Good After Noon

Team MembersSalman

Muneeb

Amanullah

Abrar

Contents Introduction SWOT Analysis EFE/IFE Matrices SPACE Matrix CP Matrix Grand Strategy Matrix Recommended Strategies Question/ Answer Session

Pilgrims PrideThe chicken meat

Introduction

By Abrar Hussain

Introduction Type Public

Industry Meat Processing

Founded (1946)

Headquarters Greeley, Colorado, United States

Key people Bill Lovette, (CEO)

Intro (Cont) Revenue US$ 6.9 Billion (2010)

Net income US$ 87.1 Million (2010)

Employees 56,000

Parent JBS

Website www.pilgrims.com

Intro (Cont) Pilgrim's is the second-largest chicken producer in the world, with operations in the United States Mexico and Puerto Rico.

Approximately 4,100 contract growers supply poultry for the company's operations. Pilgrim's has 32 feed mills and 40 hatcheries supporting their plants. The company exports chicken products to customers in approximately 95 countries. They produce 30 million dozen eggs per year.

Purchased by JBS S.A. On September 17, 2009 was announced the purchase of 64% of the shares of Pilgrim's Pride by Brazilian multinational JBS S.A. the largest meat processor in the world and the largest by revenue, so that the monitoring has been the parent company of Pilgrim's Pride. As a result, Pilgrim's Pride closed its corporate offices in Texas and Georgia and moved its headquarters to Greeley, Colorado; the closings were scheduled to occur within 60 days of April 12, 2010. During the process, 213 job cuts occurred. About 160 of the cuts occurred at the headquarters in Pittsburg, Texas and at a location in nearby Mt. Pleasant, Texas. Other positions losing jobs included sites in Atlanta, Dallas, and Broadway, Virginia.

Bo. Pilgrim(with his Product)

Our Values

At Pilgrim's, everything we do, every day, is done with our mission in focus and our values in mind.

Vision

To be a world-class chicken company--better than the best.

Mission StatementTo be the best in what we set out to do, totally focused on our business, ensuring the best products and services to our customers, solidity to suppliers, satisfactory profitability for shareholders and the certainty of a better future for all employees.

Mission Statement (Cont)The story is not end up with a mission statement but we are taking it as MISSION rather than just (writing) a mission statement.Said by Bo. Pilgrims

Growing through acquisition 1990 In the 1990s, Pilgrim's Pride continued its growth, acquiring Green Acre Foods, Inc. in Texas.

2001 Fast-forward to the acquisition of WLR Foods, Inc., in 2001, which expanded the company's sales and marketing capabilities from coast to coast,

2003 Purchase of ConAgra's chicken division in 2003, doubled the size of the company and helped generate record sales and earnings growth for Pilgrim's Pride.

Growing through acquisition (Cont) December 27, 2006: On December 27, 2006, Pilgrim's Pride completed the acquisition of Atlanta-based Gold Kist. With the addition of Gold Kist, Pilgrim's became the world's leading chicken company in terms of production and the fourth-largest U.S. meat protein company by revenues.

2009: JBS USA, a unit of JBS S.A. in Brazil, acquired 64% of Pilgrim's stock in December 2009.

Products Boneless Skinless Breast with Rib Meat Hickory Smoked Chicken Bacon Quick & Lean Boneless Skinless Chicken Breasts Quick & Lean Breast Tenderloins Whole Chicken

Strategic Analysis of Pilgrims Pride

SWOT AnalysisBy Muneeb Arsalan

SWOT ANALYSIS The following SWOT analysis is intended to examine Pilgrim s pride internal strengths and weaknesses and link them to external opportunities and threats with the aim of selecting a strategy to pursue.

SWOT Analysis Strengths Weaknesses Opportunities Threats

STRENGTHS Pilgrim s Pride position as the largest poultry producer in the US and Puerto Rico and 2nd largest in Mexico, which is the Company s primary benefit. The Company is diversified in terms of poultry products, customer type and markets. The Company sells to both fresh and prepared poultry products to foodservice customers and retail customers24

STRENGTHS (Cont) Pilgrim s was named to fortune s (list of America s most admired companies) for the fifth consecutive years. Relationship with JBS USA. In addition to cost savings through the integration of certain corporate functions and the rationalization of facilities, their relationship with JBS USA allows them to enjoy several advantages given its diversified international operations and strong record in commodity risk management. Pilgrim s has strategic advantage of Production and distribution capacities near the Mexican border. Pilgrim s uses vertical integration model by the entering in boiler industry. Americans are willing to pay much higher prices for white breast meat.

Weaknesses Despite its position as the market share leader, the Company has several weaknesses; lack of protein diversification, and high debt burden. Compounding this problem is that its two largest competitors (Tyson and Sanderson) they are diversified in other proteins as well. Another weakness is the significant debt burden brought about by the acquisition of Gold Kist.

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Opportunities Chicken prices are a function of market supply and demand. Because Pilgrim s Pride controls 25% of the market, they are able to impact total market supply by changing their production rates. The Company s size provides two primary opportunities: well positioned to increase penetration in prepared foods and ability to move market prices. As a nationwide poultry producer, the Company s distribution network gives them access to the entire US market. Pilgrim s Pride is able to leverage their footprint to compete for large contracts. Chicken consumption surpassed beef consumption.27

Opportunities (Cont) Demand of chicken relative to other meats is increasing. Pilgrim s pride have also the opportunity to jump in (biodiesel) fuel industry. US per capita consumption of chicken is very high as compared with other meat. Worldwide food demand is increasing. Per capita consumption of protein is predicting to grow 25% in 25 years.

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Threats The poultry industry is highly dependent on macroeconomic forces that determine both feed costs (the largest cost component) and chicken prices. Labor retention, working condition ,labor health and safety issues, pollution and waste generated in operation are also highly affecting the operations. Natural disaster(earth quake, hurricane)as well as different diseases like bird-flu (as was in 2006) Increasing price of feeds. Many of new competitor entering in this market.29

Threats (Cont) The feed (corn) cost is unpredictable. High turnover rate because of not having a good working environment. High injury rate. Out of every 7 poultry workers was injured on the job, more than double the average for all the private industries. As the price of petroleum is high, the usage of alternative fuel becomes high then more and more corn is diverted to the production of ethanol, due to which the feed (corn) for chicken becomes high.

External Factor Evaluation(EFE) matrix External Factor Evaluation (EFE) matrix method is a strategic-management tool often used for assessment of current business conditions. The EFE matrix is a good tool to visualize and prioritize the opportunities and threats that a business is facing.

EFE Matrix Vs IFE Matrix The major difference between the EFE matrix and the IFE matrix is the type of factors that are included in the model. While the IFE matrix deals with internal factors, the EFE matrix is concerned solely with external factors.

External factors Investor Hesitation Brand Image Strong Competitors Higher Feed costs Birds Diseases Forward Integration Start Fast Food Entering into Beef Business Business in Asia Western Culture Forward Contracts

KEY EXTERNAL FACTORS

WEIGHT

RATING

WEIGHTED SCORE

OPPORTUNITIESForward Integration Start Fast Food Entering into Beef Business Business in Asia Western Culture Forward Contracts 0.13 0.15 0.12 0.10 0.09 3 4 3 2 2 0.39 0.60 0.36 0.20 0.18

THREATSInvestor Hesitation Brand Image Strong Competitors Higher Feed costs Birds Diseases Total 0.08 0.09 0.08 0.07 0.09 1.00 2 2 3 2 3 0.16 0.18 0.24 0.14 0.27 2.71

Internal factors Product Quality Company Image Production Capacity Strong Distribution Channel Energetic Product Human Resource Brand Reputation Inventory Turnover Financial Position High Investment Negative Publicity Top Management Issue Advertisement

Key FactorsSTRENGTHSProduct Quality Company Image Production Capacity Strong Distribution Channel Energetic Product Human Resource Brand Reputation Inventory Turnover

Weight

Rating

Score

0.15 0.10 0.09 0.09 0.08 0.07 0.10 0.08

3 4 3 3 3 2 3 2

0.45 0.40 0.27 0.27 0.24 0.14 0.30 0.16

WEAKNESSFinancial Position High Investment Negative Publicity Top Management Issue Advertisement Total 0.05 0.06 0.05 0.04 0.04 1.00 1 1 2 2 2 0.05 0.06 0.10 0.08 0.08 2.60 36

SPACE Matrix

By AmanULLAH Tariq

Strategic Position & Action Evaluation Matrix (Space Matrix)

Space Matrix (Cont) It is a management tool used to analyze a company. It is used to determine what type of a strategy a company should undertake The SPACE matrix can be used as a basis for other analyses, such as the SWOT analysis.

Space Matrix (Cont) Space matrix have four quadrants and two dimensions Quadrants Aggressive Conservative Defensive Competitive

Space Matrix (Cont) Two Dimensions Internal Dimensions Financial Strength (FS) Competitive Advantage (CA)

External Dimensions Environmental Stability (ES) Industry Strength (IS)

Space MatrixConservative FS+6 +5 +4 +3 +2 +1

Aggressive

CA-6 -5 -4 -3 -2 -1 -1 -2 -3 -4 +1 +2 +3 +4 +5 +6

IS

Defensive

-5 -6

Competitive ES

Y axis of (Space Matrix)Internal Strategic PositionFinancial Strength (FS)

Return on investment Leverage Liquidity Working capital Cash flow

+1 +2 +1 +2 +1

Total Average

1.4

Y axis of (Space Matrix)External Strategic PositionEnvironmental StabilityTechnological changes Rate of inflation Demand variability Price range of competing products Barriers to entry in chicken industry Ease of exit from market Competitive pressure Price elasticity of demand Risk involved in business 1 1 1 2 1 2 3 2 4

Total

- 1.88

X axis of (Space Matrix)External Strategic Position Industry Strength (IS)Growth potential Profit potential Financial stability Technological know-how Resource utilization Ease of entry into market Productivity, capacity utilization 4 3 1 2 2 3 2 2.42

Total

X axis of (Space Matrix)Internal Strategic Position Competitive Advantage (CA) Market share Product quality Product life cycle Customer loyalty Competitions capacity utilization Technological know-how Control over suppliers & distributors 2 4 1 1 2 3 3 - 2.28

Total

Calculations (of SPACE Matrix) X Axis IS = 2.42 CA = 2.28 X axis = 2.42 2.28 = 0.14

Y Axis FS = 1.4 ES = 1.88 Y axis = 1.4 1.88 = -0.48

Space MatrixConservative FS+6 +5 +4 +3 +2 +1

Aggressive

CA-6 -5 -4 -3 -2 -1 -1 -2 -3 -4 +1 +2 +3 +4 +5 +6

IS

Defensive

-5 -6

Competitive ES

Salman Bahadar Khan

Competitive Profile Matrix (CPM)

CPM (Cont) Pilgrims Pride main competitor is Tyson Foods, other competitors are Sanderson Farms Perdue Farms Bachoco Mountaire Farms Wayne Farms

Competitive Profile MatrixPilgrims Pride Tyson Foods

CSFProduct Quality Price Competition Management Market Share Advertising Global Expansion Distribution Financial Position Customer Loyalty Total

Weight0.17 0.07 0.10 0.12 0.05 0.13 0.12 0.10 0.14 1.00 4 2 4 4 3 3 3 2 4

Rating

Score0.68 0.14 0.4 0.48 1.5 0.39 0.36 0.20 0.56 4.71 4 2 3 4 3 2 2 3 3

Rating

Score0.68 0.14 0.3 0.48 1.5 0.26 0.24 0.30 0.42 4.32

Grand Strategy Matrix

Grand Strategy Matrix Grand Strategy Matrix is very useful instrument for creating different and alternative strategies for an organization. Grand matrix has four quadrants; each quadrant contains different sets of strategies and the entire firms along with their respective divisions must fall in one of the quadrant. This matrix has two dimensions (competitive position and market growth).

Grand Strategy Matrix (Cont)

Grand Strategy Matrix (Cont) Quadrant I Quadrant II Quadrant III Quadrant IV

Quadrant I Companies positioned in this quadrant have very strong strategic position. These firms focus on their established competitive advantage (CA) and take advantage of it as long as it allows them. These companies must concentrate on the existing market by adopting the set of product development, market development and market penetration strategies. Organizations that fall in quadrant 1 have focus on a single product and can go for related diversification strategy to minimize the risk related to limited product line.

Quadrant I (Cont) Strategies to adopt: Intensive Strategies Product development Market development Market penetration strategies

As focusing on single product so can go for diversification strategies If have resources can go for vertical, and horizontal strategies.

Quadrant II Firms laying in this quadrant have the rapid growing industry but can not fight competently. They must evaluate their existing approach in the market place, need to know why they are ineffective in the market and must come up with a strategy to improve their strategic position.

Quadrant II (Cont) Strategies to adopt: Intensive Strategies (for growing industry) Market Penetration Market Development Product Development

Horizontal Integration (If Co don t have CA) Liquidation (For acquisition only)

Quadrant III All those firms which fall in this quadrant have slow growth market and have relatively weak position. Firms have to make noticeable modifications to sustain their position.

Quadrant III (Cont) Strategies to adopt: Firms in this quadrant can adopt defensive strategies. Retrenchment (for diversification) And the last option for these type of firms are Divestiture Liquidation

Quadrant IV Companies competing in this quadrant have slow growth industry but have a strong competitive position. These firms can diversify into different untapped businesses by utilizing their existing resource.

Quadrant IV (Cont) Facing restricted internal growth such firms can adopt the following strategies: Diversification Concentric (+ing new, related products) Horizontal (+ing new, unrelated products for existing customers) Conglomerate (+ing new, unrelated products for new customers)

JV (to fulfill internal growth)

In which Quadrant Pilgrims Pride Lying, Answer???

Pilgrims Pride Position

Recommended Strategies

Recommended Strategies Intensive Strategies Product development Market development Market penetration strategies

Diversification Strategies Concentric (+ing new, related products) Horizontal (+ing new, unrelated products for existing customers)

Recommended Strategies Horizontal Integration If Pilgrim Pride acquisition the Tyson Food, then about 80% of the US market will be captured by Pilgrims. It may also make a JV with the rival firms.

And for acquisition it may also adopt the retrenchment or divestiture strategy for generating funds.