A business report: Cargill Inc.
Cargill's supply chain approach
Cargill's targeted markets: the Western and Asian perspective
Cargill's market entry customs and channel strategies
Cargill as an American company and and supply chain provenance
The following business report considers Cargill, a company operating in commodity and direct-consumer distribution markets. Cargill is a company that employs more than 180 000 employees and exports 25% of US wheat and supplies most of the worlds produce like meat, oils and other food produce to consumers.
The company has a vertical supply chain, however with the global trends it becomes more horizontal and joints with famous brands to be down-to-market and answer consumer tastes and preferences. With increasing publicity as a result of globalization, Cargill is more transparent, yet still retains privacy in areas important for its competitive advantage.
The company presents the largest private company in USA operating globally since the early 20th century; It has an established distribution channels around the world after the American post-War influence in Asia (Browsler,2005;Cargill,2014) . The company produces and distributes grain, meat, flavors and owns ocean transportation. Most of the company’s activity like distribution and production channels is vertically integrated.
The report will first consider Cargill’s supply chain, with its target markets and strategies of marketing channels and markets. Finally it will move onto issues of supply chain provenance and give main recommendations based on problems presented in the report.
Cargill’s supply chain approach reflects on the nature of a private company. It keeps a very private image of an unrevealed, yet integrated, tightly knit supply chain.
The company operates globally. To supply its operations, its supply chain is highly integrated and dependent on inner processes. Cargill both ships, supplies and sources from its own sister companies like Cargill Grains or Meat solutions, flavoring and aluminum to Cargill Ocean transportation (Cargill,2013).
An integrated supply chain of the company helps it create and satisfy its own demand based on global commodity demands: Cargill Ocean Shipping will have ceaseless demand from Cargill Grains in USA, which in their turn are bought by Cargill poultry farmers in Thailand. As noted by Kneen Browsler in his Invisible Giants, “Cargill literally makes up on volume what it loses on every chick because it makes a profit producing the egg»(by selling grains to farmers) (Browsler,2005).
A crucial point to be made is with such volumes of interconnectedness company creates its independent and monopolized production channels. They are highly secured since vertically integrated and independent from a third party. They give the company economies of scale and established production channels. A clear process of shipping and distribution is described in Cargill’s CEO talk in 2001 adapted to the diagram below.
Figure.1 Adapted from speech of CEO Prokopenko, 2001 (Haenn and Richard,2013)
It is questionable whether this model of producing (Fig.1) around the globe to sell at home is more efficient, than producing at home e.g Monsanto, Cargill’s competitor, producing meat in Brazil for home and exports.
Addressing the question is in company’s ocean shipping similar to Shell or Hyundai (Bichou ,2011), which delivers Cargill’s load worldwide. Yet while Shell and Huyndai secure and ensure safety and timely delivery of their production, Cargill has more reasons to own the fleet. Let alone its insight...
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