Case Study Description of Farmland Investing: A Technical Note
To maximize their effectiveness, color cases should be printed in color.This note seeks to provide an overview of farmland investing; the investment thesis behind investing in agriculture, how and why investors would choose farmland, and the general risks and return characteristics of this asset class. In recent years, a growing number of individual and institutional investors have allocated a portion of their capital into agricultural farmland. Private investors, public companies, and sovereign wealth funds are now all currently purchasing and selling large amounts of farmland for profit.
Authors :: Ray A. Goldberg, Arthur I Segel, Gustavo A. Herrero, Andrew Terris
Swot Analysis of "Farmland Investing: A Technical Note" written by Ray A. Goldberg, Arthur I Segel, Gustavo A. Herrero, Andrew Terris includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Farmland Investing facing as an external strategic factors. Some of the topics covered in Farmland Investing: A Technical Note case study are - Strategic Management Strategies, International business, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Farmland Investing: A Technical Note casestudy better are - – digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing energy prices, increasing government debt because of Covid-19 spendings, there is backlash against globalization,
there is increasing trade war between United States & China, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Farmland Investing: A Technical Note
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Farmland Investing: A Technical Note case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Farmland Investing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Farmland Investing operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Farmland Investing: A Technical Note can be done for the following purposes –
1. Strategic planning using facts provided in Farmland Investing: A Technical Note case study
2. Improving business portfolio management of Farmland Investing
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Farmland Investing
Strengths Farmland Investing: A Technical Note | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Farmland Investing in Farmland Investing: A Technical Note Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Farmland Investing: A Technical Note firm has clearly differentiated products in the market place. This has enabled Farmland Investing to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Farmland Investing to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Farmland Investing is present in almost all the verticals within the industry. This has provided firm in Farmland Investing: A Technical Note case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Farmland Investing in the sector have low bargaining power. Farmland Investing: A Technical Note has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Farmland Investing to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Farmland Investing is one of the leading recruiters in the industry. Managers in the Farmland Investing: A Technical Note are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Farmland Investing has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Farmland Investing: A Technical Note HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Farmland Investing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Farmland Investing: A Technical Note Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Farmland Investing has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Farmland Investing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Farmland Investing has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Finance & Accounting field
– Farmland Investing is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Farmland Investing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Farmland Investing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Farmland Investing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Farmland Investing are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Farmland Investing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Farmland Investing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Farmland Investing: A Technical Note | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Farmland Investing: A Technical Note are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Farmland Investing: A Technical Note, is just above the industry average. Farmland Investing needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Farmland Investing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Farmland Investing: A Technical Note can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Farmland Investing: A Technical Note that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Farmland Investing: A Technical Note can leverage the sales team experience to cultivate customer relationships as Farmland Investing is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Farmland Investing: A Technical Note HBR case study mentions - Farmland Investing takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study Farmland Investing: A Technical Note has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Farmland Investing 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Farmland Investing: A Technical Note HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Farmland Investing has relatively successful track record of launching new products.
High cash cycle compare to competitors
Farmland Investing has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Farmland Investing has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Farmland Investing: A Technical Note, in the dynamic environment Farmland Investing has struggled to respond to the nimble upstart competition. Farmland Investing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Farmland Investing has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Farmland Investing products
– To increase the profitability and margins on the products, Farmland Investing needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Farmland Investing: A Technical Note | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Farmland Investing: A Technical Note are -
Manufacturing automation
– Farmland Investing can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Farmland Investing to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Farmland Investing to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Farmland Investing can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Farmland Investing can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Farmland Investing has opened avenues for new revenue streams for the organization in the industry. This can help Farmland Investing to build a more holistic ecosystem as suggested in the Farmland Investing: A Technical Note case study. Farmland Investing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Farmland Investing in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Farmland Investing has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Farmland Investing: A Technical Note - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Farmland Investing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Farmland Investing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Farmland Investing can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Farmland Investing can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Farmland Investing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Farmland Investing is facing challenges because of the dominance of functional experts in the organization. Farmland Investing: A Technical Note case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Farmland Investing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Farmland Investing: A Technical Note suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Farmland Investing has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Farmland Investing: A Technical Note External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Farmland Investing: A Technical Note are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Farmland Investing in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Farmland Investing in the Finance & Accounting sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Farmland Investing needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Farmland Investing: A Technical Note, Farmland Investing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Technology acceleration in Forth Industrial Revolution
– Farmland Investing has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Farmland Investing needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Farmland Investing is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Farmland Investing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Farmland Investing high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Farmland Investing needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Farmland Investing can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Farmland Investing can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Farmland Investing: A Technical Note .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Farmland Investing business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Farmland Investing: A Technical Note Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Farmland Investing: A Technical Note needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Farmland Investing: A Technical Note is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Farmland Investing: A Technical Note is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Farmland Investing: A Technical Note is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Farmland Investing needs to make to build a sustainable competitive advantage.