The Strategies to Compete – The “Business Units”
In my recent columns I’ve been talking about the “corporate” entity called Canada Food Inc. I’ve discussed the need for a corporate mission, vision and strategies for that overall entity. I’ve also referred to the various segments of the food system as “business units,” for example the Red Meats Business Unit, comprising growers, primary producers and further processors. These business units each need to have their own strategies tied into the “corporate” plan, but developed to be unique for their business segment.
Finally, in my last article I talked about leadership and where it might come from on both the corporate – in other words, national – level of the food system, as well as for each of the business units. I also made suggestions about how we might evolve that leadership and make the whole “national food plan” a workable thing.
Now let’s work from the assumption that the Canada Food Inc. strategic plan has been developed along the lines I suggested previously, namely:
Mission: To create food that is globally competitive and financially sustainable for the whole sector.
Vision: Canada = Food. By 2020, Canada is the global leader in the food industry.
Strategies: 1. Become the most innovative food sector in the world; 2. Become one of the most productive food sectors in the world; 3. Become one of the most sustainable food sectors in the world; 4. Become a large net exporter of value-added food products; and 5. Create a regulatory infrastructure in Canada related to food that enables strategies one through four, and is seen as a “global best practice.”
Now if I’m the “general manager” of one of the business units, how do I proceed? Let’s consider the red meat business unit. My corporate mission tells me I need to be focused on becoming the global leader in red meats with the “brands” Canada Beef, Canada Pork and Canada Lamb (and perhaps some other “minor brands”). It also lays out some strategic focus areas for me. Now what do I do?
Well, who are our competitors? In lamb there’s New Zealand and few others. In beef or pork, clearly the U.S. is one, and there are some in the rest of the developed and developing countries. What are the strengths and weaknesses of the key competitors?
Consider too if there are alternatives to our brands. There is a growing feeling that it’s healthier to eat plant-based protein rather than meat-based. How might that (or other alternatives) affect our success?
Who are our customers, both retail and foodservice? How are their sectors evolving, and what will that mean to us? What about consumers? Are there issues (for example, ethical treatment of animals) that might impact us? We’d also need to look at both domestic and export markets since the population and demand will be flattening in developed areas of the world, but growing in the developing areas.
Consider too who our input suppliers are for genetics, feed/nutrition, animal health, packaging and equipment. That also includes service suppliers like logistics service providers. What’s happening in those areas that might have an impact on our business?
What opportunities does our market analysis highlight that could be good for our business, and what would we need to do to grow based on those opportunities? What about the challenges we’ve uncovered?
What are our key strengths that we can build on to make our business more successful? What are the weaknesses that we have to shore up so they don’t get in the way of success?
Now we have the basis for developing strategies that are specific to our sector, but that tie in with the corporate strategies.
Strategy 1: What’s our innovation strategy? Should we be focused on specific market segments like upscale, artisanal products, or other growing niches in the domestic market? Longer term, should we be working with researchers to create a lower-fat, healthier version of red meats to appeal to health-conscious consumers, but that retain the culinary characteristics that make red meat appealing?
Strategy 2: What’s our productivity strategy? Perhaps we could work the whole value chain and implement a lean operations approach that would increase efficiency and reduce costs.
Strategy 3: What’s our sustainability strategy? Should it be focused on energy/waste, food safety, or social responsibility? Our food safety programs aren’t too bad, but maybe we could make great strides in reducing energy use through the whole chain, as well as waste, and wouldn’t that tie into the productivity strategy? Yes!
Strategy 4: What’s our export strategy? What should we be looking at as export market opportunities? I’ve heard that a large percentage of New Zealand lamb is now going to China – can we fill the resulting supply gap in the rest of the world? Where might we start? What about beef and pork?
Strategy 5: What’s our regulatory strategy? Are there regulations that really hinder our success? If so, let’s focus on working with government to fix this.
So, you see, it’s not that hard to figure out what each of the business units needs to do. It’s an analysis that must be done to result in a business plan. Now, how do we get buy-in and alignment for that plan? Everybody in the business unit must understand the analysis; understand the strategies; buy into those strategies; and, help to make them happen.
I know it’s a little oversimplified, but it’s just good business practice extended to a larger scale. Would it work? Absolutely, as long as we can create leadership at “the top” – at a national food system level – and get the players in the various business units to collaborate and lead in their sectors.
Come on team, let’s do it! It would be interesting, fun and very fulfilling for each of us.
Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at email@example.com