1. Strategically Positioning the
Farm Business

2. Operational Efficiency Versus Strategic Positioning
Productivity Frontier
(state of best practice)
low
high
Relative cost position
Nonprice buyer value delivered

3. Strategic and Operational Performance
HOW
WHAT
Clear Strategy
Unclear Strategy
Effective
Operations
Ineffective I
Equaled success in the past and will in the future II
Equaled success in the past, but success is doubtful in the future
III
Sometimes worked in the past in the short run, but competition makes success doubtful in the long run IV
Equaled failure in the past, and will in the future

4. Doing the Right Thing
versus
Doing Things Right

5. Components of Strategic Planning
1. Determine Mission and Goals
2. Internally Analyze Farm’s Strengths and Weaknesses
3. Evaluate the External Opportunities and Threats to the Business
4. Evaluate Potential Strategies for the Farm Business
5. Develop an Implementation Plan for Selected Strategies

6. Strengths and Weaknesses
Strengths Weaknesses
Products or Services
Operations/Production Processes
Marketing/Purchasing
Human Resources
Organization/Business Structure
Goodwill/Public Relations

7. Strengths and Weaknesses (cont.)
Strengths Weaknesses
Financial and Physical Resources
Production Technology
Information Management
Channel Linkages/Key Relationships
Management Team
Other

8. External Opportunities and Threats
The New Agriculture
International Competition
Industrialization
Differentiated Products
Food Supply Chains
Information/Precision
Source: Michael Boehlje

9. What This Means for Producers
1. Strategic Positioning
2. Determining alliances and partnerships
3. Marketing channels
4. Adopting appropriate technology
5. Preparing for accountability
6. Managing information
7. Frequent monitoring
8. Transferring management

10. Business Products & Size
1. What products are you going to produce?
2. What technologies & methods will you use to produce them?
3. How big will your operation be?
4. Will you specialize or diversify?
5. Where will your business be located?

11. Size/Growth/Downsizing
Focus/Specialize
Intensify/Modernize
Expand
Diversify
Replicate
Integrate
Network
Delay/Wait and See
Exit

12. Alliances
1. Will you participate in production alliances with other producers?
2. Who will you partner with for capital?
3. What alliances will you build for inputs, services and information?
4. What production systems will you use?
5. How will you participate in food supply chains?
6. What consulting services will you partner with?
7. Who will be part of your legal and financial team?

13. Marketing 1. Which production and marketing contracts will you sign?
2. Will you form marketing or purchasing alliances?
3. Will you participate in value-added endeavors?
4. Will you employ marketing services or consultants?
5. Will you develop direct marketing linkages to end-users?
6. Will you enter a niche market, such as organic products?
7. Will you have access to markets you want in the future?

14. Adapting Appropriate Technology - Automating a Process
1. What technology moves you towards goals in other areas?
2. Should you adapt technologically-assisted processes internally or externally? (Consultants)
3. What level of technology are you comfortable with?
4. What are you not doing now that you would like to do?
5. What job/process do you hate and would like to automate?

15. Preparing for Accountability
1. How will you track government regulations concerning the environment, chemical use, drug use, permitting and other areas?
2. How will you stay informed/ahead of new regulations?
3. Do you have review processes and plans to deal with regulatory issues?
4. Are you preparing for food safety traceability from end use to point of origin?
5. How will you review & manage legal liabilities?
6. How will you inform the end user of your stewardship

16. Managing Information
1. What information do you need to know, or want to know?
2. How will you avoid tracking excess information?
3. How will you filter and summarize information into manageable quantities?
4. When will you use outside consulting services?
5. What software systems will you use?
6. How will you employ precision technology?
7. What is the price of getting what you want to know?

17. Frequent Monitoring
1. How will you monitor your financial situation quarterly, monthly, or weekly?
2. How will you monitor critical factors to continually evaluate production efficiency and to identify potential problems before they begin to cost money?
3. How will you move toward a system of real time intervention that will help you make adjustments to save or make more money?
4. What monitoring provides useful information?

18. Transferring Management
1. How will you transfer management capabilities to other family members, managers, and employees?
2. What contingency plan do you have if the farm manager suddenly can no longer manage the business?
3. Who is management, who will be management?

19. Strategic Risk International Government Policy Government Regulations
Macro-Economics
Social
Natural
Industrialization
Technological Uncertainty
Competitive Conditions
Source: Positioning the Farm Business

20. Peak Performing Ag Executive
Perspective on the
Peak Performing Ag Executive
Measure financial performance
Strategic thinkers
Objectively assess strengths & weaknesses in themselves/people
Think in systems rather than components when looking for improvement
Risk takers but excellent risk managers

21. Perspective on the Peak Performing Ag Executive (cont.)
Evaluate but-what-if scenarios & contingency plans
Seek input and expertise from outside
See changes as opportunities, don’t see themselves as victims
See themselves as head coach rather than boss

22. Perspective on the Peak Performing Ag Executive (cont.)
Balanced approach to management of key performance areas
Spend time monitoring and analyzing performance
Use judgement rather than emotion
Creative and innovative
Communicators

23. Managing Strategically
Conclusions
Managing Strategically
Take time to think creatively, honestly & strategically
Develop a plan to strategically position your unique business
Find and develop a team to help
Run what-if scenarios and develop contingency plans

24. How Will Agricultural Professionals Work With Producers?
Agricultural professionals who can help producers develop strategic management approaches that take advantage of opportunities in the rapidly changing agricultural business environment will be invaluable.
Your customers are facing a radically different agriculture from that which existed several years ago. How are you adapting to provide radically different services?