Analysis of Company: Perdue Farm

Analysis of Company: Perdue Farm

Arthur W. Perdue’s quest for excellence in the poultry business began in 1917. Perdue started his company as a table-egg poultry farm. He slowly expanded his egg market by adding a new chicken coop every year. Arthur’s son Frank joined the family business in 1939 after leaving school at the end of his the second year. In 1950 Frank took over leadership of Perdue Farms, which had over 40 employees at the time.

During the 1970’s Perdue entered into new markets in Boston and Philadelphia and also opened a new processing plant in North Carolina. Shortly after this, in 1977 Arthur Perdue died, leaving behind a business who’s annual growth rate was 17 percent compared to the industry average of 1 percent. Arthur’s son Frank was left behind to take over the business. Frank Perdue without a hint of self-deprecation stated that “I am a B-minus student. I know how smart I am. I know a B-minus is not as good as an A-said of his father simply”, “I learned everything from him” (Hill & Jones, 208).

During the 1980’s and 1990’s Perdue Farms diversified and expanded its market further down to other eastern coast states and southern states. By 1994, revenues were around 1.5 Billion a year. To add to this number Perdue purchased the twelfth largest poultry producer in the United States with about 8,000 employees and revenues of approximately $550,000 a year.

Internal analysis of strengths and weaknesses

Strengths

- Practice small economies

- Sells only fresh young broilers

- Maintain an environmentally friendly workplace

- Represent the total quality management slogan

- Leads the industry in quality

- Largest poultry producer in the northeast

- Second largest producer in the United States

- Owns its own trucking fleet

- Involved in every aspect of the business

Weaknesses

- Packing and shipping policies

External analysis of opportunities and threats

Opportunities

- Produce roasted Chicken and Chicken parts

- Produce other kinds of meats

- Offer products on the west coast

Threats

- Computer Malfunction

- Over capacity in the market

- Slow consolidation

Porters Five Forces

Risk of entry by potential competitors

The risk of entry from potential competitors is low, due to the barriers of entry. The barriers of entry are high, traceable to the cost of starting the business and what it costs to re...

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... details. At Perdue nothing goes to waste. To make sure this is true Perdue is involved in every aspect of the chicken business, from breading and hatching its own eggs to processing chicken feet and selling then to Asia as a barroom delicacy. These efforts were implemented through team management with a focused message coming from senior management.

Recommendations

Considering Americans’ average annual consumption of chicken (almost 80 pounds per person in 1990), many in the industry wonder how much growth is left (Hill & Jones, 1998).

My recommendation is that Perdue continue to expand their market share by experimenting with producing other kinds of meats. This will keep Perdue profitable during the overcapicity period in the industry. Also, Perdue should open up production plants further west. By doing this, Perdue could capture the West Coast just like they did on the east cost.

References

Hill, C. W. L & Jones, G. R. (1998). Cases in Strategic Management (4th edition). Boston New York: Houghton Mifflin Company

Hill, C. W. L & Jones, G. R. (1998). Strategic Management Theory (4th edition). Boston New York: Houghton Mifflin Company

Internet: www.Perdue.com