3 fatty acid. Thus the company focuses on quality meat with better tenderness and flavor. Over the years with sustainable business process the company has been able to secure the leading position in the meat production industry.
Mission and Vision
The vision statement of the company implies that the company is focused to ‘create inspirational food by passionate people’ (Silverfernfarms.com 2018). The company being one of the giant companies in the food industry, especially dealing in the meat production field, it always has been prioritizing on the quality food production so that it can hold its customer base.
The vision and mission statement of the company states that Silver Fern Farms follows honest principles in its business process. The company’s mission is to ‘produce best and serve best’ (Silverfernfarms.com 2018). In its mission and vision statement, the meat production company collects the meat from the purest source with authentic natural ingredients while value to the people behind the process. The mission statement suggests that the company gives special attention to the skills and expertise at every step of the production from pasture to plate while bringing new ideas in the business process.
Overview of Silver Fern Farms
In order to analyze the external environment of the company, porter’s five forces analysis will be conducted through which five forces; competition in the industry, potential of new entrants into the industry, power of suppliers, power of customers and threat of substitute product along with their impacts on the company will be discussed (E 2014).
Competition in the industry
According to market overview, New Zealand holds a leading position in exporting lamb, deer and beef. Due to several reasons such as pastoral agriculture, low cost, international recognition, etc made up the meat industry of New Zealand a highly competitive market. Talley’s, Anzco foods, Brink’s, Greenlea, Prime Range Meats Ltd., Leonard’s, and Integrated Foods Ltd are worth mentioning in terms of competitors for Silver Fern Farms (Mbie.govt.nz 2018). Among them, Anzco Foods deserves mention as the prime competitor since its market share has increased from 48% to 65%, while the Prime Range Meats Ltd. Generates $40 million revenue on annual basis (Mbie.govt.nz 2018). Thus it can be said that the number of competitors in the industry is extremely high while posing a serious threat on the company.
Potential of new entrants into the industry
Due to the fact that, New Zealand meat industry holds international recognition for quality and regulation makes up the industry growing and beneficial for investment. Around 20% investments from foreign companies are experienced every year in the industry, whereas the domestic new companies equally entering in the industry with large investment (Mbie.govt.nz 2018). For e.g., founded in the year of 2004, First Light Foods increased in the rapid manner holding one of the leading and repudiated company in the market, giving a close competition to Silver Fern Farms (Mbie.govt.nz 2018). Thus the high potential is one of the major threats for the company.
Power of suppliers
New Zealand holds the leading position across the world in term of animal farming. Thus the farmer who supplies the raw material to the meat industry is extremely high. Among the farmers, 23.5% are the livestock farmers (Mbie.govt.nz 2018). Meanwhile since meat industry is the largest industry of the country with a large number of companies, the suppliers of Sliver Fern farms can easily shift to other rivals companies given more beneficial deals. Hence, due to the higher number of suppliers, it does not cost much the company to switch from on supplier to another. Hence the low buyer power is an advantage for Silver Fern Farms.
Power of customers
The demand of meat is high in both the domestic market as well as in the international market. The giant food chains and the restaurants are the major customer base for Silver Fern Farms. Even though due to its reputation within the industry, the company has been able to keep a hold over its customer base, the large and powerful customer base provides more power to the customers. On the other hand, since the numbers of livestock companies in New Zealand is high it does not cost much a customer to swift from one customer to other (E 2014). Thus the high customer power is considered as the threat for the company.
Mission and Vision
Threat of substitute product
The company Silver Fern Farms is free from the threat of substitute product. Since the company deals with meat production, the competitors cannot use any substitute products in place the product served by the company (E 2014). However, the rival companies use different strategies as low pricing to attract its customer base which should be considered as major concern for the company.
In order evaluate the internal environment of the company, SWOT analysis will be done to understand the impact of internal resources on the company (Bull et al., 2016).
§ Natural environment of New Zealand is favorable for pastoral agriculture which is ideal for animal farming.
§ Low cost of animal farming is strength for the company for which the profit margin is high.
§ Strong rules in pastoral culture increases the quality of the meat that the company produces.
§ Internal recognition of New Zealand meat industry further adds value to the company.
§ The strong employee base comprises of 7000 personnel strengthens the company.
§ With 14 plants the company has been able to develop a large delivery network in the domestic market as well as in the international market (Silverfernfarms.com 2018).
§ The competitions among the large number of competitors demand the company to focus on strategy development in a continuous manner.
§ Inefficient way of animal farming by the suppliers creates the chance of low quality meat.
§ Apart from peak of the seasons, labor shortage is another issue that the company faces.
§ Since the company also deals in the international market, the price increase of importation affects the company’s business process in an adverse manner (Silverfernfarms.com 2018).
§ The Free Trade Agreements with several key international markets like Iran, The United Kingdom and European Unions are the huge opportunities for the company.
§ The high demand protein contained high quality meat across the world further increases the scopes for expansion of the company.
§ The company can further grow with advancement of technology by implementing it in manufacturing and packaging of the meat.
§ By making the employess more trained with skills and expertise, the company can draw more profits (Silverfernfarms.com 2018).
§ The major threat to the company is the growing trend of health across the world for which quality is the non-compromisable priority of the customers.
§ There are also trends of rejection of meat especially of red meat and a shift towards vegetable consumption can cause a decline in the sales margin of the company.
§ The threat of new entrants with huge investment and lower price strategy is another threat towards the sales margin of the company (Silverfernfarms.com 2018).
Strategies used by the company
From the above analysis, it has been seen that the high competition from the rival companies and the threat of health trend demands the company to adopt different strategies to increase its competitiveness in the industry (Wheelen et al., 2017). Below the discussion will shed light on the strategies used by the company, Silver Fern Farms.
Plate to pasture strategy
The company adopted a unique strategy through which it focuses on driving up the value chain in order to gain a higher rate of returns from the products (Silverfernfarms.com 2018). This strategy in turn let the company to give more profits and premiums to the suppliers.
The company exclusively focuses on the quality of the product that it provides. However, it must be mentioned that the company is known about its quality product delivery to the customers (Tricker and Tricker 2015). As part of the corporate governance, the company keeps a strict eye on manufacturing in order to assure quality. On the other hand, each of the 14 plants of the company has separate governing committee to look after the business process (Silverfernfarms.com 2018). There is a branch head with subordinate teams in each level and departments.
The company considers itself as a responsible food producer. Assuring a sustainable future for the stakeholders to whom the company serves, the company fulfills the responsibilities towards a sustainable society. The company strictly adheres to the directives of Animal Welfare Code 2011 while transporting stocks (Silverfernfarms.com 2018). Thus the company transports its stocks with critical care and with safety measure (Singla 2016). In order to maintain the trust of the customers, the company allows the customer to undertake the audit process in order to assure that whether the company is meeting the norms of business regulations. Meanwhile industry bodies also undertake the audit process. It has been seen that the company follows all the legal directives set by the National Animal Welfare Advisory Committee (NAWAC) in its business process (Silverfernfarms.com 2018).
The company carries different sustainable practices in its business process such as waste management, energy efficiency and several plans to maintain sustainability in environment. The company assists the farmers with Land and Environment Planning Toolkit in order to encourage them to manage the farming in sustainable manner (Schwartz 2017). In order to manage the waste, the company has installed bio-fuel boiler, waste-water management plant and son (Silverfernfarms.com 2018). On the other hand, the company has been able to reduce the carbon footprint of New Zealand beef and lamb by 17% (Silverfernfarms.com 2018).
Evaluation of the strategies
Since sustainability is the major concern in the business world, most of the large companies focus on sustainable approaches. Thus from the previous analysis, it has been seen that the strategies taken by the company in terms of social responsibility and sustainability are effective enough to maintain sustainability while fulfilling the responsibilities towards the society. Meanwhile the Pasture to plate strategy and other strategies of corporate governance are taken by the company ensures the quality of the product that the company serves.
Thus to conclude it will be right to state that the paper discusses the utilization of resource based view and also the utilization of external examination while building up the systems. Then, the investigation gave a diagram of the methodologies taken after by the association Silver Fern Farms. The entire course of discourse generally revealed insights into various ideas of social duty, maintainability and corporate administration in accordance with the methodologies taken by the organization.
Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem Services, 17, pp.99-111.
- Dobbs, M., 2014. Guidelines for applying Porter's five forces framew Review, 24(1), pp.32-45.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function. Macmillan International Higher Education.
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.
Singla, P., 2016. Corporate social responsibility with sustainability. ACADEMICIA: An International Multidisciplinary Research Journal, 6(3), pp.15-21.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices. Oxford University Press, USA.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. pearson.
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