Poultry industrys strength is flexibility

By Keri Collins Lewis

MSU Ag Communications
MISSISSIPPI STATE -- Mississippis top agricultural commodity weathers economic storms by
responding quickly to shifts in demand, and economists at Mississippi State University predict 2012
will be a year of recovery.

Increased prices for eggs have buoyed the poultry industry, which has been challenged by
the high cost of feed and fuel. Egg production in 2011 was valued at $200.82 million, a 12
percent increase over 2010. (Photo by MSU Ag Communications/Scott Corey)
In 2011, Mississippi ranked fourth in the nation in broiler production, with more than 765 million birds
produced on 1,478 farms. The broiler industry represented over $2.21 billion in value for the year.
Mark Leggett of the Mississippi Poultry Association said broiler production has been reduced by an
average of 4 percent in 2012. The reduction is starting to make up for 2011's challenges.
I heard someone say that 2010 was the best year ever, and 2011 was the worst year ever -- they
went from peak to trough in one year, in terms of profitability, because of overproduction and high
feed costs, Leggett said. From what Ive been told, all of the companies have moved back to
profitability and 2012 is looking better, as long as corn prices dont spike and production is tightly
controlled.
The U.S. Department of Agriculture reported that hatcheries in the state set 17,689,000 eggs for
broiler chicks during the week ending April 28, which was 5 percent below the same week in 2011.
The overall number of chicks placed in 2012 is down 6 percent.
The industry began to pull back production by placing fewer chicks in late 2011 to combat
increasing input costs and mostly flat demand, said John Michael Riley, agricultural economist with
Mississippi State Universitys Extension Service. For 2012, the focus has been on demand.
Consumers continue to view poultry as an economical protein, but producers struggle to overcome
the high cost of feed in this economy.
Riley remains cautiously optimistic about the months ahead.

Broiler production in Mississippi could be consistent with 2011, at 4.6 billion pounds, Riley said.
Egg sets thus far in 2012 have been increasing slightly across the nation and similar numbers
should be expected in Mississippi. It is tough to know for sure because the industry can make
adjustments so quickly, but the current trend is showing at least steady growth in 2012.
Mary Beck, head of the poultry science department at MSU, said the number of birds processed
during the last week of April is slightly higher than previous weeks.
For the week ending April 28, more than 31 million birds were processed, an increase of about 3
percent from the week before and an increase of 0.61 percent over last years numbers, she said.
This suggests that market stabilization may have begun. In addition, prices of poultry meat in stores
have risen slightly, particularly for dark meat, which is gaining in popularity.
Beck said MSU scientists are researching a variety of ways to help the poultry industry, including
reducing feed costs.
With the high price of corn, driven in large part by the use of corn for ethanol, MSU scientists are
investigating alternative feed ingredients to determine optimum inclusion into diets for growth and
cost effectiveness, she said.
During the past years economic difficulty, increased prices for eggs buoyed the industry.
Egg production was valued at nearly $201 million in 2011, about 12 percent higher than in 2010,
Riley said. The higher value is completely attributed to higher prices, up 14 percent in the latter part
of 2011, because production was down 2 percent.
Jackson, Miss., is the headquarters of Cal-Maine Foods, the largest producer and distributor of fresh
eggs in the United States. Cal-Maine sells most of its eggs in 29 states across the Southwestern,
Southeastern, Midwestern and mid-Atlantic regions.
Leggett said Cal-Maines Mississippi facility represents about 5 percent of the companys total
production.
Most of Cal-Maines eggs produced in Mississippi are sold within the state and to neighboring
states, Leggett said. They continue to grow their specialty egg market, which includes brown, cagefree, organic and enhanced-nutrition eggs. These are steadily increasing areas of demand in the egg
market.
May is National Egg Month, and the American Egg Board offers educational information along with
hundreds of recipes for both family and foodservice use at http://www.aeb.org.

Abstract
This paper gives a review of three poultry improvement programmes in Malawi viz.: the
Smallholder Commercial Poultry Project (SCPP), the Smallholder Poultry Improvement

Programme (SPIP), and the Malawi Smallholder Poultry Model Project (MSPMP). The
SCPP was aimed at promoting commercial egg and broiler production in peri-urban areas.
The project provided farmers with a ready market for their products. Due to management
and funding problems, the project has since gone into oblivion. On the other hand, the SPIP
was aimed at improving egg and meat production of indigenous chickens through
crossbreeding using the Black Australorp. The programme is hampered by a myriad of
problems such as ill-defined programme objectives and implementation strategies,
inadequate availability of improved stock, lack of appropriate poultry husbandry skills, lack
of cheap quality feed, prevalence of diseases and lack of programme evaluation. The
MSPM Project is aimed at enhancing employment opportunities and income generating
activities of smallholder farmers through poultry production or related activities. With proper
planning, monitoring, evaluation and modification, the MSPM Project has the potential to be
used as a viable and relevant poultry production model in Malawi. This paper focuses on
the activities of the three poultry programmes in terms of their strengths, weaknesses and
makes suggestions for improvement.

Introduction
Poultry are the most widely kept class of livestock in Malawi in both rural and peri-urban
areas (Safalaoh 1992; MOAI 1999). The majority of poultry kept are chickens followed by
doves, ducks, and guinea fowls (Haule and Jere 2000; Safalaoh 1997). The trend in
commercial poultry production has been unsteady due to an unreliable supply of feed, an
inadequate supply of day old chicks and the prevalence of diseases. The MOAI (1999)
indicated that Malawi had a poultry population of about 8.6 million free-range chickens, 1.6
million broiler chickens and about 0.2 million layers kept under intensive production.
Realising the importance of poultry production, the Malawi Government has embarked on a
number of poultry improvement programmes geared at improving productivity of
subsistence and smallholder commercial poultry production. This paper discusses the
Smallholder Commercial Poultry Project (SCPP), the Malawi Smallholder Poultry
Improvement programme (SPIP), and the Malawi Smallholder Poultry Model Project
(MSPMP).

The smallholder commercial poultry project

The Smallholder Commercial Poultry Project (SCPP) was implemented in the early 80s as a
pilot project to promote commercial poultry production among small-scale farmers in
Malawi. Under this scheme, farmers were provided with a starter pack that comprised dayold chicks, feed, drugs and equipment (cages, feeders, drinkers) on loan. Farmers were
required to sell their products (eggs and broiler meat) using the government-owned
Blantyre, Lilongwe and Mzuzu Egg Marketing Centres. Farmers therefore had a ready
market for their products. Due to lack of funds, poor management and poor loan recovery
mechanisms, the project was closed. Sadly, there is no documentation regarding what
caused the failure of the project and no efforts have been made to evaluate the project. It is

paradoxical to find that most egg producers in Malawi have problems marketing their eggs
yet the now defunct SCPP provided farmers with a ready market for their products. There is
a seemingly urgent need to revisit the whole poultry products marketing system so that an
appropriate market structure can be established. Formation of poultry farmer co-operatives
and/or clubs should be explored and the Poultry Industry Association of Malawi should take
a leading role in this regard.

The smallholder poultry improvement programme

The SPIP started in the 1950s. The main objective of the programme is to improve
productivity of indigenous chickens (IC) in terms of egg and meat production through
crossbreeding with the Black Australorp (BA). Safalaoh et al. (1996) reported that IC
attained 8-week and 20-week live weights of only 615 g and 2100 g, respectively. The need
to improve the productivity of IC cannot be overemphasised. Studies carried out in Malawi
(Safalaoh et al 1996; Mjojo 1983) have shown that crossbreeding the IC with the BA bird
can improve 8-week bird weight and feed efficiency by 16 and 6%, respectively.

Program operations
Choice of breed for improvement
The Black Australorp (BA) was chosen as the exotic breed for crossing with the IC. The BA
was chosen based on its dual-purpose nature and its ability to adapt well to tropical
environments such as Malawi. On the other hand, no concerted efforts were made to
identify and rigorously select an IC type that would optimally combine with the BA in order to
produce an ideal crossbreed for the selected egg and meat production traits. For instance,
the naked nake IC has been reported to have a higher meat yield than the dwarf village
chicken (Safalaoh 1997).
Apart from the egg and meat production, other traits such as feed conversion, productive
life, fecundity, quality of eggs (fertilisation and hatchability), growth rate, feed conversion,
carcass yield and quality could have also been evaluated. Once identified, these IC
genotypes would then be conserved so that they do not become extinct.

Marketing and distribution of birds

Until recently BA birds were sold to farmers at 6 weeks of age at a cost of MK80.00
(MK80.00 = ~US$1.00). This was a deliberate decision made to relieve rural smallholder
farmers of important and critical early life operations such as brooding, feeding and
vaccinations. In order to increase access of birds to smallholder farmers of lower income
levels, farmers can now purchase either day-old chicks or fertilised eggs at K15.00 and
K5.00, respectively. Farmers place the purchased fertilised eggs under broody IC hen for
natural incubation. Some smallholder farmers under the GTZ-supported Integrated Food
Security Programme (IFSP) in Mulanje, Southern Malawi, are already practising this method
which is referred to as the BA Multiplier Programme (Safalaoh 1998).

When birds are ready for sale, farmers are informed through radio advertisements or
announcements made using public speaker vehicles that go around the villages. However,
due to funding problems, such promotional activities are sporadic and done on an ad hoc
basis. In order to decentralise production and distribution of the BA birds, the SPIP
established breeding and multiplication centres at Mikolongwe, Bwemba and Choma in the
southern, central and northern regions respectively.
While birds were initially delivered to each of the distribution centres (in the villages) using
government transport, farmers are now required to provide their own transport for purchase
and delivery of birds to their homesteads. This arrangement has resulted in many farmers
not buying the birds due to lack of transport. Consequently, not all birds produced at the
multiplication and breeding centres are sold at six weeks of age as planned. The price of
MK80.00 per bird has also proved to be prohibitive for the majority of rural farmers (the
target clientele of the programme) most of who live below the poverty line. These factors
limit further growth in demand of BA birds. Failure to sell birds on time has also been costly
for the SPIP. Keeping birds for longer than six weeks results in increased production costs
for feed, disease control and water bills among others. A case has been reported where
Bwemba Multiplication and Breeding Centre had about 5,206 nine-week-old birds that were
consuming 650 kg per day costing the project US$112.94 (Saini, personal communication).
With proper planning such unnecessary costs and expenses could be easily avoided.

Support services
Provision of services such as vaccines and extension services were an integral part of the
SPIP during inception. However, in an attempt to promote self-reliance and programme
sustainability, farmers are now required to purchase their own drugs and vaccines. Not
many farmers can afford to purchase these vaccines and drugs. Disease prevention is
therefore an exception under smallholder conditions. This has resulted in the prevalence of
outbreaks of diseases such as New Castle Disease (Christiansen 1986). Adequate and
reliable extension services are mainly constrained by a low extension worker to farmer ratio.

Project risks
The SPIP has two major risks. The first is the abrupt change birds face when they are
moved from breeding centres to the villages. The change from an intensive deep litter
system of management to a free range system is in itself stressful in terms of feeding
(nutrition), housing and general bird welfare. Under such conditions, the performance of the
BA birds is heavily compromised, as the birds may need some time to adjust. Secondly, the
birds are exposed to an environment where outbreaks of diseases such as New Castle
Disease come in horrendous and epidemic proportions.

Impact of the SPIP

The Impact of the SPIP leaves a lot to be desired. Safalaoh (1998) reported that only 5.3%
of the rural population in Mulanje keep BA birds while approximately 97.3% keep indigenous

chickens. Gondwe (1994) has reported similar observations. Low availability of BA birds has
been attributed to erratic and biased distribution, high mortality rates, unaffordable bird
prices and lack of good quality feed (Safalaoh 1992, Gondwe 1994). There is virtually no
evidence of planned breeding programmes in the rural areas of Malawi. The breeding
strategy used is indiscriminate where chickens themselves are responsible for selection,
mating, incubation and brooding. Under such circumstances, no clear crossbreeding
programme can be implemented with any hope of success.
Another often-overlooked fact is that most farmers in the rural areas prefer to keep hens to
cockerels. However, BA hens tend not to sit on their eggs (Safalaoh 1992) hence no eggs
are hatched. For crossbreeding purposes, the male BA cocks should therefore be
introduced in order to cross with local hens, which naturally sit on their eggs. Beneficial
effects of crossbreeding the BA with the IC include improved weight gain and improved feed
efficiency (Safalaoh et al 1996).

Program evaluation
Albeit being in existence for more than 40 years, the SPIP has never been evaluated.
Programme evaluation is important for beneficiary impact assessment and modification of
the programme, where necessary, in order to achieve the desired goals/objectives.
Additionally, timely programme evaluation would identify strengths and weaknesses that
would be used to draw up recommendations that would be used to strengthen the SPIP.

Suggestions for improvement

Several options exist for improving the SPIP. Accessibility to BA birds can be improved by
encouraging farmers to purchase fertilised eggs to be incubated using IC hens. However,
farmers need to have proper poultry feeding, general management and disease control
skills so that bird survival can be improved. Vaccination campaigns of diseases such as
New Castle Disease should be strengthened and drugs for all-important diseases made
available at affordable rates through reasonable cost recovery mechanisms to ensure
sustainability. Mechanisms for reducing the price of six-week old birds should also be
sought so that a larger proportion of the target clientele can afford to buy the birds. Finally,
there is an urgent need for the Malawi Government to evaluate the programme so that the
SPIP can be put on the right course.

The Malawi smallholder poultry model

Poultry production at the smallholder level is generally characterised by low productivity
(Safalaoh 1997). However, the importance of poultry as a source of income to rural landless
and economically marginalized households in Malawi has recently received tremendous
recognition by both government and non-governmental organisations. With appropriate
improvements to the existing poultry production systems it is envisaged that small-scale

farmers in the rural areas of Malawi can greatly benefit from keeping poultry. In view of this,
the Government of Malawi, through the DANIDA Agricultural Sector Programme Support
Phase II (DASPS II) - Livestock Component, initiated the Malawi Smallholder Poultry Model
(MSPM) Project. This project is an adaptation of the Bangladesh Poultry Model. This project
is aimed at development of a poultry production model to enhance employment
opportunities and income generating activities of smallholder farmers in Malawi (Haule and
Jere 2000).
It is envisaged that development of the MSPM would invariably work as a poverty reduction
strategy thereby improving the economic status of the poorest of the poor households with
priority given to female-headed households. A Participatory Rural Appraisal was conducted
before commencement of the project in order to generate information regarding perceptions
and constraints of smallholder farming communities in relation to livestock production with
emphasis on poultry. The project is being implemented in two sites of Lilongwe West Rural
Development Project and Kasungu Rural Development Project.

Project components
The MSPM is designed as an integrated system that provides all the prerequisite
inputs/supplies and services that are required to maintain and sustain a viable semiscavenging poultry production system. The model is designed to synchronise all related
poultry activities hence their interdependency. The poultry model has the following
components:
The Poultry Worker: The poultry worker is responsible for provision of services such as
vaccination of birds and training farmers in managerial skills.
The Feed seller: The function of the feed seller is to supply feed to chicken growers.
The Chicken rearer: The function of the chick rearer is to raise birds up to eight weeks of
age for sale to the key rearer.
The Key rearer: This is the main target of the model. The key rearer keeps local broody
hens and exotic ones. In Malawi, the Hyline is being used for production of table eggs.
Pullet rearer: The pullet rearer raises birds up to 18 weeks of age for sale to the Model
breeders.
Model Breeders: These are supposed to maintain breeding stock for production of chicks for
use by chick and key rearers.
Egg seller: These collect and sell eggs from the key rearers.

Mini hatcherers: These hatch day old chicks which are distributed to chick and key rearers.

Current project status

Mini hatcherers: In the initial stages of the MSPM Project, the use of mini hatcherers has
been temporarily removed. This has been done due to lack of appropriate incubation
equipment for use at the smallholder level. The use of rice husk incubators is currently
being tested at Chitedze Agricultural Research Station. Considering the fact that rice husks
are not readily available in the pilot project sites, there is a need to look for alternative
materials that could be used as incubation materials instead of rice husks. In the absence of
incubators, fertilised eggs are purchased from commercial hatcheries and sold to farmers.
The farmers then place these eggs on broody IC hens for natural incubation. However, one
of the problems with this approach is that there is no assurance that all the eggs bought
from the hatcheries are fertile. Another apparent problem with regard to sustainability is that
the project buys the fertilised eggs on behalf of the farmers. It is important that farmers
themselves should be involved in the procurement of these eggs so that they should get
used to the process, thereby simultaneously promoting an element of project ownership.
Egg sellers: The main purpose for keeping hens is the egg. As such, the expectation of
most farmers is that they will produce and sell the eggs themselves. However, the MSPM is
designed in such a way that the eggs should be sold by a farmer other than the producer key rearer. Preliminary observations have shown that the key rearer would rather sell the
eggs himself and not through the egg seller. The need to thoroughly analyse and evaluate
various components of the MSPM becomes apparent. For instance, could the key rearer
and egg seller components be combined? The views and feelings of the farmers should be
part and parcel of the model before any success is anticipated.
Model breeders: Currently, farmers are using hatched eggs from commercial breeders. Use
of commercial hatcheries as a source of fertilised eggs may not be sustainable. The project
should establish its own breeding stock so that farmers and mini hatcherers can easily
access the fertilised eggs. Initial indications are that the Hyline breed is performing well
under village conditions using the semi scavenging system of production. The performance
of the Hyline breed should be studied thoroughly before it can be recommended for use at
the village level in Malawi. There is also a need to assess how crossbreeds from the local
chickens with the BA or other exotic breeds can perform under conditions as stipulated in
the MSPM.
The Feed seller: Feed is a very important component of the MSPM as it is one of the major
constraints to poultry production in Malawi (Safalaoh 1992). Currently, farmers are using
feed purchased from commercial millers. This feed is generally expensive and in the
absence of a sound economic base, the sustainability of such an approach is questionable.
Another flaw of the approach is that the project is responsible for the purchase and delivery
of feed to the farmers. There is a need to evaluate the project in these early stages to

assess if the farmers, without project intervention, can effectively manage and sustain the
project. It might be prudent to consider teaching feed sellers how to mix their own feed on
the farm. This would ensure that feed is always available on the farm. The farmers should
also be taught to grow crops such as soybeans that form a large proportion of poultry feeds.
It is therefore of paramount importance that the MSPM Project should be accorded all the
financial and technical support so that it can accomplish its laid out objectives. There is a
need for an ongoing monitoring and evaluation system so that timely project modifications
can be made and implemented in order to suit prevailing conditions and farmers'
aspirations.

Conclusion
Poultry production is, and will continue to be, an integral part of life in Malawi. For any
poultry improvement programme to succeed, there is a need to take into consideration the
prevailing situation of the farmers and their aspirations and ambitions. Proper planning and
constant monitoring and evaluation are prerequisites. There is a need to review the
Smallholder Commercial Poultry Project concept in line with the newly introduced Malawi
Smallholder Poultry Model. The failures associated with the SCPP may be applied to the
MSPM and appropriate corrective steps taken accordingly. Revival of egg marketing centres
would provide farmers with a ready market for their products. Components of the MSPM
should be thoroughly examined in terms of their applicability and suitability at the local level.
More importantly, the Malawi Government should always evaluate its projects before
embarking on new ones. Under normal situations, it would have been expected that the
Smallholder Commercial Poultry Project and Smallholder Poultry Improvement Programme
could have been evaluated before commencement of the Malawi Smallholder Poultry Model
Project.

Executive Summary:
Al-Ain Poultry Farm was formed in 1981 and at present it is United Arab Emirates number 1 chicken
supplying company. The headquarters of the company is situated in Al-Ain while shops that sell their
product are spread all over the country. Other main offices are in Abu-Dhabi and in Dubai.the
company deals in chicken and egg products and the consumption of chicken products and other
poultry products are very high in urban areas.
In external environment, the service of the supplier is quite satisfactory. There are various
competitors presents for the Al Ain poultry farm. The names of competitor are like al Rawdah, al
Khazana, and Tasil etc. There is also big threat of new entrant in the industry. Sometimes the
customers try to do bargaining but the Al Ain poultry farm mostly prefer fixed pricing method so there

is no chances for doing bargaining. There is huge impact of the political, legal, and economic, social,
ethical and technological issued on the company.
Internally, there is a facility for communication with the customer like getting information about the
quality of the product; packing information etc. The leadership is managed by the general
management in the Al Ain poultry farm company.
The image and reputation of the Al Ain poultry farm among the customers is good. So the customers
are widely attached with this farm company. If there are any new entrances then it is not severely
affected. There is lesser impact of the import product on this company.
The company faces a throat cut competition. There are two kinds of risk which is faced by the poultry
farm: Production risk and price risk.
The strategic objective of the company comprises of deciding the scope of the farm, and gives the
knowledge to the members of the farm
Talking about the grand strategy, the Company wants to make stability in its growth and profits and
thus the company adopts stability strategy. Also For making growth, the company has diversified
itself.

Introduction:
Strategic management is nothing but drafting, implementing and cross checking of various decisions
which shall help the company in achieving its long term goals. It specifies the aims and objectives of
the organization. It helps in formulating various policies for achieving the companys objectives.
Strategic Management is an ongoing process. It is used to evaluate the business as a whole and to
assess its various individual processes. Strategic management includes assessing processes on a
regular basis.
Al-Ain Poultry Farm- History Development & Growth:
Al-Ain Poultry Farm was formed in 1981 and at present it is United Arab Emirates number 1 chicken
supplying company. It is famous for providing the highest quality meat and eggs in the United Arab
Emirates as of now. It strives to provide the best and the most healthy chicken at the best possible
price to the people of United Arab Emirates. The company has always been committed to this cause
and they will always continue to be committed to it. Al-Ain Poultry Farms many types of chicken and
they are also providing various varieties of eggs. The headquarters of the company is situated in AlAin while shops that sell their product are spread all over the country. Other main offices are in AbuDhabi and in Dubai. All key issues are decided upon by the chairman and by the board. Operational
issues, managerial works and financial issues are take care by the general manager. A lot of
technical machines are being used in the poultry farms for the best results. All such machines come
under the head technical manager. Moreover there are many individual departments which take care
of topics like sales and maintenance etc. There is a separate consumer care department which is
also basically responsible for the sales and sales related issues. Financial departments are divided
region wise throughout the country. The general manager is basically responsible for day to day
working of the company. (farm A. A., 2010)

In the last two decades there has been tremendous growth and development in the United Arab
Emirates. Due to this there has been tremendous growth in the poultry sector of United Arab
Emirates. The eating habit has changed a lot in United Arab Emirates. More than3/4th population of
United Arab Emirates is currently residing in urban areas. The consumption of chicken products and
other poultry products is very high in such urban areas. There was a time when most eggs and
chicken products were imported in the United Arab Emirates. It was somewhere in the mid 90s that
local producers of United Arab Emirates were finally able to meet the chicken and poultry
requirements of the country. At present there is hardly any import of eggs or any other poultry
products. Al Ain poultry aims to be the leading poultry product suppliers in the United Arab Emirates;
they aim at increasing their shareholders worth and serving the society by providing high quality
chicken and related products. People at Al Ain have made public health their first priority. At Al-Ain it
is believed that success can be achieved through innovation and by maintaining quality of products.
Al Ain has a highly trained inspection force which ensures the quality of the product is maintained
while production. (2010)
Vision and Mission
The Al Ain poultry Farm Company the number one company in UAE. It is located in Dubai, Al Ain and
Abu Dhabi. Before the establishment of any poultry farms in UAE all frozen chickens and eggs were
imported. Then number of poultry farm came into the market. This makes UAE self dependence
country and it is estimated that the value of eggs and the fresh chickens consumed in the year 2003
were stood at 400 million circa Dhs. During 1996 the Al Ain took an importance place among the
poultry farm market in above mentioned location. It has various competitors like al Rawdah, al
Khazana, and Tasil etc. (farm A. A., 2010)
Their main mission is supply of the best quality and service with the growth of the shareholder value.
But with this they serve the best quality of chickens to the customer because they do not want to
play with the health of the customer. Their mission is also to bring satisfaction among the workers.
For this purpose, the leadership in the company is held by the Mr. Abdullah Khamis Amer (general
manager) he has the quality of dealing with looses and success and also the ability to motivate the
employees. To provide best quality of food, the appointed a technical manager named as Dr. Khalid
Moh'd Abd El Monem. He is responsible for the developing and maintenance of the technology for
example the freezer facility for the storage etc. Companys mission is also to earn more profit on
lesser cost, to provide all necessary information to the customer, and also take their feedback. This
is done by sales and marketing team whose responsibility is given to Mr. Fathi Belail.
Thus they want to achieve the belief of the customer with superior quality, product innovation and
operation and service efficiency. Their mission and vision are:1.

Public health on their first preference

2.

High inspection in the company

3.

Give assurance about their working policy to the customer

4.

Make relationship between the Al Ain poultry farm and their customer

5.

Maintaining and developing the relation with their processors

6.

Supply of only superior quality of product

7.

Giving the facility of education, training and development to all employees.

8.

A good leader who can develop motivation and can give support to the employees so they
can achieve their potential.

9.

The employees who can make coordination with the ethical standard and can take
responsibility for their work. (AlA101)
External environmental analysis
The growth of Al Ain poultry farm depends heavily on the external environment in the last two
decades. The five force model of the company is as given below:Porters five force model:
Bargaining power of suppliers:
The service of the supplier is quite satisfactory. They do not import any chickens from out of the
country. So its give benefits in getting discount due to be domestic suppliers. Delivery on time, good
quality of chicks and eggs, helps the Al Ain poultry farm company in winning the trust of the
customer.
Competitor
There are various competitors presents for the Al Ain poultry farm. The names of competitor are like
al Rawdah, al Khazana, and Tasil etc. Not only the domestic competitors but the company also faces
competition from the abroad. Brazil is the aggressive player in UAE chicken markets. The main
markets of Brazil are Yemen, UAE, and Saudi Arabia etc. All competitors have adopted
approximately same price policy and quality of product so to compete with them is todays time has
become more difficult.
Threat of new entrants
As we see that there is a lot of scope for growing poultry Farm Company. So there is also big threat
of new entrant in the industry. The recent new entrances in market are Ain Quide, Al Surk etc. There
business is also expended and they are also keen to establish themselves as the best company.
Threat of substitute product
It is not compulsory that the customer will only prefer chickens in their food, there are lots of
substitute for the products of the company. If people are conscious about their health and they can
choose vegetarian food and in non vegetarian then can prefer fish, mutton or any others.
Bargaining power of customers
The customers are also main factor in the external environment. They are educated, so they want to
take all information before getting the delivery. In Al Ain poultry farm there is communication network
so that they can communicate with the customers. Sometimes the customers try to do bargaining but
the Al Ain poultry farm mostly prefer fixed pricing method so there is no chances for doing
bargaining.
PESTLE analysis:

Economic environment
The three economic factors which effect al ain poultry farm are capitalism, socialism and
communism widely. The al ain poultry always want to be in competition with others. Their profit and
wages system are based on the ability and willingness to work. There is also a policy so that any
owners can divest his capital form the profits. The workers are also free to select an employer and
site. Like workers al ain poultry farm select the managers on the basis of their ability. They are also
free to make any decision. There are also a limited competition and profits, wages etc fairly in
relation to efforts. The company also encourages workers for employment. Generally economic
environment consist those factor which bear the functioning of a business. In case of al ain poultry
farm the economic system comprise price and distribution controls, per capita and national income,
population, financial and fiscal sectors, infrastructure etc
Political environment
The political system is prevailing in a countrys policies and control of business. An honest, efficient
and stable political system is become essential factor for the development of any country. In UAE
there are three main vital institutions: executive or government, legislature and judiciary. Among the
there the legislature is the most crucial political factor which impacts the al ain poultry farm because
it includes powers such as policy-making, law making, budget approving mirror of public opinion.
Technological environment
Technology environment exerts significant influence on business. The impact of technology on the
business can be seen as companys product, services, markets, suppliers, competitors, distributors,
manufacture etc. Due to technology environment the al ain poultry farm got the continuous growth
from last few years. It is also helpful in increasing quality products. The al ain poultry farm has more
capital demand, rise of productivity, more emphasis on R&D, and pressure to become more
professional etc.
Socio-cultural environment
There are certain social factors which are beyond the companys gate. These factors include attitude
to exalt, family, marriage religion, education attitude to people toward the work and ethics. Some
time due to this factors the demand of the al ain poultry farm grew and sometime its falls.
Ethical:
Ethical factors are concerned with the social responsibility part of the company. The poultry farm has
some ethical rules to follow regarding maintenance of animals. For example, the company has to
maintain proper safety and neatness level in farm etc.
Legal:
The company is also largely affected by industrial and animal related laws. The company is also
prone to any sue in commercial court regarding quality of food material.
Value chain:
The value chain consists of the process of value addition in the products of the company. In Al Ain
poultry, the value is been added at every stage of production.

The company has large farms and number of hens producing eggs. The company maintains large
farms and thus feed the animals so that they can produce eggs and meet which are the key products
of the company.
The company also adds quality to its products by the mean of proper and regular quality check of the
products produced by the farm.
At each stage of production, proper documentation is done in order to maintain proper accountability
of the system.
The company is also planning to go for ISO 9001 implementation to increase the quality of the
products and to add more value in it.
Internal analysis
The internal factors consists the factors which are inside the company. The internal factors of the Al
Ain poultry farm are:Products and service
This includes inventory management, product modification, and product transportation of Al Ain
poultry Farm Company according to the customer needs. Not only the products, this also includes
the Al Ain poultry farm companys sales services, promotional for the product, packing, handling of
return product and customization.
Communication flow
There is a facility for communication with the customer like getting information about the quality of
the product, packing information etc. Payments system
This includes billing for the customer, caring of special customer orders, order frequency, credit
cheques and others.
Leadership
The leadership is managed by the general management in the Al Ain poultry farm company. The
general manager looks for various operations like: general, technical, marketing and financial
management performance etc.
Employees
The employees are the backbone of the company and so only skilled labors work here. A satisfactory
environment for the working, facility for the coach, support and motivation, giving education to
employees, co-operation between the employees and the Al Ain poultry farm company, giving
promotion for their work etc are also available in the company.
SWOT analysis
If we want to analysis any company then the simplest method will be the SWOT analysis. This stood
for strength, weakness, opportunities and threats.

The information provided by the SWOT is helpful in matching the resource and capability of the firm
in the todays competitive advantages.
The Al Ain poultry farms SWOT analysis is as following:Strength
The strength part shows that how the company is capable in using its resource as per their
capability. The strength of Al Ain poultry farm is:

The Al Ain poultry farm company is the 1st poultry farm company in the whole UAE.

The image and reputation of the Al Ain poultry farm among the customers is good. So the
customers are widely attached with this farm company. If there are any new entrances then it is not
severely affected.

They used different cost for the different products so that every kind of customer is attached
with the company.

They have used versatile technology. They used new technologys freezer for the storage of
the chickens, water resource, method of disposal for the dead birds, preventing them from the
dieses and their communication network is so strong so that they can communicate with the
customer in easy way.

There is lesser impact of the import product on this company.

Weakness
Every company is not capable to its goals because there always remains some weakness in the
company. The weaknesses of Al Ain poultry farm are:-

They faced a throat cut competition. Its true that they are the 1st poultry farm company in
whole UAE but due the competitive environment any little mistake can bring a big problem.

The whole business depends only on the chicken products. There is a little bit work in egg
products but more than 80 part deals in chickens.

The distribution channels are also weak. Sometimes its happened that the delivery of
chickens did not reach at the right time and the company bears both cost and morale loses.
Opportunities
In simple language the opportunities shows the future, means what will be condition of future for our
company. It answers that is there any chances for getting profit or losses. The opportunities for the Al
Ain poultry farm are:-

The main reason for growth of any poultry farm is because chickens are considered to be
healthy protein diet.

There is an increment in the standard of living of the customer and if we look the
environment of the UAE then there is also growth in non vegetarian people day to day. As a result
the demand of chickens is also increased.

Day to day new technology is developed, so now they can store more and more chickens,
can bring new quality of food with taste.

Competition is increased and so the company has became more conscious about the quality
and will try to reduce the cost. This will be beneficial for the both Al Ain poultry farm and the
customers.

They can get more skilled labor that will create a good environment within the company and
can make cooperation with their leaders.
Threats
The threats refer to the current problem which they are facing. The Al Ain poultrys farm threats are:-

There are two kinds of risk which is faced by the poultry farm: Production risk and price risk.

Now a days bird flu is spread in the birds, so in this kind of environment it is more difficult to
make a quality product.

There are lots of competitors, both domestic and foreign; they are facing competition from
the other country also.

There are lots of substitutes. Due to the substitutes the competition has increased.
Thus the SWOT analysis shows the positive and negative side of the Al Ain poultry farm.

Strategic objective
Strategy means making long term direction, taking decision, and allocation of resource. Basically we
take three kinds of decision in strategic objectives. What, for whom and how can we do so the
companys objectives are decided in strategy.
Practically speaking, now days the poultry farming has became successful in global market. Thats
why the Al Ain poultry farm access to market and specialized inputs with the financial support. So the
key strategy of the company is to maintain the supply and ownership of the birds, the whole
processing and wholesaling should be the as per the meat hygiene act. The standard of this act are:

The transport of meat as per the human consumption

Hygienic production

Premises processing meat according to the human consumption

As we know that this farm also deals with eggs so it operates it under the regulated system and it is
the responsibility of managers for the finding markets for their food.

The strategic objectives are:1.

2.

To decide the scope of the farm, and give the knowledge to the members of the farm.
All practices are done after the considerations of birds welfare. The poultry covers the topic
like lighting, ventilation, health, food protection and management practices.

3.

To give assurance about the safety of managers, workers and visitors.

4.

Monitoring of various nutrient, impact problems and after that remedial action is taken.

5.

Possible business model of the company with the consideration of neighborhood

competitors.

6.

Effect of the import of chickens on the domestic production. Increasement in the value of
domestic product and reduce the import dependency.

7.

The poultry farms importance in the customers with more diversified and reasonable price.

8.

Knowing the link between productivity and income generation.

9.

To reduce impact of the uses of meat and to insure that there is no impact on the natural
cycle. (Hill, 2009)
Generic strategic
There are three kinds of generic strategies for the maintenance and achievement of competitive
advantages: Cost leadership, differentiation, focuses strategy.
If we see at the Al Ain poultry farm then conclusion is that Al Ain poultry farm has adopted a
differentiation strategy. Because as we know the Al Ain poultry farm focuses on the different kinds of
chickens product and each products has its attribute so it charge the price according to the products
feature. The reasons for adapting to this strategy are

By this they make brand loyalty among the customer form the rivals.

There are all kinds of products according to the customer need so every customer is
attached with the particular product. Not only for the feature there is also differentiating in the pricing
so that every level of the customers is attached.

For managing the supplier also. Why? Because if any supplier charges higher value for the
material then it can be managed in any other product and this is possible only when the farm is
diversified in chicken products.

There is also a benefit from the side of the customers. There will be large number of buyers
and we know that if there is large number of buyers then their power for negotiation will be low due
to price fixation and low alternatives.

If there is any new entry then there will be negligible impact on the customer loyalty.
Thus for all above the reason the company has adopted the differentiate strategy. But the company
also deals in eggs with the chickens so for that company follows the cost leadership strategy which

brings the ability to compete with competitors and bring attraction of the customers and reduces the
defect rate. (farm A. A., 2010)
Grand strategic
A record production in poultry and meat industry last year shows that various poultry farms have
work harder for the growing consumption need. For the production of chickens the poultry farm has
adopted grand strategy by the trade organization.
A grand strategy involves the essential action for the long term plan and to achieve its major
objectives. So we will analyze the Al Ain poultry farm companys grand strategy on the bases of
market, diversification, product, organizational development, strategic etc.
After the analysis of its corporate and generic strategies, we will discuss the grand strategy on the
three levels

Growth strategy

Retrenchment strategic

Stability strategy
For making growth, the company has diversified itself. For that it does innovation, changes its
received and takes the feedback of the customer and also they provide different variety of chickens.
If there is any failure in the receipt then they adopt accordingly. This strategy built willingness in the
company to try new things. The company is also trying for the new market for its product. (farm A. A.,
2010)
The company wants to make stability in its growth and profits and thus the company adopts stability
strategy. The Al Ain poultry farm company do the research only on the new product. The research is
done on the quality and the price. They do not change the existing products and price policy.
There is no retrenchment strategy followed by the farm company because they do not want to make
any reduction in their business activity.
Implementation and control
After all this analysis about the external and internal environment and the various strategies,
objectives of the Al Ain poultry farm in UAE we can say that the poultry farms in UAE are growing
day by day. The company has implanted all those objectives and strategy, keeping in mind things
like the impact on the environment, what is the government strategy for the poultry farm, the
customer view and the cooperation of the staff and top management. Thats why the production
increased by 25 % in comparison to last year and the market share of Al Ain poultry farm is also
increased by 20 % in UAE.
The various implementations and way they are controlled by the both management and government
are mentioned in following:Water supply
The chickens are preceded in adequate water supply, clean and cool with the better quality. The
water is needed in the farm for fire protection and shed cooling. Except this the hatched chicks

should also access water within the 72 hour. The Al Ain poultry farm has a reserve capacity minimum
of one day.
Vehicular access
The transportation policy of the farm is made after the consideration of traffic, delivery vehicles, road works
etc. The funding of transportation needs the negotiation of developer, local council and transport development.
Noise, electricity supply
The supply of the electricity is at minimum cost and as per the requirement. But due to the large level of a
poultry farm they get three phase of electricity supply. There is noise when the farm is established and due the
various birds and this is controlled by the environment protection policy.
Buffer distances
Sometimes it happens that due to water quality, dust and noise, odor and management policies, some places are
affected. So there should be a buffer distances maintained between the farm and impact area. All activity is
done for the omission of this kind of practices and dourness.
The control on the disease is also an issue. So there is a distance between every poultry farm which is approx
100 meter.
Site selection and development
They have selected the site after the consideration of distance of the market, environment and the government
regulation.
Water management
Water management includes

Disposal of dead birds: there is an arrangement of disposal of dead birds without

any harm to the natural environment. Sometime they face the problem of
contamination of surface water and ground, odour problems and fly infestation. But they
follow the EPA recommendations like freezing of dead birds so that ordure problem can
be reduced, and the disposal is done in the licensed water etc.

Disposal of waste eggs: - the eggs are disposal by the composting, rendering the
byproduct plan which are environmentally sound.

Recommendations and conclusion

After the analysis about the various parts of the Al Ain poultry farms we can be say that no one is perfect and
neither the farm under consideration. In SWOT analysis we have discussed the problem faced by the company.
So there should be actions against them.
According to us the following action should be taken by the Al Ain poultry farm:

As we see that the company mostly deals in cash, so there can be credit facility
available to the customers. The company should allow the credit card etc for the
payment.

The Al Ain poultry farm company deals only in two products Chickens and eggs.
So the company needs to diversify itself. It can diversify by the two ways: expansion and
launching new products. As we see that the business of the Al Ain is only in the three
major cities of the UAE so it should established its business in more cities and it should
also launch vegetarian food along with this chickens and eggs.

As many times its been seen that due to lack of inspection and monitoring the
birds gets spoil, and they used them without checking them. So there should be regular
and proper inspection. It will be good if there is a monitoring system on daily bases.

The Al Ain poultry farm disposes the dead bird in the nearest places, which is also
harmful so the disposal of dead bird should be approx 1000 meter far from the company
sites.

The quality of chickens should be checked. The uncooked chicken should be store
in the refrigerators. There should be prevention action from the various dieses like the
flu etc.

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Executive Summary
The following plan is based on 16 years of experience, is highly focused and promises to
follow a path of prosperity for its owners and staff. It is based on conservative sales
figures, and actual sales may be higher. The projections contained herein are authentic
and will be used as the budget for the business. Latheethen Feeds, Inc. will show a
profit immediately, and will increase sales and profits each year thereafter.

Latheethen Feeds, Inc. is a well-established custom feed store. The company is

engaged in the production of custom livestock feeds, bird feed, deer feed, and
other animal products in relation to livestock animals, pets, etc. Latheethen Feeds, Inc.
has recently expanded its production facility (custom mill) and is well-positioned to
market its workroom production beyond its present client base. The company is
dedicated to providing the highest quality customer service, meeting the agreed
delivery dates, and keeping the sales prices controlled in accordance with ongoing
market trends. The focus of this business plan is to identify future target clients, explain
our marketing strategy, improve internal procedures so we can substantially increase
profitability, and obtain the funding required to expand the business.
Latheethen Feeds, Inc. is located in Pleasantville, Michigan. The company is
a privately owned corporation and has been operating for nearly 16 years. The previous
owners live next door to the store, and are planning on moving to their
retirement home in Northern Michigan, as soon as this business transaction is
completed. However, since the current owners and new owners are in fact family, the
current owners will be around if needed and to visit on a bi-weekly basis.
The six counties surrounding Latheethen Feeds contain an estimated 14,695 livestock
farms, and 20,434 hunters. However, the entire state is an open market once delivery
to customers is an option. Latheethen's would then be in the market to compete for the
business of 53,315 farms. USDA records show that a quarter of a billion dollars is spent
annually on feed in the State of Michigan by these same farms. The company's
estimated existing share of the nearby market is less than 1%. Previously, the owners
have established an estimated $140,000 of the state total on an annual basis. They
have accomplished this without any form of advertisement, and without any outside
sales. The new owners are focused on growing the business to gain a greater share,
$260,000 annually, of the state total.
The marketing research and tailored marketing strategy described in this business plan
will result in after-tax profits of $22,806 in Year 1 and increasing to nearly $30,000 in
after-tax profits within three years, despite significant new advertising and renovation
expenses.
To achieve these goals, Latheethen fields needs funding for two different phases of
expansion. We are currently seeking a $15,000 short-term loan, to be repaid within two
years. This loan will enable us to purchase a delivery truck, a key element of our new
sales and marketing strategy. In early Year 2, we will need a second, long-term loan in
the amount of $135,000, to build the area's premier equine boarding stable. The
addition of "Mid-Town Meadows" will not only be another source of revenue, but also
another source of feed sales. Mid-Town Meadows will be a comfortable, inviting equine
resort designed to make our customers and their horses feel as if they are enjoying VIP
services in a world all to themselves. The decor and theme will be rustic (log exterior

walls), yet formal (private club house overlooking the enclosed arena). The feed store is
already located at the main entrance, next to a cascading water fountain and company
signs.

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1.1 Objectives
There are five primary objectives by which the success of Latheethen Feeds will be
tracked:
1. Maintain 100% of existing customer base by consistent customer service.
2. Expand our customer base through direct referrals and agressive direct sales.
3. Expand our product line gradually, based on customer requests.
4. Expand our custom feed mill to meet the growing sales market.
5. Expand the types of services offered to our customers, as their desires are
identified.

1.2 Mission
Latheethen Feeds is a family owned and operated company, dedicated to providing our
customers with the best premium products and services on the market.
Latheethen's offers all of our customers the direct personal attention they deserve. Our
committment to customer service and satisfaction assures us that our customers are
100% satisfied with our products and services.

1.3 Keys to Success

The primary keys to the success of Latheethen Feeds are as follows:
1. Product freshness and quality.
2. Variety and price.
3. Constant research of industry to keep knowledgeable of market needs.
4. Management: products delivered on time, professional customer
service, managing budgets.
5. Constant evaluation of strengths and weaknesses with adjustments made as
warranted.

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Company Summary
Latheethen Feeds is a mid-Michigan based farm and feed store dedicated to providing
our customers with professional services and high quality feed products.
Latheethen's offers only the best feed and products in the industry. Latheethen's also
offers our customers the option of a custom made feed. Our mill enables us to
provide high levels of quality products that are always fresh and available.
Latheethen's primary focus is on keeping our customers satisfied. Professional

and reliable service, competitive pricing, and a knowledgeable staff will provide for
continued growth in the years to come.
Latheethen's was founded in 1989 by Chris and Steve Latheethen. Their hard work and
dedication has proven to be successful, as Latheethen's is now one of the area's
premier feed stores and the only one specializing in custom-made feed.
The future of Latheethen's is looking bright with younger family members taking over
ownership. Our focus is on the core products, our sales and promotions emphasize
our history and reputation for quality and customer service. With the addition of new
energy and enthusiasm from younger owners, we will increase sales and the bottom
line. Even though the new owners have the time, energy, interest and knowledge to
invest in an already successful family business, our greatest asset will be our
committment and pride in protecting and growing the business.
In the past, Latheethen's has been just a feed store...in the future Latheethen's will
grow to become not only a larger provider of quality feeds, but also a boarding stable
and resource for customer with inquiries about all areas of pet care.

2.1 Company Ownership

Latheethen Feeds, Inc. is a privately-held Michigan corporation. Chris
Latheethen, Latheethen Feeds, Inc.'s founder, and her husband Steve Latheethen are
the two current owners.
The new owners will share 50/50 ownership and they are as follows:

Dennis Latheethen

Kay Latheethen

2.2 Company History

Latheethen Feeds was founded in 1989 as a privately held corporation registered
in Midland County, owned and operated by Chris and Steve Latheethen. It was originally
a retail company that sold feed and supplies to local customers.
Chris and Steve recognized the need for more variety in products and more competitive
pricing. Eventually this idea generated the need for a feed mill, which has greatly
increased the success of the business. Producing custom feeds reduces the costs to
almost 80% less than it costs to purchase a name brand feed. The custom-made feed
has been Latheethen's best seller because of quality and price.

The past performance table and chart show the increase in sales over the past three
years. By adding a point of sale inventory and accounting system, we will be able to
better track our best sellers and highest margin items, to increase net revenue. while
our cost projections are accurate, the current owners have not tracked sales categories
in as much detail as we will.
The previous year shows a large increase in the value of assets. This represents both
the value of the acreage on which the business stands (contributed to the business by
the current owners), and the recent purchase of the point of sale system which will be
used to better track orders.

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Past Performance

Sales

$141,550

Gross Margin

$37,314

Gross Margin %

26.36%

Operating Expenses

$34,497

Inventory Turnover

0.00

Balance Sheet

Current Assets

Cash

$1,179

Inventory

$2,198

Other Current Assets

$0

Total Current Assets

$3,377

Long-term Assets

Long-term Assets

$39,625

Accumulated Depreciation

$38,603

Total Long-term Assets

$1,022

Total Assets

$4,399

Current Liabilities

Accounts Payable

$0

Current Borrowing

$0

Other Current Liabilities (interest free)

$0

Total Current Liabilities

$0

Long-term Liabilities

$0

Total Liabilities

$0

Paid-in Capital

$1,000

Retained Earnings

$584

Earnings

$2,815

Total Capital

$4,399

Total Capital and Liabilities

$4,399

Other Inputs

Payment Days

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ry_fc.php#ixzz3GTsRHMnO

Market Analysis Summary

Latheethen Feeds is the only custom feed manufacturer in the Midland, Michigan area
and surrounding 50 mile radius. In the past, our market has been individual end
users. Recent market analysis suggests that our custom feeds could be marketed to
other direct feed stores outside of this 50 mile radius.
In reviewing our existing customer base, and recognize the broad range of local
organizations such as 4-H and Future Farmers of America (FFA) and area farms and
ranches, we have seen the possibilities for potential market growth. Latheethen's has
never had a direct sales force, advertised, or approached the specialized market they
dominate with any zest for growth.
More than sixteen years in this business with success in the creation of formulas of high
quality, cost-contained custom feed, mixed with the energy of youth and enthusiasm to
grow this family business is greatly reinforced by the simple market analysis outlined
below.

4.1 Market Segmentation

Latheethen Feeds, Inc. will focus on the following markets:

4-H Enrollments: Simply put, this segment of our market is our future. We are
working with 4-H to further interest in animals, their nutritional needs, and
means of cost containment. Through offering quality custom feeds we will
provide success for today and many tomorrows as these youth become adult
consumers (while annually, new youth will be targeted). This market will allow
for sales of all our feed products as 4-H offers exposure to a variety of animals.

Cattle Farms: The number of cattle farms within a 100 mile radius of Latheethen
Feeds is quite phenomenal. There are many different purposes for these farms as

well. Some raise cattle for auction and slaughter while some raise cattle for milk
processing. All together, this is a market that is small, but would be very
lucrative just by having a few of these commercial accounts purchase their feed
from us on a weekly basis. The cattle market is very tough, but with our low
prices and quality service, we should be able to obtain at least 10% of the
overall market.

Horse owners: We will provide custom feed while building customer relationships
for long term growth and expansion into our goals of massage, boarding and
other related services. Horse owners range from individual owners to ranches
and even direct marketing to area race tracks will be undertaken.

Hunters: These customers, of all ages and genders, have contributed a great
deal of the Latheethen's cash flow over the years. Expanding on simple hunter
spontaneous purchases (jerky, nuts, dried fruit) will increase net revenue without
an increase in labor, space or marketing costs. During the hunting season,
"regulars" stop for beets, carrots, corn and apples on their way to their blind.
Adding these impulse-purchase items will add to our bottom line.

Livestock Farmers: This market is virtually up for grabs. Tax-exempt farmers look
for the best in quality and price, both of which Latheethen's offers to our
customers. Farmers also look for availability of large quantities. Again, at
Latheethen's, we can handle any size order from less than a pound through
orders containing thousands of pounds. Latheethen's custom feed mill will
again prove to be a big asset when dealing with the farmers.

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Market Analysis

2004

Potential Customers

Growth

4-H Enrollments

5%

9,846

10,338

Cattle Farms

2%

1,450

1,479

Horse Owners

5%

2,750

2,887

Hunters

8%

20,434

22,068

Other Livestock Farms

3%

649

668

Total

6.63%

35,129

37,440

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4.2 Target Market Segment Strategy

Strategically targeting all the 4-H enrollments close to our business helps serve the
needs and requirements of our local customers, and ties in logically with our marketing
plan (see below) and our style of feed store. The youth of the 4-H are our future. These
customers have regimented schedules, and find value in exceptional service, low prices
and high quality feed. This first tier of our market segment is also the primary focus of
our marketing plan, which has a deep commitment to focusing on the support of the 4H kids and their community.
Our SECOND-TIER market group, Cattle Farms, will also find value in great service
and quality feed, and will appreciate a supplier that keeps their products fresh and
ready for immediate delivery. Finding the niche in all our targeted markets has been
relatively easy... customers are looking for a feed supplier who maintains a complete
line of fresh products and has the ability to deliver. Latheethen's provides custom-made
feed, much more economical than other name brand feeds, and as an added bonus we
will deliver directly to their farms. This particular group is smaller in size,
yet the number of cattle to feed on each farm is substantially larger than most other
livestock farms. (The average size of each farm is 70 cattle.)

Our THIRD-TIER group, Horse Owners, will find that Latheethen's special blend of oats
and grains, all mixed in with our high quality minerals, results in premium feed at an
affordable cost. All of these things are essential factors in a customer's feed-buying
decision. Our specialty horse feeds are made for both the average horse and for the

equine racer, both of which are numerous in our area. We need to market the right
avenues to gain industry share in this rapidly expanding market.

Our FOURTH-TIER, Hunters, is simply the largest in number of individual purchasers.

Hunters are mostly seasonal customers, from the months of September through
December we will see our numbers skyrocket when compared to the other eight months
of the year. For projection purposes, we figured on having a low 30% of the total
available market (69,232). This total potential market includes hunters from six of our
surrounding counties (within a 50 mile radius). The actual number of hunters that stop
by on their way to their cabins or blinds is substantially higher than forecasted.

Our FIFTH-TIER, Other Livestock Farms, represents a market that has an abundant
number of feed users. Our custom feed mill allows us to manufacture any type of
animal feed we desire, which help us acquire the available customers in this tier. From
sheep and goat feed to rabbit and turkey feed, we make it all. Again, when we make
our high quality feed, we make it with the highest quality products and sell it at
wholesale prices. This market is basically up for grabs, as there are currently no
competitors within a 125 mile radius that can supply these customers with such a high
quality feed at the lowest costs possible.

We acquired our data for our market analysis from the Department of Natural
Resources, the 4-H Council, and from USDA National Agricultural Statistics Service.

All of our projections are based on actual, real-life numbers (number of

people/farms/etc.). We forecasted conservatively to show the actual amount of
business we can easily obtain through a few advertisements and direct marketing.

4.3 Service Business Analysis

Currently, Latheethen Feeds, Inc. is involved in the manufacture and retail sale of
custom feed and related products. Latheethen Feeds straddles two industries manufacturers of feed, and retailers of feed and farm supplies. Latheethen's 16 years of
success in the custom feed industry is the strong foundation for the success and
continued growth.
There are over 7,000 farm product raw materials businesses in the United States,
according to the 2002 U.S. Census Economic report. According to the same source,

farm supplies and raw materials wholesalers currently sell over $62,000,000 of goods
per year. Of these, only 843 of these were selling poultry and livestock feeds mixed on
location. With total sales of $8,141,368, businesses like ours sold an average of $9,658
in goods each, per year. This reflects the fact that most of the custom-feed mixers in
the United States are very small operations; many of them are farmers who mix their
own feed for their own livestock, and sell the extra to neighbors. Latheethen Feeds
started out this way, but expanded its product line with snacks for people, and wild and
exotic animal feed. By becoming a full-service custom-feed store, and developing a
reputation for great service and high quality feed, we have far surpassed the industry
average for revenue.
Our products are purchased from wholesale suppliers and re-sold to retail
consumers. Our custom feed is a huge competitor with other retail products. The raw
goods and time to manufacture cost at least 80% less than similar feeds. With more
focus on the overall quality of our feeds, the cost savings to our customers will become
more of a word of mouth advertising from end user to end user. Direct referrals are
always the best source of committed customer and sustained reliable growth.
There really is no competitor within a 50 mile radius of Latheethen Feeds for custom
feed for the wide variety of animals we provide for. Our tasks are to encourage our
customers to make referrals, to implement direct marketing to groups such as the 4H
and FFA, and to go out to the various ranches and livestock farms and introduce our
company and our line of custom feeds.
At this point, we are a great-kept secret, when comparing our customer base to the
existing market research potential.

4.3.1 Competition and Buying Patterns

Within the feed and farm supply industry, businesses compete on price, quality,
customer service, and delivery. Customer service can include things like ability to
produce a range of quantities, and custom-feed options. Customers must also trust the
supplier for regular, reliable service and consistent quality, since sudden changes in feed
can really disrupt their animals' digestion and health.
Our existing customers have pretty routine buying patterns. The same customers come
at the same time of the week or every other week. Their deliveries are scheduled for
the same time, with the same volumes each time. When asking our customers why
they use our products, they always have the same answer: "your custom feed is so
good for my animal and it is priced just right."

Most of our customers have been doing business with us for several years. Solid
customer relationships, a friendly atmosphere and being available to provide quality
products at a good price all add to a successful bottom line.
We strongly believe that by offering delivery services, we will gain a substantial number
of new customers, both through the advantages of the new service, and with the new
advertising (signs on our truck). We will gain the recognition of new customers through
our focused marketing plan.

4.4 Sales Strategy

Latheethen Feeds, Inc. will be entering into direct sales for the first time. Starting in
October and November, we will approach members of our target markets within 10
square miles both via phone and with direct visits. Where possible, we will ask existing
customers to provide us with an introduction or to mention us to their neighbors and
friends before we approach them. This will both lend credibility and pre-qualify potential
customers as genuinely in need of our services, based on others' knowledge of them.
We will tell them about our current products and services, and then ask them clearly
what we need to do to earn their business. We will listen to their desires and individual
goals. We will then mirror back to them what they have said, to be sure we understand
their needs. Finally, we will create an individualized sales proposal with their specific
needs (products, volumes, frequency, price, other services) included.
We will present the proposal as a written agreement ready for signature by both parties
to begin doing business.
Details for each order will be entered into our customer database. We will then adjust
our planned shipments of raw goods to include arrival of fresh product necessary for
new orders, to be manufactured and delivered as agreed by the timeline. Deliveries will
be automatically scheduled through our point of sale/delivery database. Each customer
price grid, conditions and all specific comments will be clearly maintained for all to
review and to guarantee complete customer satisfaction. Each order will be reviewed by
one of the owners prior to delivery to guarantee quality, accuracy and completeness.
Terms for payment will be COD and an invoice for each shipment will be faxed or called
to each customer the day prior to delivery to ensure payment is ready at the time of
delivery. (This will all be part of the agreement terms.)
Follow up calls will go to each customer within 24 hours of each delivery to ensure
satisfaction. If for any reason there is an issue, it will be handled immediately by one of
the owners directly with the customer.

Latheethen's has previously been successful do to repeat customers. As the business

switches hands we will also focus on keeping the existing customers happy and
successfully introducing our new products and services. We will always focus on our
repeat customers. The loyalty and respect we get from those customers will all play a
big role in growing the business and taking it to the next level.

4.4.1 Sales Forecast

The sales forecast for Latheethen Feeds, Inc. includes all varieties of feed, as well as
non-feed supplies and future forecasts for boarding stable revenue.
Adding the boarding stable will utilize vacant land and make it work for the company.
The addition of the boarding stable will add to our company's feed sales, and to the
specialized services we offer. Boarding Stable costs include laundering of horse
blankets, feed used by horses during their stay, and wear and tear on
grooming instruments.
The annual growth rates fluctuate and are defined as:

2005 - 3.37%

2006 - 8.83%

2007 - 34.63%

2008 - 16.68%

2009 - 14.81%

The reasoning behind the initial dramatic increase in sales is due to accurate reporting
and tracking, and growth of sales (generated through direct sales and advertising). For
2007, 2008 and 2009 we are forecasting significantly increases in our sales as we
open the boarding stable. We anticipate that it will take three years to book out all of
our stalls.
In 2009, we are forecasting a modest increase of 12.84%, based on the growth of feed
sales and stable services alone. We are also planning on bringing back the rodeos and
livestock shows that the previous owners have held in past years. This year could prove
to be the year to bring back some of the good old days to the new Latheethen
Feeds location.

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Sales Forecast

FY 2005

Sales

Equine Feed

$38,040

$39,942

Deer Feed

$12,000

$12,960

Livestock Feed

$93,346

$102,680

Misc. Products & Supplies

$6,000

$7,000

Boarding Stable

$0

$0

Total Sales

$149,386

$162,582

Direct Cost of Sales

FY 2005

Corn, Oats, Molasses, Other Ingredients

$40,400

$42,258

Misc. Products & Supplies

$3,000

$3,500

Boarding Stable

$0

$0

Bags, Ties, Pallets, Labels

$1,440

$1,506

Subtotal Direct Cost of Sales

$44,840

$47,264

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Strategy and Implementation Summary

Emphasize customer service
We will differentiate ourselves with CUSTOMER SERVICE! We will establish our

business as a clear and viable alternative for our target market, from the scores of
competitors known for "do-it yourself," "no we don't offer that product," and "no
delivery available."
Customer service is paramount in our business and our business plan. The management
team will accomplish this goal by training employees and by providing encouragement.
The new management team of Latheethen Feeds, Inc. believes that an employee who is
happy at work will enjoy working. It is always easier to please customers with staff that
cares, a facility that is clean and equipment that is kept in proper working order.
Latheethen Feeds, Inc. will also work toward establishing community involvement
programs that will demonstrate how the business can contribute to a better quality of
community life. Community project groups such as the 4-H Council, the FFA, Schools,
churches, and other groups will be welcomed for tours of the facilities and will be shown
how the facility can be used to help raise funds for their needs.
Build a relationship-oriented business
Build long-term relationships with customers, not single-visit deals. Become their "feed
dealer of choice." Teach them the value of the relationship.
Focus on target markets
We need to focus our offerings on specific population groups as the key market
segment we should own. We definitely want to be able to sell to smart, quality
conscious customers.

5.1 Competitive Edge

Latheethen Feeds, Inc. has one of the most sought-after competitive edges in the
industry. We have our own individual feed mill that can produce any animal
feed requested. All we need is a few ingredients and some time to make our specialty
custom feeds.
Our custom mill was built and wired with a 3-phase electrical system (industrial
strength) and the best equipment on the market today. Other feed stores dream of
having access to their own mill; this is where you make most of your money. Instead of
having to be the middle man and purchase a large inventory of generic feeds, we
custom-blend and produce our own feed to keep the costs down. When we can produce
and market feed that costs us nearly 80% less than it costs to purchase a generic feed,
we can keep our shelf prices lower than our competitors.
Let's face it, lower prices + higher quality feed = money in the bank.

From the very first day Latheethen's was open for business in 1989, the owners never
advertised. They let the word get around (word-of-mouth advertising). This has
obviously worked in their favor, as they are operating a profitable business, as is
reflected in net profit increases annually.
In the future we, the new owners of Latheethen's, will market our products to new
customers in various strategic ways. This will aid in bringing in more customers...and
will also aid in spreading the word that we are expanding our business. Most of the
existing customers come from within a 30 mile radius of the store. Through delivery, we
can offer our products and services to anyone willing to pay for it.
Our next competitive edge is that we will be running our delivery truck on a daily basis
(once we implement delivery and obtain the necessary business). Most of our other
competitors do not deliver or only deliver within a short distance from their location.
Again, we will serve our customers with a higher quality feed, high level of professional
service, and be willing to take it to their door.
Our strongest competitive edge is that we are family owned and operated and that our
knowledge of the feed industry runs deep. With the resources available, the energy we
can contribute at our young age, the raw talent for business and deep understanding of
customer service, the potential to grow this already exciting business is tremendous.
To develop good business strategies, perform a SWOT analysis of your business. It's
easy with our free guide and template. Learn how to perform a SWOT analysis

5.2 Marketing Strategy

Latheethen Feeds, Inc. will implement the following Marketing Strategies upon the
business transfer in the following order:
1. Direct Marketing: we will personally market (sell face to face) our products to
various feed stores, stables, boarding facilities, farms, clubs and race tracks.

2. Customer Referral: we will provide customer incentives for direct referrals, in the
form of price discounts.

3. Website Marketing: we will implement our web plan and review the outcome to
determine the efficiency it has on our customer base.

4. Event Marketing: we will visit area livestock events (within 150 miles) to hand
out flyers, business cards, and product catalogs, and to meet potential
customers face to face.
Through marketing our products in these ways, we project that Latheethen's will almost
double its business within the first 2 years of new ownership.

5.3 Milestones
The following detailed milestone table shown identifies the primary tracking points for
our initial company takeover, for our growth and our development process. We have
included budgets for each subject and the name of which company came in with the
lowest bid price.

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Milestones

Milestone

Start Date

Business Title Transfer

10/4/2004

10/31/2004

Implement POS System

11/1/2004

11/30/2004

Print Product Catalogs

11/1/2004

11/30/2004

Buy Delivery Truck

11/1/2004

12/1/2004

Begin Delivery Service

12/1/2004

12/5/2004

Advertise in Newspapers

11/1/2004

12/31/2004

Affiliate with related website

11/1/2004

12/31/2004

Contact 200 potential customers

11/15/2004

1/1/2005

Build Web Site

11/1/2004

1/15/2005

Get 50 new contracts

1/1/2005

3/1/2005

Track hunter snack preferences

11/1/2004

3/1/2005

Average livestock feed sales of $7775/month

11/1/2004

10/31/2005

Renovate Boarding Stable

3/1/2006

10/1/2006

Landscaping, fencing, etc.

10/1/2006

7/1/2007

Totals

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