Agribusiness Markets and Competition Analysis
Written Paper and Presentation
AEC 422
Fall 2013
Dr. Woods
Introduction
The objective of the project is to help you develop the analytical and conceptual skills
required to evaluate the strategic direction of a firm and its competitive position within an
industry. The process of doing an analysis like this involves testing the assumptions and
beliefs surrounding the nature of a proposed business, evaluating it as to whether or not
the current strategy is sustainable.
Consider the strategy framework developed in lecture 1 (firm-channel-industry strategy).
A well done study should provide some insight on viable strategies for developing the
business, shaping the channel and firm-level management needs that will be required.
The class is divided into industry teams. Individuals within each team will complete a
firm-level analysis paper. Significant parts of the paper can be developed collectively
by the group, particularly the ‘microeconomics and competition’ and ‘industry and
position’ portions. The individual’s paper should address a specific firm within a specific
industry as noted below. (A group may be looking at the Ice Cream industry and one of
the students could choose Ben & Jerry’s as the specific firm. The industry and
competition issues will obviously be the same for all team members and can be integrated
into each paper). The firm-level analysis is due beginning of class, December 4. We
have 43 students – there should be 43 papers. The team will be responsible for
developing an oral group presentation of about 20-30 minutes and providing an industry
analysis, discussing major trends and driving forces. A brief presentation should be
provided about the implications of industry conditions and trends may have on each of
the specific businesses studied by each individual. Groups will be assigned a
presentation slot on December 4, December 9, or December 11. Some groups may
have to present on December 19 during the finals slot (or as arranged), depending
on the pace of earlier presentations.
Treat this as your final exam. Show that you can apply the unit concepts to a
specific firm of interest.
Firm-Level Analysis Paper
The firm and industry project is meant to be integrative of all our class material. You
should provide a brief description and history of the firm in an introduction. The paper
on the specific firm should discuss all aspects of the units (and corresponding cases)
discussed in the class, including:
1.
Microeconomics and competition:
Unit 1
Application of microeconomics to the firm, particularly the feasibility of
alternative horizontal and vertical boundaries. Are scale and/or scope economies
driving strategy? We discussed many sources of scale and scope economies.
Address these in your analysis. Discuss efficient size of operations in this
industry, ie, minimum efficient scale. What are the trends relating to scale and
scope? Discuss the firm’s products and services using the BCG matrix.
How does the firm fit within the value chain? Provide a value chain analysis that
discusses issues within their supply chain.
How do they try to position themselves as a preferred supplier? Who are their
customers? What is happening with competition? Besanko, chs 2,5,8 and 13.
2.
Industry and position (can be developed as a group):
Unit 2
An analysis of the industry in which this proposed venture will operate. This
should include a five forces industry evaluation and implications for the firm.
What is the structure of the industry? How is the firm positioned? Are upstream
or downstream changes impacting the firm and industry? Document trends in
prices, products, and innovations within the industry. This part can be done in
collaboration with your group, but implications for your specific firm should be
considered in the paper. Besanko, ch 12.
3.
Financial position
Unit 3
Evaluate the financial standing of the firm and examine the various ratios and
financial management tools discussed in class. Discuss profitability, efficiency,
debt, and liquidity. Compare the financial data with those of other peers, to the
extent possible. What kinds of financial decisions are facing the firm currently?
What might be some of the financial implications of various strategic choices
facing the firm? Are they positioned to take risks or manage tough markets?
Additional resources to complete this kind of evaluation will be made available
with the Monforte case.
4.
Sustaining Competitive Advantage
Units 4 & 5
A basis or strategy for building and sustaining competitive advantage for the firm
should be provided. Describe the value chain partners. Describe the competition.
What are your firm’s isolating mechanisms? Are they defensible? Discuss
benefit vs cost leadership. Discuss the value map. Where do you see this firm
needing to be 5-7 years from now to stay competitive? What changes need to
take place? Besanko ch 14,15.
Provide a summary of your conclusions regarding demand and profitability. Does the
firm’s existing strategy need to be changed? Would you invest in the company?
Be sure to document all data and informational sources used (see appendix).
Industry Presentation
The group should provide an analysis of the industry, particularly emphasizing the five
forces. Trends in products, innovation/technology, and costs should be addressed. Is the
industry becoming more consolidated? Fragmented? Why? Each member should
discuss the position and competitive advantage of the firm they studied along with an
outlook of whether the position is sustainable.
Tips for project management
•
Start early
•
Get together frequently
•
Share data and references, journal under each of the 4 areas
•
Exercises will be designed to help you apply your firm/industry to the unit
concepts.
•
Work on the application of the material for your firm project during or
shortly following the period it is covered in class.
•
Consider the approaches we used for each section for each case
•
Start early
•
Get ideas from your team on how they are approaching aspects of the project
•
Arrange for your team to meet with me to discuss your industry1
I’ll do everything I can to help direct you to resources. The earlier you let me know you are having
difficulty with something, the more I can help. Start early.
1