Perdue Farms

Strategic Management
11/1/2012 SZABIST Assignment # 03

Case Study (Summary and Q/A)

Enal Rauf Godil (1225112) Jamshaid Ali Shah (1225116) Group Members: Afaque Ahmed Memon (1225102) Zuhaib Hassan Khaskheli (1225139) Program Academic Year: MBA D 1-C Fall 2012

STRATEGIC MANAGEMENT Assignment # 03 Case Summary

Perdue Farms is a major chicken processing company based in Salisbury, Maryland, United States. Today it has annual sales in excess of $4.6 billon. The co mpany was founded in 1920 by Arthur Perdue with his wife, Pearl Perdue, who had been keeping a small flock of chickens. The company started out selling eggs, and then in 1925, Perdue built the company's first hatchery, and began selling layer chicks to farmers instead of only eggs for human consumption. His son Frank Perdue joined the company in 1939 at age 19 after dropping out of college. In the 1940s, the company made a transition from selling layer chicks to broiler chickens.

After World War II, the company also began contracting with local farmers to raise its birds and supplying chickens for processing as well as opening a second hatchery in North Carolina during this period. Perdue entered the grain and oilseed business by building grain receiving and storage facilities and Maryland's first soybean processing plant. In 1968 the company began operating its first poultry processing plant in Salisbury. This move had two effects; it gave Perdue Farms full vertical integration and quality control over every step from egg and feed to market as well as increasing profits which were being squeezed by processors. This move enabled the company to differentiate its product, rather than selling a commodity. In 1991, Frank's son Jim Perdue was named Chairman, becoming the third generation of leaders from the Perdue family. Beginning its ninth decade of growth, Perdue is still family owned and operated. Privately held and family-run for three generations, the company employs more than 22,000 associates and partners w ith more than 2,400 independent farm families all who share in the commitment to quality that has guided the company since its founding in 1920.

STRATEGIC MANAGEMENT Assignment # 03

Perdue branded chicken and turkey products are sold in supermarkets, grocery stores and quality butcher shops in major consumer markets, where they are often ranked as number one in consumer preference. To meet the demands of its growing business, Perdue has invested over $40 million in innovative business systems.

At Perdue Farms incorporated success both domestically and internationally is a result of the right mix of tradition and innovation, with the right team of people. The mission of Perdue farm is to enhance the quality of life with great food and agricultural products. By staying true values of Quality, Integrity, Trust, and Teamwork, they are confident that their customers around the globe receive the highest quality products and services. Also, their mission is to create value of their products and services that will establish Perdue as the preferred global food supplier. Focusing on generating innovative, value-added products and providing services that exceed customers' expectations is the driving force behind their growth. In turn, Perdue's associates, customers, suppliers, and partners have become one team, supplying world markets with valueadded and commodity products.

Therefore, this case study provides us a lesson that Mr. Arthur Perdue started this small business, but due to his commitment and hard work, he was able make this business successful. Also this case tells us that when new blood entered into business, he tried to bring innovation in the business. This provided the business a new direction. Commitment of three generations has made a small business into a billion dollar industry. Therefo re, the owner of Perdue farms, believe that they want become so easy to do business with their customers, so that they wont have any reason to do business with anyone else.
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http://en.wikipedia.org/wiki/Perdue_Farms

STRATEGIC MANAGEMENT Assignment # 03

1. What strategy should Perdue farm follow now? In order to further grow, Perdue farms should take following measures: It should form an international management team and expand international operations in China and purchase many small Mexican producers, which will further consolidate the industry. It can also expand its operations to India and Pakistan, where poultry business has a scope of growth and also a massive demand for it. It should enter in long term strategic partnerships with food service providers to expand their market share in the food service industry. 2 It should establish strategic partnerships with national supermarket chains. Besides entering in to new markets, it should it also work on value addition of its products for example ready to eat meals (tins, pouch) etc. Besides that Muslims around the world use halal meat (Chicken, Mutton, Beef etc), therefore if they create a separate plant for processing the chickens, cow, goats etc and slaughter them in a halal manner, therefore suddenly there target market increase and they would be able serve them as well.

2. What resources and capabilities should Perdue develop to pursue these strategies? In order to pursue the strategies, Perdue farms should have following resources and capabilities In order develop international management teams it should efficient and effective human resource so that culture would be developed in the company that would help lead towards production of high quality products and services. This would also ensure that sa me standards and procedures are followed all around the world.
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KPMG Case Study Competition Preliminary Round Perdue Farms ...www3.telus.net/mikail/KPMG_FINAL.pdf

STRATEGIC MANAGEMENT Assignment # 03

Besides having a good human resource, Perdue farm would also require financial capital in order to start new processing plants. Also when the company is in a growth stage it requires financial resources in order to meet both capital and revenue expenditure.

In order to have strategic alliance with its partners, the information technology must well equip. Therefore, Perdues information system must be harnessed to create a flawless distribution network in combination with a centralized distribution center that will ensure the timeliness of deliveries and enable the tracking of orders while building relationships with partners. Therefore these are strategies, resources and capabilities which would require by Perdue farms to grow further.