Forest R. David, Mississippi State Universit A. Case Abstract !i"#rim$s !ride %&'()*++),''', ---.pi"#rimspride..om/ is a .ompre0ensive b1siness po"i. and strate#i. mana#ement .ase t0at in."1des t0e .ompan$s ear) end 2'', 3inan.ia" statements, .ompetitor in3ormation and more. T0e .ase time settin# is t0e ear 2''2. S133i.ient interna" and externa" data are provided to enab"e st1dents to eva"1ate .1rrent strate#ies and re.ommend a t0ree)ear strate#i. p"an 3or t0e .ompan. Head41artered in !ittsb1r#, Texas, !i"#rims !ride$s .ommon sto.k is p1b"i." traded on t0e 5e- 6ork Sto.k 7x.0an#e 1nder t0e ti.ker smbo" .0x. T0e .ompan exports on" abo1t ,28 o3 its prod1.t "ine. !i"#rim$s !ride s1pp"ies 9F:, :01r.0$s, ;a")Mart, !epsi:o, <1r#er 9in#, =rand$s, :0i"i$s, ;end$s and Lon# Jo0n Si"ver$s. ;it0 2>,+'' emp"oees, !i"#rim?s !ride is a verti.a"" inte#rated prod1.er o3 po1"tr prod1.ts, .ontro""in# t0e breedin# and #ro-in# o3 .0i.kens and t1rkes, and t0e pro.essin#, preparation and pa.ka#in# o3 its prod1.ts. For t0e 2@ -eeks ended Mar.0 (', 2''2, sa"es rose (+ 8 to A,.2@ bi""ion. 5et in.ome rose 3rom A2.& mi""ion to A,>.2 mi""ion. Res1"ts re3"e.t t0e ;LR Foods a.41isition, a 3orei#n ex.0an#e #ain o3 A*&+9 vs. a "oss o3 A,@(9 and a A&.B mi""ion tax bene3it d1e to .0an#es in Mexi.an tax "a-s. Headed b :7C David Hoose, !i"#rim?s !ride :orporation$s net in.ome o3 A(.( mi""ion, or A.'* per s0are, 3or t0e t0ird 3is.a" 41arter ended J1ne 2&, 2''2, represents a A22.' mi""ion de.rease -0en .ompared to t0e prior ear?s t0ird 3is.a" 41arter net in.ome o3 A2+.( mi""ion, or A.@2 per s0are. :HD$s net sa"es 3or t0e t0ird 3is.a" 41arter ended J1ne 2&, 2''2 -ere A@(B., mi""ion, a ,.>8 de.rease -0en .ompared to t0e A@>+.* mi""ion 3or t0e same period "ast ear. Tson Foods a##ressive" .ompetes a#ainst !i"#rim$s in t0is ind1str. !i"#rim$s needs bot0 a domesti. and a #"oba" expansion strate# to #ain 31rt0er e.onomies o3 s.a"e. T0e .ompan a.t1a"" s0o1"d make additiona" a.41isitions to .ompete better a#ainst Tson. :ompanies in Latin or So1t0 Ameri.a t0at are invo"ved in .0i.ken prod1.tion, pro.essin# and marketin# -o1"d be ex.e""ent .andidates. St1dents s0o1"d prepare a t0ree)ear strate#i. p"an 3or :7C Hoose. B. Vision Statement ETo <e a ;or"d :"ass :0i.ken :ompan F <etter T0an t0e <est.G @& C. Mission Statement %proposed/ %.orrespondin# .omponents "isted be"o-/ !i"#rim$s !ride is t0e se.ond)"ar#est 31rt0er pro.essin# .0i.ken .ompan in t0e United States and t0e t0ird)"ar#est domesti. .0i.ken prod1.er and 3o1rt0)"ar#est t1rke prod1.er %2/. ;e prod1.e, pro.ess, and market o1r prod1.ts 3or 3ood servi.e distrib1tors, s1permarkets, and 3ast)3ood .0ains %,/ in t0e United States and Mexi.o %(/. !i"#rim$s !ride "eads t0e ind1str in resear.0 and deve"opment, 3o.1sin# on improvin# #eneti., n1tritiona", and pro.essin# te.0no"o#ies %>/. C1r .ompan$s p0i"osop0 is to .ond1.t a"" operations in a 0i#0" et0i.a" manner %@/. ;e be"ieve t0at t0is p0i"osop0, as -e"" as attention to pr1dent b1siness operations, -i"" ens1re t0e #ro-t0 and pro3itabi"it o3 !i"#rim$s !ride %+/. ;e are dedi.ated to bein# a #ood .orporate .itiHen %B, */ ever-0ere -e .ond1.t b1siness. ;e are .ommitted to providin# a sa3e -ork environment 3or o1r emp"oees %&/. ,. :1stomers 2. !rod1.ts or servi.es (. Markets >. Te.0no"o# +. :on.ern 3or s1rviva", #ro-t0, pro3itabi"it @. !0i"osop0 B. Se"3).on.ept *. :on.ern 3or p1b"i. ima#e &. :on.ern 3or emp"oees D. Class Discussion Questions and Issues ,. To -0at extent 0ave !i"#rim$s !ride and its .ompetitors been ab"e to es.ape t0e .ommodit aspe.t t0at 3or man ears 0as p"a#1ed t0e ind1strI :an it do more in t0e 31t1reI :0i.ken .ompanies 1sed to operate in .."es o3 abo1t t0ree ears, #oin# 3rom an 1nders1pp" to a #"1tted market and ba.k to an 1nders1pp". Toda$s ind1str "eaders 0ave bene3ited 3rom t0eir abi"it to estab"is0 brand re.o#nition and pre3eren.e. T0e 3irms t0at 0ave s1rvived and #ro-n 0ave been t0e e33e.tive marketers in an ind1str t0at traditiona"" 0as been prod1.tion)oriented. !i"#rim$s !ride$s ads, 1sin# E<oG as t0eir spokesman, 0ave been parti.1"ar" e33e.tive. Jn t0e past, Tson 0as 1sed Tom T. 0a"", a .o1ntr)-estern star, as t0eir spokesman. E<oG !i"#rim 0as promoted 0is .0i.ken as "eaner and -0iter. Frank !erd1e, o3 !erd1e Farms, promotes 0is .0i.kens as p"1mper and e""o-ier, ."aimin# t0at t0e e""o- si#ni3ies 0is .0i.kens are best 3ed %e.#., 0andpi.ked mari#o"d peta"s and a more expensive diet/. A"t0o1#0 it is tr1e t0at ant0in# .an be di33erentiated, t0ere are sti"" man .ons1mers, resta1rant .ooks, and .0e3s t0at be"ieve t0at a .0i.ken is a .0i.ken. B' 2. Has t0e demand 3or .0i.ken be#1n to "eve" o1t in .omparison to ot0er meatsI Jt ma be t0at t0e demand 3or .0i.ken re"ative to ot0er meats 0as peaked. F1t1re #ro-t0 .o1"d be "imited to pop1"ation #ro-t0 and in.reased demand 3or pro.essed, pa.ka#ed, and va"1e)added .0i.ken items. <ot0 t0e bee3 and pork ind1str 0ave stepped 1p t0eir primar advertisin#. To t0is -riter$s kno-"ed#e, t0e .0i.ken ind1str 0as never en#a#ed in primar advertisin#. Cn t0e ot0er 0and, providin# no maKor sa"mone""a s.ares, t0e nation$s 0ea"t0 .on.erns and pri.e attra.tiveness ma .ontin1e to 31e" t0e demand 3or .0i.ken. T0e bee3 ind1str 0as attempted to .ombat its ne#ative 0ea"t0 ima#e t0ro1#0 nationa" .ampai#ns, s1.0 as E7at More <ee3,G and ERea" Food 3or Rea" !eop"e,G 1sin# noted .e"ebrities. Some experts are predi.tin# t0at bee3 -i"" be.ome t0e .ons1mer$s n1mber one .0oi.e in t0e next de.ade as it -as in t0e ,&B's. Resear.0ers are .1rrent" .ond1.tin# tests on a 3eed additive t0at -i"" "o-er 3at .ontent in .att"e b 2'8. T0e 5ationa" !ork !rod1.ers :o1n.i" %-0i.0 represents ,'',''' 0o# 3armers/ 0as imitated po1"tr$s #ood ima#e b promotin# pork as Et0e ot0er -0ite meat.G T0e :o1n.i" 3i#1res t0at i3 bee3 .an promote itse"3 as Erea" 3ood 3or rea" peop"eGL 3att mi"k .an ."aim it Edoes a bod #oodGL and e##s, s-immin# in .0o"estero", .an be bi""ed as Ein.redib"e and edib"eG, t0en pork .an be .a""ed a En1tritio1s -0ite meat.G T0e !ork !rod1.ers :o1n.i" .ites resear.0 s0o-in# t0at -it0 0o# 3at .ontent 0a"ved 3rom t-o de.ades a#o, pork$s 3at and .0o"estero" .ontent is Evirt1a"" e41iva"entG to t0at o3 .0i.ken. T0e a"so s0o- a ."ose .omparison bet-een t0ree o1n.es o3 t0e "eanest .1t o3 .0i.ken %skin"ess breast/ and t0e "eanest .1t o3 pork %trimmed tender"oin/: ( #rams o3 3at and ,>' .a"ories 3or t0e .0i.ken .ompared -it0 > #rams o3 3at and t0e same n1mber o3 .a"ories 3or t0e pork. ;0at t0e are not promotin# is t0at a ()o1n.e servin# o3 t0e avera#e .1t o3 3res0 pork 0as a"most t-i.e as m1.0 3at as a ()o1n.e servin# o3 t0e avera#e .1t o3 .0i.ken and 0as more .a"ories as -e"". Cvera"", it -o1"d appear t0at t0e ear" #ro-t0 in t0e po1"tr ind1str -i"" 3a"" ba.k to a more modest +)@ 8 ran#e. T0is, in "ar#e part, is be.a1se o3 t0e bee3 and pork ind1str$s ad .ampai#n. (. ;0at strate#i. moves m1st !i"#rim$s !ride make to #ro- in t0e 31t1reI
!i"#rim$s !ride m1st .ontin1e to o33er ne- prod1.t 3orms and pa.ka#in# t0at in.rease t0e .onvenien.e and prod1.t versati"it o3 .0i.ken. To #ain a..eptan.e o3 t0ese ne- items, it is s1##ested t0at t0e .ontin1e and even in.rease t0e 1se o3 E<oG in t0eir advertisin#. T0ere are man -as in -0i.0 0e .o1"d be 1sed to promote .ompan prod1.ts %e.#., E<o kno-s .0i.kenG/. T0e s1rvivors in t0e B, ind1str 0ave a"" been t0e s1..ess31" marketers, and t0is is espe.ia"" tr1e 3or va"1e)added "ines. T0e "a-s o3 s1pp" and demand are sti"" o3 1tmost importan.e 3or t0is ind1str. 7ven sma"" varian.es in 3eed .osts .an 0ave a maKor impa.t on pro3its espe.ia"" 3or non)va"1e added items. Jt is eas to s1##est t0at !i"#rim$s !ride s0o1"d expand #eo#rap0i.a"", 0o-ever t0at -o1"d probab" be ver di33i.1"t and expensive. To #ain market s0are in a ne- area, !i"#rim$s !ride -o1"d 0ave to Estea"G market s0are and s0e"3 spa.e 3rom a .ompetitor. Jt took Tson ten ears to #ain t0e M.Dona"d$s a..o1nt. >. :ompare !i"#rim$s !ride strate# to Tson$s. Tson "itera"" d-ar3s t0e rest o3 t0e po1"tr .ompanies. Jt 0as been and .ontin1es to be a ver a##ressive .ompan -0ose prime #ro-t0 strate# is t0ro1#0 a.41isition. Jt a"so 0as diversi3ied into ot0er meats in t0e past: bee3, pork, 3is0. :1rrent", 0o-ever, t0e are divestin# t0emse"ves o3 t0ese and ret1rnin# to t0eir .ore b1siness: .0i.ken. T0e strate#ies o3 a.41isitions and diversi3i.ation 0ave rare" been pra.ti.ed b !i"#rim$s. +. Ana"He t0e -as !i"#rim$s !ride and t0e ind1str s0o1"d be dea"in# -it0 prob"ems s1.0 as bad p1b"i. re"ations, .ases o3 sa"mone""a poisonin#, -orkin# .onditions, and .on.erns o3 #ro-ers. Jnd1str s1pporters aside, it -o1"d appear t0at t0e ind1str 0as done "itt"e to .ombat its prob"ems to date. As t0ese .on.erns be.ome more p1b"i., 0o-ever, it -i"" be.ome ne.essar to address t0em more .onstr1.tive". Sa"mone""a s.ares .rop 1p periodi.a"". To date t0ese s.ares, as -e"" as most o3 t0e ot0er ind1str prob"ems, 0as 0ad "itt"e impa.t on ind1str sa"es. T0is .o1"d .0an#e overni#0t. T0e 3edera" #overnment 0as re.ent" passed "e#is"ation t0at re41ires pro.essors to atta.0 preparation instr1.tions to 3ood and meat prod1.ts. Anot0er .ase o3 an ind1str$s 0avin# to rea.t rat0er t0an bein# proa.tive. 7ven t0o1#0 t0e #ro-ers are sti"" %and in a"" probabi"it -i"" .ontin1e to be/ a "oose" or#aniHed #ro1p, t0e pro.essors need to be proa.tive. T0e need to re.o#niHe t0at t0e need one anot0er 1n"ess t0e pro.essors are -i""in# to ass1me t0e #ro-er$s 31n.tion -it0 31rt0er inte#ration. T0eir re"ations0ip s0o1"d be more positive, and "on#)term F m1.0 "ike t0e re"ations0ips man man13a.t1res 0ave re.ent" estab"is0ed -it0 t0eir s1pp"iers. B2 . !ternal Audit "##ortunities ,. T0ere is in.reasin# demand 3or .0i.ken. 2. T0ere is an in.reasin# demand 3or prepared 3oods. (. 7xportin# andMor pro.essin# .0i.ken to ot0er nations .an be done. >. Te.0no"o# o33ers possib"e improvements. +. Additiona" improvements are possib"e t0ro1#0 #eneti. resear.0. @. !i"#rim$s !ride .an be inte#rated 31rt0er. B. :0i.ken 0as a si#ni3i.ant pri.e advanta#e over ot0er meats. *. T0ere is a ne- treatment to red1.e sa"mone""a in .0i.ks. &. T0e e.onom is in re.ession. $%reats ,. T0e rep1tation o3 .0i.ken ind1str isn$t #ood. 2. T0e ind1str sti"" 0as aspe.ts o3 a .ommodit ind1str. (. T0ere is in.reased #overnmenta" re#1"ation. >. Sa"mone""a s.ares .rop 1p 3re41ent". +. Jnd1str is 0i#0" "abor)intensive. @. ;orkin# .onditions o3 emp"oees 0as re.eived bad p1b"i.it. B. =ro-ers 0ave in.reased bar#ainin# po-er. *. !ro3it is s1bKe.t to pri.e 3"1.t1ations o3 #rain. &. T0ere is stron# .ompetition, espe.ia"" 3rom Tson. ,'. Jnd1str is .0ara.teriHed b s"im pro3it mar#ins. & MA$'I(
)I*+$D ,e- !ternal &actors )I*+$ 'A$I.* SC"' "##ortunities T0ere is an in.reasin# demand 3or .0i.ken. '.'B > '.2* T0ere is an in.reasin# demand 3or prepared 3ood. '.'* > '.(2 7xportin# andMor pro.essin# .0i.ken to ot0er nations .an be done. '.'+ ( '.,+ Te.0no"o# o33ers possib"e improvements. '.'( 2 '.'@ Additiona" improvements are possib"e t0ro1#0 #eneti. resear.0. '.'( 2 '.'@ !ossib"e !i"#rim$s !ride .an be inte#rated 31rt0er. '.'2 ( '.'@ :0i.ken 0as a si#ni3i.ant pri.e advanta#e over ot0er meats. '.'+ ( '.,+ T0ere is a ne- treatment to red1.e sa"mone""a in B( .0i.ks. '.'> 2 '.'* T0e e.onom is in re.ession. '.'( > '.,2 $%reats T0e rep1tation o3 .0i.ken ind1str isn$t #ood. '.'+ ( '.,+ T0e ind1str sti"" 0as aspe.ts o3 a .ommodit ind1str. '.'@ ( '.,* T0ere is in.reased #overnmenta" re#1"ation. '.'> 2 '.'* Sa"mone""a s.ares .rop 1p 3re41ent". '.'@ 2 '.,2 Jnd1str is 0i#0" "abor)intensive. '.'@ 2 '.,2 ;orkin# .onditions o3 emp"oees 0as re.eived bad p1b"i.it. '.'> 2 '.'* =ro-ers 0ave in.reased bar#ainin# po-er. '.'+ 2 '.,' !ro3it is s1bKe.t to pri.e 3"1.t1ations o3 #rain '.'B 2 '.,> T0ere is stron# .ompetition: Tson. '.'& ( '.2B Jnd1str is .0ara.teriHed b s"im pro3it mar#in. '.'* , '.'* $"$A/ 0.00 2.10 Com#etiti2e Pro3ile Matri! Pilgrims $-son *old ,ist Critical Success &actor )eig%t 'ating )S 'ating )S 'ating )S Market s0are '.(' ( '.&' > ,.2' ( '.&' !ri.e .ompetitiveness '.,' ( '.(' ( '.(' ( '.(' Finan.ia" position '.(' 2 '.@' > ,.2' ( '.&' !rod1.t 41a"it '.,' ( '.(' ( '.(' ( '.(' :ons1mer "oa"t '.2' 2 '.>' > '.*' ( '.@' $"$A/ 0.00 2.40 5.60 5.00 &. Internal Audit Cas% Value o3 Pilgrims Pride in 7millions at 02850800 ,. Sto.k0o"ders$ 741it N =ood-i"" A(*' N ' A (*' 2. 5et in.ome x + O A>, x + A 2'+ (. S0are pri.e O A,( M7!S O A,.'( x 5et Jn.ome A>, A +,B >. 51mber o3 S0ares C1tstandin# D S0are !ri.e O >, x A,( A +(( Met%od A2erage 7 906 &inancial 'atio Anal-sis :;ul- 2002< Jnd1str: Food !ro.essin# Se.tor: :ons1merM5on):."i.a" B> So1r.e: ---.investor.sto.kpoint..om Pilgrims Pride Industr- Sector SandP 400 Valuation 'atios !M7 Ratio %TTM/ ,>.BB 22.BB 2+.2' 2+.2+ !M7 Hi#0 ) Last + 6rs 2B.,& >'.(, +(.,@ >&.B& !M7 Lo- ) Last + 6rs >.'B ,+.@B ,&.(' ,B.(* <eta '.++ '.(, '.>, ,.'' !ri.e to Sa"es %TTM/ '.,* ,.>* 2.>B 2.@B !ri.e to <ook %MRP/ ,.,B +.(' B.,> >.,& !ri.e to Tan#ib"e <ook %MRP/ ,.,B B.2@ ,(.+, @.+& !ri.e to :as0 F"o- %TTM/ (.B@ ,*.,' ,*.@+ ,B.(* !ri.e to Free :as0 F"o- %TTM/ *.(( ,&.2& >'.(' ('.*@ 8 C-ned Jnstit1tions ,*.&& >+.,+ +>.>@ @'.@@ Di2idends Dividend 6ie"d '.+( 2.,& 2.(' 2.2* Dividend 6ie"d ) + 6r Av# '.+' 2.'2 ,.&B ,.(@ Dividend + 6r =ro-t0 Rate *.>+ @.B' *.,( B.&2 !ao1t Ratio %TTM/ B.** >'.2( >+.(' 2&.@B *ro=t% 'ates > Sa"es %MRP/ vs Ptr , 6r A#o ),.(+ *.>( @.B, ,.>B Sa"es %TTM/ vs TTM , 6r A#o 2&.*2 ,&.>B &.*& ,.2+ Sa"es ) + 6r =ro-t0 Rate ,>.22 +.>@ >.@> ,,.>> 7!S %MRP/ vs Ptr , 6r A#o )*@.&& 2&.B@ 2'.,* ,'.>2 7!S %TTM/ vs TTM , 6r A#o )2'.*& 2'.+B ,2.'2 '.2@ 7!S ) + 6r =ro-t0 Rate '.B+ @.,B B.>& *.>@ :apita" Spendin# ) + 6r =ro-t0 Rate 2@.*> ,.>@ '.(@ &.(* &inancial Strengt% P1i.k Ratio %MRP/ '.(( '.+& '.+B ,.,2 :1rrent Ratio %MRP/ ,.+> ,.(* ,.,* ,.@+ LT Debt to 741it %MRP/ ,.'> ,.(( '.&B '.@* Tota" Debt to 741it %MRP/ ,.2' ,.+& ,.2> ,.'> Jnterest :overa#e %TTM/ 5M @.(* ,(.2+ &.(@ Pro3itabilit- 'atios > =ross Mar#in %TTM/ *.*, (&.2* >*.,( >@.&' =ross Mar#in ) + 6r Av# ,'.B2 (*.(, >B.>& >*.,B 7<JTD Mar#in %TTM/ @.>& ,(.@2 ,*.+2 2'.'2 7<JTD ) + 6r Av# *.,+ ,>.,' ,*.2+ 2,.*> Cperatin# Mar#in %TTM/ (.B@ ,,.'& ,+.(2 ,B.,& Cperatin# Mar#in ) + 6r Av# +.B' ,,.'( ,>.B& ,*.,, !re)Tax Mar#in %TTM/ 2.(+ &.>> ,>.>, ,>.@2 !re)Tax Mar#in ) + 6r Av# >.2* &.@B ,(.&, ,B.'> 5et !ro3it Mar#in %TTM/ ,.2> @.22 &.@B &.@2 5et !ro3it Mar#in ) + 6r Av# (.>( @.'+ *.&> ,,.2' 733e.tive Tax Rate %TTM/ ,'.&, (+.>, (>.@( ((.2+ 733e.tive Tax Rate ) + 6r Av# ,&.2B (B.@* (@.*' (+.@& Management 33ecti2eness > Ret1rn on Assets %TTM/ 2.@( B.'B ,'.2& @.'B Ret1rn on Assets ) + 6r Av# B.@@ *.&* ,'.*B B.&B Ret1rn on Jnvestment %TTM/ (.(@ ,'.'> ,>.&2 &.B& B+ Ret1rn on Jnvestment ) + 6r Av# &.+* ,(.*+ ,@.@( ,2.BB Ret1rn on 741it %TTM/ *.,+ 22.>+ ('.'> ,B.+B Ret1rn on 741it ) + 6r Av# 2'.>@ 2&.+@ ((.+* 2,.B, 33icienc- Reven1eM7mp"oee %TTM/ ,'(,>B@ (+B,+(* >'(,**2 >*2,&@& 5et Jn.omeM7mp"oee %TTM/ ,,2B& ,&,*(+ >,,((, B*,,+> Re.eivab"e T1rnover %TTM/ 2+.(+ ,2.>, ,(.,+ &.@+ Jnventor T1rnover %TTM/ B.@& B.2' @.*+ ,'.', Asset T1rnover %TTM/ 2.,( ,.(B ,.,* '.&& ===.in2estor.stoc?#oint.com ;ul- 2002 Strengt%s@ ,. T0ere is a broad ran#e o3 .0i.ken prod1.ts. 2. =eo#rap0i.a" "o.ation o3 !i"#rim$s !ride. (. E<oG 0as experien.e and entreprene1ria" spirit. >. T0ere is brand a-areness t0ro1#0 marketin#. +. 5et sa"es in 2''' -ere approximate" A,.+ bi""ion. @. !i"#rim$s !ride is 2 nd "ar#est in ind1str in Mexi.o. B. A.41isition o3 ;LR, Foods. *. Jt .an deve"op and prod1.e ne- prod1.ts to meet spe.i3i. .1stomer$s needs. &. !i"#rim$s is t0e 2 nd "ar#est .0i.ken pro.essor in t0e United States. )ea?nesses@ ,. :ost o3 #oods so"d is 0i#0. 2. Jt is not invo"ved in an ot0er meat ind1str. (. T0ere -as a ne#ative 2'8 in.ome #ro-t0 in 2'''. >. Lo- pro3itabi"it mar#ins. +. A.41isitions present a 3inan.ia" di33i.1"t. I& MA$'I(@ ,e- Internal &actors )I*+$D )I*+$ 'A$I.* SC"' Strengt%s@ A broad ran#e o3 prod1.ts .,2 > .>* =eo#rap0i.a" "o.ation .'@ ( .,* <o$s experien.e .'* > .(2 <rand a-areness .'* > .(2 A,.+ bi""ion sa"es .'@ > .2> B@ Mexi.o position .'* ( .2> A.41isition o3 ;LR .'@ ( .2> Deve"ops ne- prod1.ts .'@ > .2> 2nd "ar#est prod1.er .,2 ( .(@ )ea?nesses@ Hi#0 .ost o3 #oods so"d .,' 2 .2' :0i.ken on" .'2 ( .'@ %)2'8/ in.ome #ro-t0 2''' .'> 2 .'* Lo- pro3its .'@ 2 .,2 A.41isitions di33i.1"t .'@ 2 .,2 $"$A/ 0.00 5.20 *. $")S Anal-sis@ S$'.*$+S@ ,. T0ere is a broad ran#e o3 .0i.ken prod1.ts. 2. =eo#rap0i.a" "o.ation o3 !i"#rim$s. (. E<oG 0as experien.e and entreprene1ria" spirit. >. Hi#0 brand a-areness t0ro1#0 marketin#. +. 5et sa"es in 2''' -ere approximate" A,.+ <i""ion. @. !i"#rim$s 2 nd "ar#est in Mexi.o. B. A.41isition o3 ;LR *. Jt .an deve"op and prod1.e ne- prod1.ts. &. !i"#rim$s is t0e 2nd "ar#est in U.S. )A,.SSS@ ,. Hi#0 .ost o3 #oods so"d. 2. Jt is not invo"ved in an ot0er meat ind1str. (. A ne#ative 2'8 in.ome #ro-t0 in 2'''. >. Lo- pro3it mar#ins. +. A.41isitions a 3inan.ia" di33i.1"t. "PP"'$A.I$IS@ ,. Jn.reasin# demand 3or .0i.ken. 2. Jn.reasin# demand 3or prepared 3oods. (. 7xportin# andMor pro.essin# .0i.ken to ot0er nations is avai"ab"e. >. Te.0no"o# o33ers possib"e improvements. +. Jmprovements t0ro1#0 #eneti. resear.0. @. !i"#rim$s .an be inte#rated 31rt0er. B. :0i.ken 0as a si#ni3i.ant pri.e advanta#e over ot0er meats. S8" S$'A$*IS@ ,. 7xpand a.ross United States. %S2, C,/ 2. Diversi3 into ot0er meats. %S>, C&/ (. Deve"op ne- pro.essed 3oods. %S*, C2/ >. Jn.rease resear.0 and deve"opment. %S&, C>/ +. Market Esa3erG .0i.ken. %S+, C*/ )8" S$'A$*IS@ ,. Diversi3 into ot0er meats. %;2, C&/ 2. A.41ire s1pp"iers. %;,, C@/ (. Seek to be a.41ired b Tson. %;(, ;>, C2/ >. La1n.0 a premi1m "ine o3 prepared .0i.ken prod1.ts. %;,, ;>, C2/ +. 7stab"is0 a pro.essin# p"ant in t0e eastern U.S. %;+, C,/ BB *. 5e- treatment to red1.e sa"mone""a in .0i.ks. &. 7.onom in re.ession. $+'A$S@ ,. T0e rep1tation o3 .0i.ken ind1str bad. 2. T0e ind1str is "ike a .ommodit ind1str. (. T0ere is in.reased #overnment re#1"ation. >. Sa"mone""a s.ares .rop 1p 3re41ent". +. Jnd1str is 0i#0" "abor) intensive. @. ;orkin# .onditions o3 emp"oees is bad. B. =ro-ers 0ave in.reased bar#ainin# po-er. *. !ro3it is s1bKe.t to pri.e 3"1.t1ations o3 #rain. &. T0ere is stron# .ompetition: Tson. ,'. Jnd1str is .0ara.teriHed b s"im pro3it mar#in. S8$ S$'A$*IS@ ,. Mer#e -it0 Tson. %S2, T&/ 2. Jn.rease e33i.ien.M.apa.it o3 existin# 3a.i"ities. %S&, T&, T,'/ (. Jn.rease marketin#. %S>, C&/
)8$ S$'A$*IS@ ,. Mer#e -it0 !erd1e. %;>, T&/ 2. Jn.rease advertisin#. %T,, T2/ (. Se"" additiona" .ommon sto.k. %;+, T&/ +. SPAC Matri!@ y-axis Finan.ia" stren#t0 N> N, best to N@ -orst 6 axis: > N %)2/ O 2 7nvironmenta" stabi"it )2 )@ -orst to F, best x-axis :ompetitive advanta#e )( )@ 1nstab"e to F, stab"e D axis: > N %)(/ O , Jnd1str stren#t0 N> N, best to N@ -orst :onservative FS A##ressive :A JS B* De3ensive 7S :ompetitive I. *rand Strateg- Matri! RA!JD MAR97T =RC;TH P1adrant JJ P1adrant J Pilgrims ;7A9 STRC5= :CM!7TJTJQ7 :CM!7TJTJQ7 !CSJTJC5 !CSJTJC5
,. Matri! Anal-sis and $")S Summar- Alternati2e Strategies I SPAC *'A.D C"A.$ For-ard Jnte#ration D D 2 <a.k-ard Jnte#ration D D 2 HoriHonta" Jnte#ration D D 2 Market !enetration D D D 2 Market Deve"opment D D 2 !rod1.t Deve"opment D D D 2 :on.entri. Diversi3i.ation D D 2 :on#"omerate Diversi3i.ation D 2 HoriHonta" Diversi3i.ation D 2 Joint Qent1re , Retren.0ment Divestit1re Li41idation *' /. QSPM Strategic Alternati2es C'I$ICA/ &AC$"'S )eig%t !#and Ad2ertise AS $AS AS $AS