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Perdue Farms, Inc
1. What industry factors threaten Perdue's future growth and profitability?
2. Identify the generic business-level and competitive strategies the firm is using.
3. What is Perdue's corporate-level strategy, and how does it support its business-level strategy?
What industry factors threaten Perdue's future growth and profitability?
Following Industry factors threaten Perdue's future growth and profitability:
1) It is in tough and highly competitive market, particularly in domestic retail sector, the area in which it is earning 60% of revenue. This is business where there are lots of players and. there is little entry barriers for new business firms to come up.
2) Poultry operations can be divided into four segments: retail chicken (growth rate of 5%), food-service chicken and turkey (growth rate of 12%), international sales (growth rate of 64% over past six years), and grain and oilseed (growth rate of 10%). The bulk of sales continue to come from retail chicken, the sector with the slowest growth rate. The greatest opportunities appear to lie in food-service sales, where the company is admittedly behind. Though it is trying to overcome it through acquisition and internally trying to acquire necessary competencies to overcome the same but again due to competition and lots of players in the field it is a very tough area.
3) International sales are another area where there is tremendous growth political and economic instability in target countries makes the risk to capital significant. Apart form it local laws for food products is an important issue. Being a common item and source of employment in target countries, it has lots of political issues.
4) The industry is heavily regulated. The Food and Drug Administration (FDA) monitors product safety. Other regulations impact the industry includes the Occupational Safety and Health Administration (OSHA) and the Immigration and Naturalization Service (INS). They have to be adhered and followed rigorously.
5) Environmental issues and to comply regulatory framework is a constant challenge to all poultry processors. Growing, slaughtering, and processing poultry is a difficult and tedious process that demands absolute efficiency in dealing with operations and pollution control in order to keep operating costs at an acceptable level.
6) The related issues with environmental caring are equally important: a) how to maintain the trust of the poultry consumer b) how to ensure that the poultry remain healthy c) how to protect the safety of the employees d) integrity of the process e) how to satisfy legislators, who need to show their constituents that they are taking concrete action when environmental problems occur, and f) how to keep costs at an acceptable level.
7) The unacceptable level of repetitive stress injuries to its employees due to nature of work is major regulatory issue from point of view of taking care of health of employees. Various human rights activists Organization are also active and this has impact on public opinion about the issues.
8) Among the environmental issues a) surplus poultry litter problem and disposing it is an area where lot of legislation have come and restrictions imposed on Industry b) dead-bird disposal is other area which is equally important to be dealt with.
9) Explosion of poultry products and increase in customers placed a severe strain on logistical and supply chain system for Industry, which was developed at a time when there were far fewer products, fewer delivery points, and lower volume. The short shelf life of fresh products poses problems of processing fast, freezing and related logistics issues.
10) Volatile demand: Highly erratic demand and the nature of product make it very difficult ...
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