Tyson food inc.

Essay by EssaySwap ContributorUniversity, Master's February 2008

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Introduction Tyson Foods, Inc., is the world's largest fully integrated producer, processor, and marketer of poultry-based food products whose strategy is to "Segment, Concentrate, and Dominate." The firm is vertically integrated (with seven specific levels of activity), contains numerous subsidiaries, has achieved successful acquisitions, operated in a competitive environment that is heavily regulated and scrutinized, and financially stable. At issue herein is the question of how Tyson can continue to enjoy competitive advantages over its rivals (ConAgra and Hudson Foods being principal in this category), to capitalize upon its vertical integration, and to maximize its position as the lowest-cost producer of value-added products in the market segment.

Analysis of Environment, Firm, Current Strategy, Competition Your firm participates in an industry that is characterized as highly vertically integrated and in which (since the 1950s) poultry farmers combined feed mills and processing plants to create efficient operating complexes. Three distinct processed poultry met products are produced: fresh carcass products (i.e.,

whole bird and parts; formed products; emulsified products. Producers sell directly to large grocery and restaurant chains. From 1987 to 1991, poultry processing shipments have increased from $14.913 million to a total of $21.703 million, exhibiting a steady percent change increase that peaked in 1988-89 at +22.2 percent and is not at +3.7 percent. Export value increased by a factor of 22 percent from 1990 to 1991 and import value increased in the same period by 15.6 percent. The industry is affected by) feed prices, which have declined of late, a factor that can widen profit margins. Firms in the industry are able to a degree to control the influence of feed suppliers by producing their own feed. Consumption of poultry and poultry products is continuing to increase (68.4 pounds chicken and 18.0 pounds turkey per person in 1994). Top...