Reconceptualization of Competitive Strategy †MyAssignmenthelp.com

Question: Discuss about the Reconceptualization of Competitive Strategy. Answer: Introduction Australia is among the largest agricultural producer and exporter. Agricultural industry covers a huge market share in Australian market. As of February 2015, more than 325,300 are employed in this industry, fishing and forestry. In this country, agriculture and other related sectors generate $155 billion per year for having 12% share of Gross Domestic Product. The farmers in Australia have approximately 136,000 farms, which covers the 60% of the Australian Land. The country has the mix of dry land agriculture and irrigation. From all the sectors, beef industry is the leading agricultural sector in the country (Zott Amit, 2013). Australia is ranked number 2 in largest beef exporters after Brazil. In the industry, there are many players, which are generating profits, like; Australian Agricultural Company Ltd., Kidman Co., the Consolidated Pastoral Company and NAPCO. Australian Agricultural Company Ltd. (AAC) is the organization, which is taken into consideration for this discussion. It includes the environmental and strategic analysis of the company. AAC is a public company, which is ranked at number 523 among the top organizations in Australia. This organization generates its major share of the revenues from the meat processing in Australian industry (Bloomberg, 2017). In the year 2016, it generated the revenue of $781,399,000, inclusive of its sales and other revenues. The CEO of the company is Mr. Jason Strong, who is officially Managing Director Chief Executive Officer of the company. The AAC is a producer and seller of agricultural and beef products. It is engaged in the operations of farming and grazing properties, growing, breeding and dealing the beef cattle. This organization also provides the dry land and irrigated cotton, sorghum, chickpeas and wheat. There are so many brands, whose under the company markets its products, like; Takum i, Wagyu, Master Kobe, Kobe Cuisine, Brunette Downs and Premium Beef. It sells these products to hotels, restaurants, supermarkets and airlines in more than 21 countries. Currently, it operates 2 feedlots, 19 cattle stations and 3 farms. It runs its operations and beef processing across Western Australia, Queensland, Northern territory and New South Wales. The company separates its business operations into three categories, which are given below; Properties: This Company owns and manages the farms, properties and feedlots, where it is engaged growing, breeding and processing the cattle. It also cultivates the grains and crops for supporting thee cattle production. Cattle: It manages cattle and operates the rural properties across the country. Livingstone Beef: Company has located its beef processing facility in South of Darwin. Northern region has a daily production up to 1000 head of cattle. Now, Australian Agricultural Company Ltd. is engaged in expanding its sales and marketing activities in the international markets. Macro/ Micro environment analysis Australian Agricultural Company Ltd. was established in the year 1824 and it was the oldest company, which is continuously operating in Australia. It is positioned as a world leading producer of agriculture and beef products. One of the biggest strengths of the company is that it has implemented operating systems using the best practices in the world. It has established a record of using the land environmentally sensitive (Hahn Powers, 2010). It is the first company to hire their own field rangelands officer. AAC possess and runs strategic balance of farms, feedlots and properties including around 7 million hectares of land in Northern Territory and Queensland. This associates to approximately 1.1% of total land mass in Australia (Anderson, Narus, Narayandas, 2009). Moreover, The Company is vertically integrated and operates expanded agribusiness operations. This company has some weaknesses, like; it has a huge operating expenses. The major concern is that it has reported a net loss. Now, there is an increase in the processes and complexity to fulfill the requirements and formalities of animal rights forums. It is not considering the consumer behaviors, like; culture in distribution and purchasing (Landrum, Gardner Boje, 2014). If the company plans to expand its business, then it has to advertise the products in other countries, because it is not necessary that this brand will be popular in other country like Australia. Australia is the largest exporter of beef products, so it can expand its agribusiness to other countries also. It can develop its business in United States, because US is the largest market to consume the beef products. It should improve the quality of products, because the people in US are very concerned about their health and they consider the quality of beef at the first priority. AAC can respond to the health concerns of the customer behavior (Reardon, 2012). Expansion in meat processing facilities and marketing and selling of cattle will not occur more capital expenses to company. Implementation of more value added processes like; Branded Beef division of organization can be carried up to enhanced standards. This company is working in the field of beef processing and cattle trading activities, so outburst of diseases can influence the business of the company. It is offering the services in domestic and global markets, so trading and marketing is so much dependent on the policies and regulations of other countries economies (Morschett, Schramm-Klein, Zentes, 2015). The pricing policy of other players can pose a threat on this organization. At the time of expansion, it can face the threat from the local farmers, as they will grow more to compete with the exporter company, i.e. AAC. There may be a continued drought in Australia. PESTLE Analysis PESTLE analysis is conducted to analyze the external factors, which impact the company and all over industry. It includes various factors, like; political, economic, social, technological, legal and environmental factors. These are the different aspects, which need to be considered at the time expanding the business nationally or internationally. Australia country focuses on the free trade market, so this organization can have the competitive advantage by business expansion. Due to this reason, the law cannot prevent this company to make investment in other countries. The government in Australia is spending $1.8 billion on tax credit on research and development (Hill, Jones Schilling, 2014). The company may face problem from the political factors, as the Australian Government provides lowest subsidy support to the farmers. Australia is the worlds principal importer and trading nation. Australian agriculture sector helps in providing food for the country. Furthermore, it exports approximately 65% of agribusiness produces and contributes about 3% to GDP. In the year 2008, United States trade had the shortage of $695.9 billion. Then, it had imported the agricultural products from Australian companies; it increased the opportunities of business between Australia and US. The agricultural and beef products in Australia are the most competitive products in the world. The grain crops in Australia broke out all the records. The growth in this industry increases the job opportunities. AAC wants to hire more people for expanding their business. The economy of Australia is going downturn, so it can impact the business of AAC adversely. The prices of the companys product can also be regulated to a level by the foreign clients, who can consider macro-economic standards to control the import of beef. So, it can affec t the operations of the company. Australian Agricultural Company Ltd. had agricultural and beef products for a long time in the country. There are so many restaurants in the region, which include beef as the major ingredient in cooking, for example, Hamburger, i.e. the famous food service provider uses beef in food production. AAC supplies the products to various restaurants and hotels. Most of the people like to eat the beef, which is soft with the marbling (Zott Amit, 2013). The brands of AAC, i.e. Wagyu Beef and Kobe Beef have the quality and it is preferred especially for the taste. Most of the people in Australia relatively high income level, so they can afford the prices of beef and agricultural products. Technological factors AAC can use the new technologies for its business operations (Ho, 2014). Advancement in the technology can help in creating new processes and new products. The company can use the technologies to decrease the costs, enhance the quality of products and lead the organization to innovation. It can use the technologies for farming and beef processing activities (Moon, 2010). AAC can establish the new system in order to respond the demand and need of the customers and provide real time information to the suppliers and customers. Environmental factors are very important concern for AAC. It includes weather and changes in climate. If there will be changes in temperature, then it can impact the farming activities of company. The business environment in the country is not very much, so it impacts its operations. The situation of drought and flood can impact the crops. Business laws and trade restrictions may play an important role. In this process, the countries can impose restrictions on exports from Australia, which will not only hit the AAC but other players in the industry too (Pretorius, 2008). There may be some legal issues at the time of expansion. The foreign country will support its domestic farmers, so the price of exporters beef will be comparatively low. It will fall the competitive advantage of Australian Agricultural Company Ltd. because they have custom and transportation cost also. Competitive Advantage Competitive advantage allows the organization in getting the better position among its competitors by producing goods and services at lower prices. Australian Agricultural Company Limited is oldest company in the respective industry, so it is very popular by its operations. This is the major reason; it has strong competitive advantage over its rivals in the form of experience of many decades, knowledge and grants, which are very hard for other organizations to replace (Fleisher Bensoussan, 2015). It is working very well in the industry over its largest competitors like; S. Kidman Co., NAPCO, the Consolidated Pastoral Company and Baldy Bay. Recently, it has enhanced the quality of cattle and increased the herd by more than 38,000 head. This continued to produce high value beef and the sales of the company grew by 14%. It is planning to establish a new processing facility in Darwin with the capacity of 1000 cattle per day. It has good growth prospects in the industry. The investors a re also considering AAC to have the opportunity to directly invest in the agricultural produces. The competitive advantage of this company can be seen by looking at its revenues and sales, which are continuously increasing with an effective growth rate (Hunger Wheelen, 2011). Thus, of all the players in the Australian agriculture industry, AAC is with the strong competitive advantage. The key features, which are contributing to this advantage, include its wealth of agriculture land and emerging presence in Asian and American markets. If there will be boom in the foreign economies, then these markets can deliver AAC a time and cost advantage for its products in comparison to its key competitors. Companys generic strategies On the basis of Porters model, AAC used the generic strategies, which align with the growth strategies of the company. Especially, the growth strategy of market development is the key to meeting this generic strategy and supporting the success of AAC. The company is doing very different and better things from its competitors. It is targeting the countries with better economies. The company is positioned in the market as innovators in agribusiness (Kalkine, 2017). Implementing the cost leadership and product differentiation strategies is beneficial for the growth of the organization. It employs the cost leadership strategy in the predictable and stable environments. When there will be changes in the environment conditions, it will cause diseconomies for the company and overall agricultural industry for trying to implement a cost leadership strategy (Parnell, 2006). Although, the people, who love to eat beef do not think about the money or cost of the products. But still, AAC is able t o achieve the competitive advantage by providing the different products and low cost services via serving an individual market segment. It has launched the luxury and value added products to attract the target customers (Anwar, 2016). It is identified as the leading provider of beef, cattle and agricultural products from the year 1824. AAC is implementing different growth strategies for gaining competitive advantage in Australian agriculture industry. In order to take the benefits, the company is focusing on it operations and shareholders. The major strategy of the company is that it is making focus on branding and marketing of luxury branded beef business and supply chain and implantation of innovation and new technology in the industry. In addition, AAC has used market development strategy as its growth intensive strategy (Grey, Emer Sheng, 2014). It is creating new products and entering into new markets. The company has introduced new luxury brands of beef products, like; Wylarah and Westholme in Singapore in the end of 2016. It has controlled costs of products by 27%. It is making investment in cattle stock for ensuring the supply by using different techniques of supply chains. The group is gaining efficiency benefits, where 30% increase in Kilograms processed is recorded with 30% reduction in the conversion c ost. It is expanding the business in the countries, where it does not have its presence yet. The use of these strategies requires that different and unique products should be offered to the targeted market segment, i.e. economies, where the demand for agricultural products and beef is very high, for example; Asian countries (Long, 2014). The diversification and market development strategies will assist the company in growing its business in future also. Conclusion The report addressed different strategic aspects about a top ranked company, i.e. Australian Agricultural Company Ltd. It examined that agriculture industry in Australia is growing very fast and cover a huge market share in the country. It is the oldest company in the industry and doing very well by using different and effective growth strategies. It is using market development and cost leadership for enhancing its agribusiness in Australian market and other countries. The success of these strategies can be seen in the growth of the company. However, it is oldest company, but it is using various innovative and creative methods in farming and beef processing facilities. Thus, it is able to gain competitive advantage in the industry over its strong competitors. In future, it can achieve the business growth and expansion by implementing intensive growth strategies. However, AAC holds a strong position in Australian agriculture sector, but it can improve it by following some strategic recommendations. At functional level, it can use new and innovative technologies to improve its processing and agriculture activities. These techniques will assist in enhancing its strategic and financial performance among the competitors. It should implement the strategy, which supports its major business operations and activities. There should be an effective implementation of human resource management, funds and marketing activities. It is very necessary for establishing coordination among all the functions. Furthermore, this company is very strong in developing new products, now it should try to improve its performance in other countries. It should focus on market development and market penetration. If it will emphasize on these strategies, then it can improve the resilience of AAC against its competitors. References Anderson, J. C., Narus, J. A., Narayandas, D. (2009). Business market management: Understanding, creating, and delivering value. Pearson Prentice Hall. Anwar, K. (2016). Comparison between cost leadership and differentiation strategy in agricultural businesses. Cyprus International University. Bloomberg, (2017). Company Overview ofAustralian Agricultural Company Limited. Retrieved from https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=8745402. Fleisher, C. S., Bensoussan, B. E. (2015).Business and competitive analysis: effective application of new and classic methods. FT Press. Grey, E.M., Emer, O. Sheng, Y. (2014). 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