Problem Statement
The problem which Joel Salatin, the owner and operator of Polyface is facing is to decide the future of his business. With increasing demand of Polyface products, Salatin has to decide how he will grow his business will it be by moving forward or keeping his commitment of staying a small scale, local market firm. Basically, he is aware of his father’s advice of staying away from running after reckless growth and quick ideas to generate sales. His father had a vision of constantly looking at ideas and ways by effectively using the resources inherent in the land. However, with the increasing demand of customers, Salatin was unable to carry on with the available resources. Salatin being the owner of Polyface has always looked to work with the similar mission of utilizing the available resources to the maximum. But with an increase in demand for Polyface products, he needs to bring new products into his product line to keep up with the industry requirements and staying up with positive food movement.
Joel Salatin has to decide the growth strategy for the farm which can be aligned with the vision of his father who wanted to utilize all the available resources to the maximum. Basically, Salatin is searching the next step for his farm, where he is considering to expand his business at Polyface without changing the nature of business and the operations. He has to decide whether he should acquire more land and if he does go for this option then, who will look after the new place. The above discussed problems have to be considered by Salatin before deciding his future strategy.
Supporting Analysis
Keeping in mind the above discussed problems, Salatin has to decide the future of Polyface. The company has three alternatives to choose from for moving forward with the ever growing demand of Polyface manufactured farm products which are considered by the customers as healthy and valuable. The expected growth rate of Polyface requirement is more than what Salatin anticipated; therefore, the three alternatives for Polyface are as follows:
Alternatives
Work with same Business Philosophy:
The first alternative which Salatin has in relation to moving forward with the future of Polyface is to work along the similar lines where the farm looks to take advantage of animal’s natural inclinations to physiological distinctiveness. Salatin can look to follow the philosophy of his father to stay away from quick and reckless growth and should look for efficient and effective ways of maximum utilizing the inherent land. With the option of staying with the current strategy, Salatin can satisfy the existing customer requirements by providing them with quality products.
With the current setup, Polyface has six full time employees including: Salatin, his wife and his son. About 20% of the farm’s labor hours are being spent on necessary administrative, clerical, and distribution-related tasks, and 80% are being spent on farming activities. However, workers are even hired during the load season as per the demand. With the same strategy ,where Salatin and his employees have always tried to think of utilizing the available resources to increase the overall quality and output of Polyface.
Acquire more Land:
Another option is to acquire more land with similar structure that will fulfill the needs of ever growing customers. The option of having another farm will give Polyface the opportunity to increase the clientele for the farm and increase the revenues and profits for the Polyface. The problem with the execution of this plan where Polyface expands itself by acquiring more land is that it does not have enough employees or experts who can move over to the new place and manage the land. Therefore, Salatin has to decide if he opts for acquiring new land, then he will have to look for new employees and management who will run the farm in a similar fashion. Moreover, if he opts to acquire new land where he can develop similar structure farm, then he will need to have complete control over the supply chain and operational activities.
Acquire Local Farm to Meet Customer Demands:
Salatin in order to grow the farm can acquire another farm in Virginia. By acquiring a similar farm with the synergies of Polyface, the company can expand itself into a larger entity where customer demands can be easily met. With this option, Polyface can grow into a bigger farm and can compete with the demands of the industry. The option of acquiring a small farm with similar services and products can help Polyface manage customer requirements. Acquiring a farm rather than buying a new place with developing a new structure is a good idea, but by going for this option, Salatin can promptly cater customer demands and can develop a better infrastructure and a supply chain network..........
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Deishin by Lee, Stephanie van SICE Source: HBS 22 pages. Publication Date: October 08, 2010. Prod. #: 611001-PDF-ENG
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