Strategic Business Planning For Commercial Producers

Strategic Business Planning for Commercial Producers

What Tools Are Available to Generate Strategies?

Strategic Business Planning for Commercial Producers

Generating Alternative Strategies from SWOT
• SWOT analysis is a tool for helping assess the current situation for the firm. • However, we need to be able to combine the information in the SWOT analysis in a meaningful way togenerate alternative strategies that we might pursue. • The TOWS matrix is a tool designed to match external opportunities and threats with internal strengths and weaknesses.

Strategic Business Planning for Commercial Producers

SWOT Analysis
Internal Environment
Strengths 1. 2. 3. Weaknesses 1. 2. 3.

External Environment

Opportunities 1. 2. 3.

Threats 1. 2. 3.

Strategic BusinessPlanning for Commercial Producers

TOWS Matrix
• Technique used in strategy formulation for combining
– External analysis
• Opportunities • Threats

– Internal analysis
• Strengths • Weaknesses

Strategic Business Planning for Commercial Producers

TOWS Matrix
From Internal Analysis (IFAS)

From External Analysis (EFAS)

Opportunities: 1. 2. 3. Strengths: 1. 2. 3. SO Strategies Usestrengths to take advantage of opportunities WO Strategies Take advantage of opportunities by overcoming weaknesses

Threats: 1. 2. 3.

ST Strategies Use strengths to avoid threats

Weaknesses: 1. 2. 3.

WT Strategies Defensive strategies to minimize weaknesses and avoid threats
Source: Weihrich

Strategic Business Planning for Commercial Producers

Business-Level StrategyStrategic Business Planning for Commercial Producers

What Is Business-Level Strategy?
Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage. Business-level strategy is an integrated and coordinated set of commitments and actions designed to provide value to customers and gain a competitive advantage byexploiting core competencies in specific, individual product markets.

Strategic Business Planning for Commercial Producers

Strategic Position
Successful farms will answer a fundamental question: • Where will my farm focus its resources and its passion?

Strategic Business Planning for Commercial Producers

Strategic Position
• Is the way a firm goes to market. • Is the fundamental way thefirm creates value for the customer. • Is the passion of the organization. • Drives the organization’s resource investment decisions. • Is built around the firm’s core competencies, the firm’s primary skills and sources of competitive advantage.

Strategic Business Planning for Commercial Producers

Positioning Options
• Example of Possible Positions in an Agricultural Production Firm
–Low-cost, bulk commodity producer – Customer-oriented specialty products producer – Full-service, consumer-focused custom farming operation – Efficient, partnership-focused contract animal feeder – Technology-focused, cutting-edge animal breeder

Strategic Business Planning for Commercial Producers

Customer Focus
• Adding value for customers ultimately determines a firm’s success. • But we needto know who the customers for our product are, what those customers needs are, and how to satisfy those customers’ needs.

Strategic Business Planning for Commercial Producers

Customer Focus
– Who is about determining what segment of customers we will serve.
• Is it the broad market? Or a specific customer in our local marketplace?

– What is about determining what the customer groups’needs are that our products and services can satisfy.
• Is it organic GMO-free products? Is it consistent timely delivery of the product over an entire year?

– How is about exploiting our core competencies to implement value-creating strategies to satisfy our customers needs.
• How can we take advantage of what we do well to deliver our targeted customers’ needs in a way that gives us a...