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Q: 1 How would you evaluate JBS strategy of industry consolidation?

JBS (Jose Batista Sobrinho) is the largest Brazilian multinational company in the food industry, producing fresh, chilled, and processed beef, chicken and pork, and also selling by-products from the processing of these meats. The company has established itself as the world's largest company in the beef sector with the acquisition of several stores and food companies in the world. JBS SA had begun to use acquisition for growth in the mid 1990s. It has been built through more than 30 acquisitions in 15 years with appropriate structure and management. The strategies of JBS are based on four stage process, these are given below:

Stage one 2005 & 2006: build an adequate financial structure. The company has focused on two main areas the Debt for working capital & equity to finance its growth by considering the financing in business. As company has strong cash position & the debt were equalize to cash generation b/c of high liquidity level. By having of enough cash on hand it has access to international capital market to finance for growth. JBS has invested heavily in new facilities in order to increase processing capacity and improve logistics. The company's credit risk is improving despite its high debt burden, allowing it greater scope for expansion through acquisitions.

Stage two 2007 & 2008: Develop a global production plat form. This is to be created in South America, North America & the European Union. The main objectives behind the global access that, the company has access to raw material supply globally, secure leadership means leaders in countries with surplus production scale, leader in export globally, & getting cost reduction opportunity. By reducing the cost of raw material the company can produces the more production & it can sell products to customers on affordable prices.

Stage three 2009 & 2010: Create & integrate global sales & distribution platform. Drive margin by integrating sales & distribution plat forms to serve efficiently local & external markets, small retailers, food processor, restaurants & other customers in south & America, Europe, Middle East & Africa (EMEA) & Asia. The company has efficiency on selling the best product to the best market with the best price & also in cost reduction on sales & transport, which can improve over all margin of the company.


Stage four 2011 & 2012: Invest in value added products & branding. The company is providing the value added products (brand & quality recognition) to their customers, which may be the fresh products, cooked products, Minced products, cured products, and ready to eat products etc. through a good marketing investment. By doing of high technology investments to produce value added products & increases the value added products portfolio & company is also providing the customize products to each market.

Q: 2 How would you compete against JBS? If I were supposed to be JBS competitor the first and most important thing I must be doing is to properly manage and maintain the most valuable assets of the company that are employees of the my company, as in meat processing the workers turnover is high because of low wages and difficult working conditions. So to compete JBS, proper training and development programs must be organized to assist employees in improving professional competencies, skills, knowledge and overall abilities, so employees personal growth would be considered as

important so that employees can be motivated and satisfied from their jobs and along with that award system and bonuses would be offered to make them delight, loyal and to sustain them and ultimately it would reduce the turnover. Another area to be focused to compete JBS is to be more conscious about health of people and put enormous efforts to reduce food contamination as million of the people get sick and thousands of die because of food contamination due to carelessness of the meat producers and dairy companies, so as a competitor of JBS proper compliance with regulations must be perceived to reduce food contamination, and to not give any chance to regulatory authorities to get the plants shut down. So this would attract the people that customers and their heath are considered most important to the company and therefore customers of JBS might b switching. As the profitability is based on the distribution outlets so greater the outlets greater would be no of customers and larger would be sale and ultimately would increase the profit. So being JBS competitor all the areas would be having outlets of my company where JBS is also working but along with that those areas where people are not served by JBS, would also be served to compete JBS. This strategy of serving those people which are not served by JBS can generate more profit than JBS and more market share.


Q: 3 what must they do in order to make a long term success of their strategy of growth through acquisition? In order to achieve long term success through acquisition JBS must expand their market further and to capture the great segment of the customer through improving the quality of meat at in affordable price. Currently they are dominant in over 80% countries and six continents by providing value added beef, pork, lamb and poultry products. Their global acquisition strategy makes them unique in the market place it will help them continuously grow if they maintain its acquisition strategy and also in the future. It is estimated that the demand for pork will be increase on a worldwide bases the global consumer will be hungry for the high quality safe and affordable meat due to the increase in the poverty in global level. The middle class people will demand for quality animal protein included meat dairy products and egg. So they have to continuously grow through their ability to produce enough protein to fit the growing world population and to expand their market further where they dont have current operations and their Growth will be achieved by listening to the customer and meeting their needs. The global consumer is very discerning and their demand will be different as like Japanese are more conscious about fresh food and they will have a great potential over there if they will acquire any Japanese company it will get a huge market share and also its acquisition strategy is beneficial in Asian countries because they will demand due to the poverty So JBS has a great opportunity to expand their outlets in the developing countries by having more acquisition and to get a proper dominancy in its industry Additionally they should give more focus on the cultural and preference bases. They need to work together to recognize their needs and market their products to capture these consumer permanently and also they will take the advantages of new technology and production efficiency and a main advantage they will take to use natural resources to that country where they will operate.