Current Agriculture, Food & Resource Issues
D. Sparling and E. van Duren
excellence in external analysis will also be a necessary management survival skill. This
management capability cannot be learned through a traditional MBA curriculum; rather it
requires experiential learning - inside and outside public, academic and private
organizations.
Firms expanding into new markets face many unknowns. Ghemawhat’s (2001)
framework on global distances attributes the challenges faced by companies in global
expansion to a lack of management understanding of the impact of the four dimensions of
global distance: cultural, administrative, geographic and economic distance. Developing
skills to bridge gaps across such a range of activities traditionally has not been part of
management training.
Mergers and Acquisitions and Firm Strategy
Strategy related to mergers and acquisitions will differ depending on whether a firm is
in commodities or niche products. Firms in the commodity businesses will continue to
focus on cost and the role of economies of scale in improving their competitiveness.
Mergers and acquisitions can help firms attain those economies of scale, as can expanding
into new global markets. Both scale and global sourcing can contribute to cost-reduction
strategies.
For firms with the ability to differentiate their products, global markets not only can
offer new outlets for those products but also can expand the knowledge base required to
continually develop new product offerings. Expansion of the knowledge base may be
accomplished through the hiring of personnel with more global experience, through
relationships with other suppliers and customers internationally, or it can be the result of
the acquisition of firms where the desired knowledge resides. This has been particularly
evident in agricultural biotechnology.
Firms involved in mergers and acquisitions need an additional skill set, skills in
managing the integration of both the new organization and its people. To be successful
and capture the value in the embedded knowledge of the acquisition, integration managers
must have both task skills and human integration skills (Birkenshaw, 1999).
The Role of Ideas
Every year 12,000 new grocery products are introduced and 80 to 95 percent of these
will eventually fail or be replaced by a product variant (Jekanowsky and Binkey, 2000).
The frenetic pace of product development and product obsolescence means that ideas are
the currency of the future. Ideas mean opportunity and new firms will start to develop
ideas into commercial ventures. These start-ups may develop the product and market to a
threshold level, beyond which their capabilities may not extend. To move to the next
level, these firms must either acquire the necessary capabilities or, more likely, be
acquired by a larger organization that sees smaller firms as a source of partially developed
ideas and markets. We can expect to see the continuation, and likely acceleration, of the
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