Australian Agricultural Company has been selected for the analysis of the strategic management inputs. This company is the largest beef producing countries in the global market which reflects that company deals in Agribusiness food-related sector of Australia. This report includes the complete analysis of the company that comprises of the products and services offered by them in the market with the most profit-generating units of the company. In addition, the paper includes the external analysis with the help of the PESTEL framework.
Further, there is an analysis of the internal factors that can be explained with the help of core competencies, capabilities and competitive advantage of the company. At the end of the report, the recommendations of the future strategic actions of the Australian Agricultural Company Limited have been discussed in the report.
Company analysis
Overview
Australian Agricultural Company Limited came into existence in the year 1824 as land Development organisation with the support of the British Parliament’s crown allow 1,000,000 acres in the Port Stephens area of the Colony of New South Wales (Australian Agricultural Company, 2018). The company is operating in the agribusiness food sector as it mainly includes farms and feedlots. Australian Agricultural Company has land coverage of approx. 7 million hectares in the area of Queensland and territory in north. AACo has headquarters in Brisbane and company was listed on ASE in the year 2001. In addition to this, the company remain a specialist in the field of Wagyu beef and grain fed beef (Australian Agricultural Company, 2018).
Product and services
Australian Agricultural Company processes are separated into three different segments which include cattle, Livingstone beef and properties. The company major products and services include breeding, finishing and processing of cattle. In addition, they produce grains and fodder crops that contribute to the manufacture of livestock. The regular volume for the manufacture of livestock is 1000 head (Australian Agricultural Company, 2018). This has been found in the analysis that the company not only produces the products but they also sell the products in the domestic as well as in the international market.
AACo owns and works a planned stability of the feedlots, properties and farms that comprise of about 7 million hectares of land in Northern Territory and Queensland. This has been found that each and every property of the company has a planned location in the AACo supply chain, in the background or finishing cattle, breeding and rising or in growing the grains and fodder crops which contribute in supporting the cattle production (Australian Agricultural Company, 2018). Presently, AACo company emphasis on the manufacture of the best beef crops for the exports and domestic consumption. The beef feeds over 1,000,000 persons on the regular basis. This helps the company to increase their market position in the sector of agribusiness in Australia (Australian Agricultural Company, 2018).
Revenue generation unit
There is the presence of different processing units of the company that helps in generating the revenue. The most revenue generating unit of the company is the meat processing unit which helps the company to attain the high profit (IBIS World, 2018). Australian Agricultural Company includes different brands such as Darling Downs Wagyu, Kobe Cuisine, Mater Kobe and Westholme (Australian Agricultural Company, 2018). The rise in the profit is possible because of the heavy sales.
The sales of the meat were 383,036 in the year 2017 and in the year 2016 it was 428,272 which shows that they earned more profit in 2016 than the year 2017. Though, the annual report also shows that the cattle sales of the company are quite less as it was 36,691 in the year 2017 and 61,084 in 2016 (Australian Agricultural Company, 2018). This decrease in the revenue of the meat has taken place because the company has taken steps towards another processing unit to earn the high profit. Along with this, the aim of the company is to improve the quality of the product which majorly includes red meat. Further, the focus is on evaluating the selling options with the aim of the maximizing the price fluctuations.
External Analysis
PESTEL
PESTEL analysis is a strategic framework that is used for identifying the external factors of the market where the company is operating a business (Baker, 2014). The analysis of the factors is essential for the AACo because according to these factors the company will make future plans in a competitive environment. These factors are discussed below: –
Political factors: – The political factors comprise of the changes in the rules and regulations of the administration that affects the working of the industry (Chernev, 2018). Australian Agricultural Company performs their business in different countries due to which there are many political factors that create an impact. This is the reason company ensure that they perform their business in the countries where political stability is present. The changes in the rules and regulations related to the taxes and business policies can affect working in different countries. In every country, there is the availability of the minimum wage regulations which is essential to be followed by the company for which they pay high and revenue gets affected.
Economic factors: – The economic factors that majorly impact include GDP, purchasing power, inflation of the country. The GDP of Australia scored as $1.2 trillion with the growth of 2.5% which leads to the increase in the purchasing power of the country. The increase in the purchasing power within country allows the users to make the purchase of the products (2018 Index of Economic Freedom, 2018). This offers the benefit to the company as they can easily make the high profit. AACo deals in different countries so their profit gets affected in a positive and negative manner depending on the GDP of the country.
Social factors: – The social factors include the culture, trends and behaviour of the customers towards the products that are offered by Australia Agriculture Company. In the current era, most of the people are transferring towards the use of healthy products which include agricultural products in Australia as well as in other markets (Chernev, 2018). This reflects that there is a rise in the need of the products that are offered by AACo.
Technological factors: – Technology is changing rapidly in the current times which create an impact on the business operations. Australian Agricultural Company needs to bring the changes in their operations because the use of the updated technology improves the quality of the products which ultimately brings the rise in the profit of the company. IT helps the company to maintain their system in an effective manner and also reduce the cost of some operations for the long run (David, 2011). Though, the use of the updated technology needs a large amount which is essential to be spent by the company. This might make AACo make the company to source the funds for investing them in business.
Environmental factors: – In the agribusiness sector, environmental factors play a vital role in the functions that are performed by the company. The change in the climate and weather brings the major changes in the operations and activities that are performed by Australian Agricultural Company. In different countries, there are different types of environmental standards and norms according to which the company adjust their operations (Ho, 2014). The AACo ensure that they follow the rules and regulations.
Legal factors: – The legal factors consist of the laws and regulations that are essential to be examined by the corporation before they begin with their processes in the country (Dawson, 2014). The legal factors remain different from each nation and not following that results in the company are trapped in a lawful fight that can affect their image and brand name which leads to profitability. The company should determine that they are able to meet the legal obligations so that they can carry out their smooth business operations.
Internal Analysis
The internal analysis includes the evaluation of the resources, capabilities, core competencies and the competitive advantage that is maintained by the company in the market of Australia.
Resources and capabilities
Australia Agriculture Company is maintaining their resources in an effective way as it is mist for the production system. The company develop the effective initiatives which work with the aim to offer environmental sustainability (Frynas and Mellahi, 2015). Generally, in the business of agribusiness, there is used of natural resources. This shows that production is done from the natural resources which include the major use of the land, cattle’s and other. In addition to this, the production needs the use of the natural water due to which the company keep the good understanding related to the aquifers of groundwater so that quality of water can be managed.
Along with this, the company make use of the technology which includes different property plans that are initiated to offer help in the identified areas with the high conservation value of biodiversity. The company are able to identify these areas because of their capabilities which support them ineffective management of the resources (Hollensen, 2015).
The continuous innovation and development in the business operations reflect the capability of the company for carrying the smooth operations. For example; AACo has brought the innovation and development in the field of the supply chain of products. In addition to this, the company is competing for maintaining a strategic balance for the feedlots, properties and different farms that are a most important resource that makes the company capable enough to maintain the high scale of productivity.
Core competencies and competitive advantage
The competitors of the Australian Agricultural Company Limited include NAPCO, The Consolidated Pastoral Company, S. Kidman & Co., and many others. All these companies are operating their business activities in the agribusiness sector. AACo has put in efforts which help them to maintain the competitive edge with the competitors. The innovation and development in the supply chain have offered a competitive advantage as they can easily supply their products across the different parts of the world (Grant, 2016). The company can easily align this with the production numbers of internal cattle. Further, the quality that they offer for meat and cattle in the market is considered as the competitive advantage for the company which helps them to grow. All these competitive advantages help the company to compete with the competitors.
Recommendations
Conclusion
The above analysis concludes that Australian Agricultural Company is considered one of the finest beef producers in Australia and global market. The company is able to score the position by offering high-quality products in different countries including Taiwan, Russia, Chile, Japan, USA and others. The analysis of the company is done which shows that the company has a vast area of land for the cattle with the units processing the production of beef. The company has analysed their target market to which they offer these products.
This has been found that most of the revenue is generated by the company from the meat business. The analysis of the external factors has been done that can affect the operations with the help of PESTEL analysis. The analysis will help the company to make the strategic decisions in the near future. Along with this, the internal analysis has been done which reflects the strengths of the company that helps them to grow in the market. In the end, the report includes the recommendations that will help the company in making the future plan.
References
2018 Index of Economic Freedom (2018) Australia
Australian Agricultural Company (2018) Cattle, breeding & Genetics
Australian Agricultural Company (2018) Livingstone Beef
Australian Agricultural Company (2018) Our Brands
Australian Agricultural Company (2018) Our History
Australian Agricultural Company (2018) Our Properties
Australian Agricultural Company Limited (2017) AACo 2017 Annual Report
Baker, M. J. (2014) Marketing strategy and management. London: Palgrave Macmillan.
Chernev, A. (2018) Strategic marketing management. Chicago:Cerebellum Press.
David, F.R. (2011) Strategic management: Concepts and cases. India: Pearson/Prentice Hall.
Dawson, J.A. (2014) The Marketing Environment (RLE Marketing). New York: Routledge.
Frynas, J.G. and Mellahi, K. (2015) Global strategic management. USA: Oxford University Press.
Grant, R.M. (2016) Contemporary strategy analysis: Text and cases edition. New Jersey: John Wiley & Sons.
Ho, J.K.K. (2014) Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.
Hollensen, S. (2015) Marketing management: A relationship approach. India: Pearson Education Limited.
IBIS World (2018) Overview
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