Technological innovations are important inhelping firms achieve economies of scale and reduce overhead costs and otheroperational costs to be able to expand into other markets with profi
Brief description of the firm
Tyson Foods, Inc., founded in 1935 by John W Tyson and based in Springdale, Arkansas, is a leading American multinational corporation in the food industry As the world's second-largest processor and marketer of chicken, beef, and pork, Tyson Foods exports the highest percentage of beef from the United States The company operates well-known brands such as Jimmy Dean, Hillshire Farm, Ball Park, Wright Brand, Aidells, and State Fair In 2020, Tyson Foods was ranked No 79 on the Fortune 500 list of the largest U.S corporations by total revenue.
Phases of global Strategy
1.Buy back and invest strategy
The Tyson logo has served as the company's symbol from 1978 to 2017, with its origins dating back to 1972, featuring only minor modifications over the years This iconic logo remains a prominent symbol on Tyson products In 2001, Tyson Foods expanded its operations by acquiring IBP, Inc., the largest beef packer and the second-largest pork processor in the United States.
Tyson Foods made a significant acquisition, spending US $3.2 billion in cash and stock to purchase IBP, along with securing the naming rights to an event center in Sioux City, Iowa This strategic move is part of Tyson's broader expansion, which includes the acquisition of several companies such as Hudson Foods Company, Garrett Bird, Washington Creamery, Franz Foods, Prospect Farms, Krispy Kitchens, Ocoma Foods, Cassady Broiler, Vantress Pedigree, Wilson Foods, Honeybear Foods, Mexico Original, Valmac Industries, Thung Heritage Valley, Poultry Lane, Cobb-Vantress, Holly Farms, Wright Brand Foods, Inc., and Don Julio Foods.
On May 29, 2014, the company revealed a cash offer of $6.13 billion to acquire all shares of Hillshire Brands, following a previous $6.4 billion bid from Pilgrim Corp In June 2014, Tyson ultimately triumphed in the bidding war for Hillshire.
Pilgrim Pride, agreeing to buy sausage maker Jimmy Dean and Ball Park sausage for $8.5 billion
On July 28, 2014, the company announced the sale of its poultry businesses in Mexico and Brazil to JBS SA for $575 million, intending to utilize the proceeds to reduce debt incurred from the $7.7 billion acquisition of Hillshire Brands.
In May 2018, Tyson Foods announced its acquisition of American Proteins, Inc and AMPRO Products, Inc for approximately $850 million Additionally, through its venture arm, Tyson Ventures, the company invested in innovative companies like Beyond Meat, Memphis Meats, and Future Meat Technologies, which focus on developing plant-based meat alternatives Former CEO Tom Hayes acknowledged that while these investments may appear contradictory, they are strategically aimed at addressing future consumer demands sustainably.
On June 1, 2018, Tyson Foods announced the sale of its brands, including Sara Lee, Van, Chef Pierre, and the Bistro Collection, to Kohlberg & Company The acquisition was finalized on August 1, leading to the establishment of Sara Lee Frozen Bakery, headquartered in Oakbrook Terrace, Illinois.
On August 9, 2018, Tyson announced that it would sell its pizza crust business, including TNT Crust, to Austin-based Peak Rock Capital, who completed the acquisition on September 4.
On August 20, 2018, Tyson announced its intention to acquire grocer Keystone Foods from Marfrig Tyson announced it had completed the acquisition on November 30, 2018.
On February 7, 2019, Tyson Foods reached an agreement to acquire the European and Thai businesses of Brazilian food company BRF The acquisition was completed on June 3, 2019.
On January 10, 2020, Tyson Foods announced that it had sold its hit Golden Island business to Jack
Tyson Foods, a leading global raw meat producer, faces lower profit margins compared to prepared meat companies like Hormel Foods and Hillshire Brands, leading analysts to perceive limited growth in the U.S raw meat sector To address this challenge, Tyson is not only expanding its raw meat operations internationally but is also enhancing its presence in the prepared food market both domestically and globally This strategy is exemplified by its 2013 acquisitions of Don Julio Foods, Circle Foods, and Bosco Pizza, as well as the significant $7.7 billion purchase of Hillshire Brands to quickly capture market share in the prepared meat industry Additionally, Tyson divested Heinold Hog Markets, which contributed only about 1 percent of its total revenues, to facilitate these strategic acquisitions.
3 Drivers for a global strategic perspective
Global customer, similar customers needs:
Tyson Foods has historically sourced chicken from local independent farmers near its processing plants in the U.S., a strategy it continues to uphold However, in response to recent food safety issues in China, the company is investing millions to establish its own chicken farms there As of early 2014, Tyson operated approximately 20 farms in China, with plans to expand to 90 by late 2015 CEO Donnie Smith emphasized the rapid pace of this expansion, stating, “We just can’t build the chicken houses (in China) fast enough.”
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Tyson Foods employs a rapid production strategy to enhance chicken farming in China, where traditional operations often consist of small, open-air farms vulnerable to bird droppings that can increase the risk of bird flu In contrast, Tyson's facility can accommodate over 330,000 chickens within 16 climate-controlled buildings, each equivalent to two Olympic swimming pools To maintain biosecurity, trucks are thoroughly sanitized three times before entering the farm, and strict sanitation protocols are adhered to by workers on-site.
Chicken continues to be a high-margin protein source, with Tyson Foods anticipating stable sales in Mexico while expecting significant growth in China and Brazil Although India is projected to experience the highest percentage increase in chicken consumption, its overall volume remains lower than that of other regions Despite its primary operations in the U.S., Mexico, Brazil, China, and India, Tyson maintains a global presence in the poultry market.
Tyson Foods utilizes an incentive-based payment system for chicken farmers in the United States, rewarding those who produce the highest quantities of healthy birds To ensure consistency in chicken supply, Tyson supplies both the chickens and feed, shielding farmers from fluctuating grain prices Additionally, Tyson offers mentorship to all farms, particularly those facing challenges Contracts typically range from 3 to 7 years, with exceptional farms eligible for contracts extending up to 15 years.
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Tyson Foods is focusing on boosting chicken production in international markets, driven by lower corn prices, rising incomes, and a growing demand for safe food options This strategic approach aims to capitalize on the increasing global demand for Tyson products.
In 2021, it is estimated that this company slaughtered about 1,900 million broiler chickens, down 4.5% compared to 2020 Total revenue in the fourth quarter of
In 2021, the estimated revenue reached $12.811 billion, reflecting an 11.8% increase from $11.460 billion in the same period of 2020 Notably, the chicken segment saw significant growth, with revenue rising to $3.873 billion from $3.433 billion in the fourth quarter of 2020.
In 2022, Tyson Foods anticipates that its primary revenue will stem from the broiler sector, which has experienced consistent high profits in the last two quarters of 2021 Currently, Tyson ranks among the top 10 poultry companies globally.
Top 10 poultry enterprises in the world (Photo: Watt)
Mr John Tyson, President of Tyson Foods and one of the world's wealthiest individuals, recently shared the company's growth journey in the Harvard Business Review Tyson Foods has successfully expanded through a series of mergers and acquisitions (M&A), completing over 30 deals since the mid-1960s, including a significant merger with IBP that doubled the company's size and facilitated entry into the beef and pork markets Prior to this merger, Tyson had over 15 years of experience in poultry production, while IBP had acquired 14 companies specializing in high-value products The integration of these entities required a focus on creating cultural harmony, and the foresight of previous leaders in predicting the rising demand for convenience foods has contributed to the success of most M&A transactions.
External environment
1 DIAMOND MODEL OF TYSON FOODS
Tyson Foods Inc focuses on enhancing the skill levels and performance of its workforce through comprehensive training and investment programs The company's human resource functions encompass all aspects of employee management, from recruitment to performance evaluation, aimed at fostering employee development and growth on a global scale.
Tyson Foods Inc has access to various financial resources, primarily through equity capital and debt financing Equity capital is predominantly sourced internally, utilizing the company's own resources and channels In contrast, debt financing involves borrowing from external sources and organizations.
Tyson Foods Inc benefits from abundant natural resources in its home country and in locations where it operates production facilities Key resources include accessible water channels, which are advantageous due to their proximity and cost-effectiveness These resources require refinement rather than extensive development, allowing the company to utilize them efficiently in its operations.
Scientific knowledge drives frequent technological innovations, which are crucial for companies to achieve economies of scale By reducing overhead and operational costs, these innovations enable firms to expand into new markets while maximizing profits.
A firm's competitive advantage is significantly influenced by its scientific and technical knowledge, which forms its knowledge base This expertise can be sourced from national, industry-wide, or firm-specific resources By leveraging this scientific knowledge, a company can differentiate itself from competitors and enhance its market position.
Tyson Foods Inc's growth and global expansion are significantly supported by its robust infrastructure, which encompasses both physical and technological networks This comprehensive infrastructure enables the company to efficiently execute operations across various countries and markets.
The country's infrastructure is primarily built using its own resources, but when market potential arises, companies like Tyson Foods Inc contribute to local infrastructure development This initiative not only supports the company's growth but also fosters societal and market development in the regions where they operate.
Size of the domestic market
The domestic market size has played a crucial role in Tyson Foods Inc's internationalization and expansion strategies Understanding the dynamics of a larger local market enables the company to effectively strategize and plan its operations This increased market size allows Tyson Foods to assess its strengths and weaknesses in relation to growth, thereby refining its approach Additionally, a larger domestic market encourages the firm to explore opportunities for expansion into new markets.
Sophisticated and demanding domestic customers
Tyson Foods Inc has been driven by the sophisticated demands of domestic consumers to focus on innovation, leading to the development of unique products This push from discerning customers has enabled the company to harness its creative and innovative capabilities, resulting in the creation of new products and processes that support business growth.
Customer needs that anticipate those elsewhere
Understanding domestic consumers and their behavior patterns is crucial for forecasting the demands of consumers in different markets Companies can often anticipate the actions of market-specific consumers by analyzing the behavior of similar profile consumers in other regions.
Companies such as Tyson Foods Inc can impact consumer behavior in one market by leveraging insights gained from another market This ability is crucial for the strategic development of global strategies and facilitates expansion into new countries and markets.
Tyson Foods Inc prioritizes customer satisfaction by delivering high-quality products with consistent taste and quality The company is committed to providing value for money, ensuring that its strategic decisions enhance customer value while implementing efficient processes that also result in cost savings.
Tyson Foods Inc fosters a flatter organizational structure that promotes open communication and accessibility to managers and supervisors This approach cultivates a creative and trusting culture, facilitating the growth and advancement of the company Additionally, it enables employees to easily engage with leadership, encouraging discussions that contribute to a collaborative work environment.
Tyson Foods Inc fosters a supportive managerial system focused on employee growth and development Managers and supervisors actively collaborate with employees to enhance their personal and professional skills The company has implemented various training programs tailored to address employees' skill gaps and performance levels, with input directly from the workforce.
Intense competition between local rivals
Intense competition with local rivals drives Tyson Foods Inc to innovate and adopt new technologies in its operations This competitive pressure encourages the company to explore creative solutions, enabling it to develop unique processes that provide both competitive and cost advantages As a result, Tyson Foods Inc can attract a larger consumer base by continuously improving its offerings.
Internal Environment
Financial resources Yes Yes No Yes
Distribution network Yes Yes No Yes
Cost structure No _ _ No Competitive
The VRIO analysis indicates that the core competencies of the financial services enterprise and distribution network are influenced by development strategies To enhance its core competencies and strengthen competitive advantage, Tyson Foods must revise its pricing policy.
Tyson Foods stands as a global leader in the food industry, specializing in the manufacturing and processing of a diverse range of protein-based products.
2 Good Returns on Capital Expenditure – Tyson Foods, Inc earned good returns on capital expenditure by creating new income streams and is generally effective at executing new projects.
Tyson Foods, Inc excels in entering new markets, leveraging its expertise to achieve significant success This strategic expansion not only creates new revenue streams but also diversifies the company's economic cycle risk across its operational markets.
Tyson Foods, Inc is dedicating significant resources to employee training and development, fostering a highly skilled and motivated workforce that strives for continuous improvement and excellence.
Tyson Foods Inc partners with major retail outlets in the consumer foods sector, supplying its products to a variety of distributors, grocery stores, supermarkets, club stores, and restaurant chains Notably, Wal-Mart Stores Inc stands out as Tyson's largest customer, representing 17.5% of the company's consolidated sales for the fiscal year 2017 across all four major segments.
The company has successfully attained a high level of customer satisfaction through its dedicated customer relationship management department, fostering strong brand equity among both current and potential customers.
The company has fostered a robust dealer community that encourages distributors to actively promote its products Dealers are dedicated to enhancing their sales teams' expertise through training, ensuring they can effectively communicate to customers how to maximize the benefits of these products.
8 Reliable suppliers – It has a strong base of reliable suppliers of raw material thus enabling the company to overcome any supply chain bottlenecks.
9 Successful track record of developing new products – product innovation.
10.Successful track record of integrating complementary firms through mergers
& acquisition It has successfully integrated a number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
Tyson Foods, Inc., a leader in the food industry, has encountered difficulties in expanding beyond its core business segments due to its existing organizational culture.
Tyson Foods, Inc faces a significant challenge with a high workforce attrition rate, which surpasses that of its industry competitors This elevated turnover necessitates substantial investments in employee training and development, increasing operational costs compared to other organizations in the sector.
Tyson Foods, Inc struggles with product demand forecasting, resulting in a higher rate of missed opportunities compared to its competitors This inefficiency contributes to elevated inventory levels, both in-house and within the distribution channel, as the company is unable to accurately predict market demand.
The marketing strategy for the product needs significant improvement Despite achieving strong sales, the lack of a clearly defined positioning and unique selling proposition may expose it to competitive threats in the market.
Tyson Foods, Inc is investing more than the industry average in Research and Development; however, it struggles to keep pace with the most innovative competitors The company appears to be a mature firm, focusing on launching products with established features rather than pioneering new innovations.
Tyson Foods, Inc has demonstrated proficiency in integrating smaller companies; however, it struggles with merging firms that possess differing work cultures.
Tyson Foods, Inc is facing challenges from new competitors in the market, resulting in a loss of small market share in niche categories To address these issues effectively, the company needs to establish internal feedback mechanisms that directly involve insights from the sales team on the ground.
8 Primarily dependent on independent contract suppliers.
9 Frequent product recalls costing brand value.
1 Leader in protein based products in the world 0.10 2 0.20
2 Good Returns on Capital Expenditure 0.10 3 0.30
3 Superb Performance in New Markets 0.05 2 0.10
4 Highly skilled workforce through successful 0.05 4 0.20 training and learning programs.
5 Association with big brand retailers in consumer foods segment 0.05 1 0.05
6 High level of customer satisfaction 0.04 4 0.16
9 Successful track record of developing new products – product innovation 0.03 3 0.09
Successful track record of integrating complementary firms through mergers & acquisition 0.02 1 0.02
1 Limited success outside core business 0.10 3 0.30
2 High attrition rate in workforce – compared to other organizations in the industry 0.10 3 0.30
3 Not very good at product demand forecasting 0.05 2 0.10
4 The marketing of the products left a lot to be desired 0.05 4 0.20
5 Investment in Research and Development is below the fastest growing players in the industry 0.05 2 0.10
6 Not highly successful at integrating firms with 0.04 1 0.04 different work cultures.
7 Not being able to tackle the challenges presented by the new entrant and losing small market share 0.04 3 0.12
8 Primarily dependent on independent contract suppliers 0.03 1 0.03
9 Frequent product recalls costing brand value 0.02 4 0.08
Tyson Foods achieved a score of 2.52 in the Internal Factor Evaluation (IFE) matrix, demonstrating its ability to surpass the industry average by effectively leveraging its strengths while mitigating the competitive disadvantages faced by its rivals.
Internationalization process
1 Entry mode analysis - motives to internationalize
Divisional-by-product organizational structure with only 1 female among 14 top executives.
Tyson Foods CEO Donnie Smith emphasized the company's rapid expansion in China, stating, "We just can’t build the chicken houses fast enough, and we’re going absolutely as fast as we know how to go." This reflects his ambitious and integrity-driven approach to growth in the poultry market.
Donnie Smith achieved a Bachelor of Science in Animal Science.
Smith joined Tyson Foods in 1980 and worked in various positions, from broiler service rep to purchasing supplies and later into upper management positions.
-> Tyson Foods’ CEO is ambitious, has a wide range of knowledge regarding the industry, hands-on experience and commitment to producing the best meat for consumers.
By the 1960s, Tyson Foods shifted its focus from chicken farming to meat processing, creating a sophisticated system that involved purchasing chickens from contract farmers, with payments based on the timeliness and quality of production Over the years, Tyson expanded significantly by acquiring several companies, including IBP in 2001 and Hillshire Brands in 2014, solidifying its position as a major player in the meat industry.
Tyson Foods is a leading provider of meat products, catering to global demand with a diverse selection that includes beef, chicken, pork, and prepared foods Their offerings range from deli meats to pizza toppings, crusts, and tortilla chips, making them a versatile choice for consumers worldwide.
The internationalization trend among rival companies is evident in Pilgrim’s Pride, which operates in the United States, Mexico, and Puerto Rico, with its global headquarters located in Greeley, Colorado Additionally, Hormel's acquisition of Skippy, the leading peanut butter brand in China, highlights the competitive landscape in the global food market.
China has emerged as one of the largest meat markets globally, surpassing the United States in chicken consumption for the first time in 2012 With its vast and affordable workforce, China presents significant opportunities for the meat industry, a trend mirrored in India as well.
While competitors in China and India have a presence in the market, they do not fully dominate it and are not as advanced as Tyson Foods Many chicken farms in China remain small, family-run operations rather than large-scale industrial producers.
India and China are developing countries with steady economic growth.
Other markets such as Mexico, Brazil are markets that are close to home country of Tyson Foods (USA) , both in geography and consumers’ taste.
-> Tyson Foods’ main target markets are attractive and share many characteristics that the firm can take advantage of.
Tyson Foods seized a prime opportunity for international expansion, leveraging its strong financial resources and the growing global demand for meat The company is strategically targeting key markets, including China, India, Mexico, and Brazil, which present significant potential for growth in the food industry.
Export Up until now, Tyson Foods has sold products to customers in approximately 140 countries Tyson’s sales to customers in foreign countries for fiscal year 2021 totaled $ 7 billion.
Tyson Foods didn’t use licensing method.
In 2008, Tyson established a joint venture with Jiangsu Jinghai Poultry Industry Group Co Ltd to raise, process, and sell chickens under the Tyson brand in East China This was followed by another joint venture with Shandong Xinchang Group, marking Tyson's third poultry operation in China.
Tyson moved to India with a joint venture with Godrej Agrovet in 2008.
Tyson has aggressively expanded its operations in China by building more than 40 chicken farms out of a planned
90 to ensure better quality and safer chicken products for Chinese customers.
Tyson recently acquired Don Juilo Foods, a tortilla and snack firm; Circle Foods, a producer of frozen Mexican food; and Bosco’s Pizza.
Established many wholly-owned subsidiaries: IBP, Cobb-Vantress, Mexican Original, Valmac Industries, Heritage Valley, Lane Processing, Don Julio Foods…
Tyson Foods bypassed the licensing phase in its export strategy to rapidly increase market share and financial resources for business expansion As the company accumulated sufficient resources and identified internationalization opportunities, it entered foreign markets such as China and India through joint ventures Today, Tyson Foods has evolved into a multinational corporation with numerous wholly-owned enterprises.
3 Advantages and Disadvantages of entry modes
Tyson Foods has used exporting, joint venture and wholly-owned business in its internationalization Each entry mode has its own pros and cons.
Export Does not require high resource commitment, an inexpensive way to gain knowledge about foreign markets.
Expand sales to achieve economies of scale.
-> Tyson took advantage of these benefits to expand its market, exporting to about 140
Provide limited knowledge in foreign markets.
-> Tyson exported to 140 countries, but its main target markets are only a few Exporting means some unethical businesses in foreign countries could fake and imitate their products. countries.
Get access to business partners’ resources, reduce costs and risks
Political elements: Must establish a joint venture with domestic companies to enter the market in some countries like
In India, cultural and religious beliefs significantly influence dietary practices, particularly the aversion to consuming beef As a result, Tyson Foods strategically focuses on chicken processing in its Indian facilities, aligning its operations with local customs and values.
Tyson Foods has used both greenfield and M&A to penetrate different foreign markets.
In general, both greenfield and
Low risks of technology appropriation, able to control operations abroad.
Provide high experiential knowledge in foreign market.
Both greenfield and M&A have its own weaknesses:
Greenfield investments carry significant risks and costs, as they do not leverage existing relationships and may face challenges in accessing experienced managers and employees familiar with the local market While these investments can increase market capacity, they may also position the firm as a foreign entity in the eyes of consumers and competitors.
Foods to integrate different cultures, structures and technologies, and its managers have strong attachment to the parent firm.
Tyson Foods building its own chicken farm in China to ensure the best quality and gain competitive advantage.
Tyson Foods leverages mergers and acquisitions (M&A) to capitalize on established relationships and gain access to experienced managers and employees who possess valuable market knowledge This strategic approach enhances operational efficiency without increasing market capacity.
Julio Foods to expand to
-> Building its own chicken farms in
China requires a lot of time and money: In early 2014, Tyson operated around 20 farms in China and expects to operate 90 by late 2015.
M&A may face problems of integrating subsidiaries into the parent’s system, and its managers may have weak attachment.
Subsidiary and corporate level strategy
Tyson Foods operates a diversified business model across chicken, beef, and pork, which spans major distribution channels and geographic areas This strategic diversification allows them to effectively manage market fluctuations impacting each protein segment By staying attuned to consumer needs and trends, Tyson is well-equipped to offer a wide range of products, from basic meat cuts to fully-prepared meals, catering to both home and away-from-home dining The Tyson brand is highly recognized in the U.S retail market, available in grocery chains, wholesale clubs, convenience stores, drugstores, and military commissaries Their extensive product lineup includes fresh case-ready meats, bacon, canned chicken, frozen chicken items, deli meats, and rotisserie chicken, among others, while also producing private label products for major retailers.
Tyson Foods exports protein to over 90 countries and operates poultry facilities in Mexico, Brazil, China, and India, alongside a vertically integrated beef operation in Argentina The company offers branded international products tailored to local consumer preferences while also supporting the international expansion of U.S restaurant chains, especially in China.
Domestic: Back in 1929, John Tyson moved his family from Missouri to
Tyson expanded his operations by transporting affordable southern chickens to major cities like Chicago, Detroit, and St Louis, allowing him to sell at premium prices The success of his business led him to backward integrate by acquiring and managing his own chicken farms.
Foreign countries: Recently, Tyson has backward integrated again by purchasing its own farms to gain better control of sanitation and quality of chickens, especially in China.
Tyson Foods is recognizing the necessity for significant digital enhancements to maintain competitiveness in the global meat market To achieve this, the company plans to partner with a third-party digital service provider while reducing its in-house IT staff, aiming for increased profit growth in the near future.
Tyson Foods has engaged an undisclosed IT company to manage its extensive and intricate digital infrastructure, as its in-house tech department struggles to keep pace with rapid advancements According to Alan Ellstrand, associate dean at the University of Arkansas business school, food companies often find it challenging to stay updated on the latest technological developments By hiring a specialized firm well-versed in cutting-edge innovations such as blockchain technology and robotics, Tyson is making a strategic decision to enhance its operational efficiency.
Differentiation is another most commonly used generic strategy to build a competitive advantage Tyson Foods Inc uses differentiation in combination with the cost leadership strategy to achieve growth objectives.
1 Tyson Foods has improved its cost structure by investing in operations with good ROIC projects and by taking out more than a billion dollars in inefficiencies from the system.
2 The company has diversified pricing mechanisms.
3 Product mix has been upgraded to more value-added branded products to meet demand from retail and foodservice customers.
4 Tyson has implemented a buy-versus-grow strategy in chicken procurement.
5 Providing industry leading quality and customer service is a key element.
Tyson Foods Inc aims to differentiate itself by embedding innovation and addressing consumer health concerns By expanding its product line in response to changing consumer interests, the company seeks to stand out from competitors and create new opportunities within the industry This strategy combines differentiation with cost leadership, fostering a strong and loyal customer base Continuous investment in identifying unique market opportunities is crucial to Tyson's approach Notable product launches include Hillshire Farm Chicken Apple Sausage for convenience stores, all-natural chicken for foodservice distributors, Jimmy Dean frittatas and stuffed hash browns, and Ball Park frozen meats for retail club stores.
Tyson Foods Inc employs a differentiation generic strategy to distinguish its product offerings from competitors The brand's unique and distinctive logo plays a crucial role in establishing a strong brand image in consumers' minds Despite undergoing several revisions, the core essence of the brand has remained consistent, reinforcing its position as a key differentiating factor in the market.
Tyson Foods Company employs a dual strategy of cost leadership and differentiation to attract more customers in the market, with cost leadership being the primary focus The company leverages advanced technology to automate its processes and optimize its supply chain, significantly reducing operational costs This strategic approach has led to increased revenue and profits for Tyson Foods.
1 The primary objective of using this strategy is to preserve the market leadership position through efficient value chain management.
Tyson Foods Inc aims to increase its market share by focusing on the middle class, which constitutes the largest segment of the consumer market in many countries.
Tyson Foods Inc prioritizes affordability and global accessibility of its products, resulting in increased brand awareness and significant sales growth, which establishes a robust competitive advantage.
Tyson Foods Inc employs a strategy of offering discounts and coupons to meet sales targets and address competitive pressures from its closest rivals, in addition to maintaining low prices through reduced production costs and optimized supply chain efficiency.
When Tyson Foods adopt the focus strategy, they serve particular market segments and base their competitive advantage on niche marketing.
Tyson Foods Inc employs a focus strategy that emphasizes both low costs and superior value By targeting a niche market segment, the company aims to meet customer needs at the lowest possible price while prioritizing product taste, size, and design to align perfectly with consumer preferences.
Tyson Foods Inc enhances its branding strategies by emphasizing product attributes, continually updating product design and packaging to meet customer psychological expectations and optimize value for money.
Strategy formulation
Tyson Foods is positioned in the first quadrant due to its strong financial standing, characterized by high revenue, substantial income, and a relatively low debt-to-equity ratio The company's Stability Position indicates significant competition within the industry, which hinders new entrants However, Tyson Foods boasts the highest Industry Position, presenting a valuable opportunity for expansion into new markets, particularly schools, supported by the industry's robust growth rate and the company's financial stability Despite these advantages, Tyson Foods faces an average Competitive Position, primarily due to limited product diversity and a relatively small base of loyal customers.
Because Tyson Food is in the first quadrant - Aggression, our team proposes some strategies for the company to develop the market, such as:
First, it must diversify its product portfolio to increase competitiveness with competitors in the industry.
Second, improve product quality through research and high-technology application.
Third, enter the potential market with large sales volume.
Fourth, implement the backward, forward and horizontal intergration strategy.
Thanks to the analysis of the BCG Matrix, our team came up with several strategies for Tyson Food to apply:
Prepared food represents a high-growth industry with a comparatively low market share, positioning Tyson Foods to explore product and market development strategies By leveraging these strategies, the company has the potential to capture a larger share of the prepared food market and emerge as a leading player in the industry.
Beef and chicken represent key products in a thriving market characterized by high growth rates and significant market share These products offer opportunities for market penetration and the implementation of various integration strategies, including backward, forward, and horizontal integration.
Pork - the third quadrant: although the market share is large, pork fell into a recession Therefore, businesses need to increase liquidity by lowering prices and gradually reducing products
Others - the fourth quadrant: other SBUs may adopt retrenchment, divestiture, or liquidation strategies.
4 Quantitative Strategic Planning Matrix (QSPM)
The SWOT analysis identified several strategies for Tyson Foods, with two particularly appealing recommendations for the next three years being prioritized for pursuit.
2 Investment in research and development of artificial meat
Amid market tightening and the COVID-19 pandemic, meat processing companies, including Tyson Foods, faced significant labor shortages Investing in automated machinery has proven to be a viable solution, addressing workforce challenges while also yielding substantial cost savings in labor-intensive tasks like bone removal.
The demand for conventional meat alternatives is rising as consumers prioritize health, animal welfare, and environmental concerns With predictions that global meat demand will double by 2050 as the population exceeds 9 billion, artificial meat is poised to become the "food of the future." As one of the world's largest meat processing companies, Tyson Foods has the opportunity to leverage its strengths and invest in artificial meat startups to stay at the forefront of this emerging trend.
Below is a Quantitative Strategic Planning Matrix (QSPM) for Sanderson Farms that analyzes the two recommendations:
The QSPM analysis indicates that enhanced factory automation is the more appealing recommendation for Tyson Foods, achieving a rating of 2.43 compared to 2.11 for investment in artificial meat research and development Enhanced factory automation addresses immediate challenges facing the company, while artificial meat represents a potential long-term strategy for the future.
Recommendation
Thus, after the process of researching and applying models to study Tyson Food, my team would like to propose a recommendation as follows:
Tyson Foods Inc implements diverse discounts and incentives, frequently launches promotional campaigns, and presents products in appealing new packaging to drive sales growth These strategies enable the company to expand its customer base, even in a saturated market.
Invest to develop new and breakthrough products based on the following criteria:
1 develop new products that refresh or reinvent current products
2 offer new products that share a close association with current product lines
3 offer products in line with the market's consumer trends
Regularly survey customer satisfaction and receive customer comments to make timely adjustments
Apply science and technology to product research and become a supplier of high quality, unique and hold know-how that no other competitors can imitate.
Team name (Tutorial Date, time and group number)
Phạm Vân Anh 23A4050043 Đỗ Thị Thùy Dương 22A4050023
Please list the full name (first name and surname) of each team member
Team goals (Please list your team goals along with suggested measures of success)
Team goals Measure of success
Understand and apply IBS's knowlegde in this project Achieving a score of 80%
Completion of all assessment tasks on time
Achieving a score of 80% Sometimes under pressure of deadlines.
Develop teamwork skill Achieving a score of 90%
Consider your own strengths, weaknesses and ideal or preferred roles in a team, and share these with your team members Record them below.
Team member Strengths Weaknesses Ideal / preferred role
Regularly online to solve team's problems
Sometimes delay deadlines Đỗ Thị Thùy
Finish all deadlines on time
Not much talk with team
Sometimes delay deadlines Lương Ngọc
Sometimes delay deadlines Phí Phương
Rarely participate in team's task Rarely check her task
Frequently delay deadlines Phạm Thị
Please detail various group and Individual tasks below and attribute responsibility to specific team members as appropriate You should also list the scheduled and actual completion dates.
The team agrees to abide by the following guidelines for team conduct:
Behaviour Consequence of breach unequal contribution to the project task dividing score depends on percentage of contribution
Play a truant Any absence from class should be communicated via group message
The team will meet to discuss the progress of the project at the following times (e.g face-to face, after tutorial):
Sign off is required after the initial completion of the team charter.
Team member Date Sign off
Nguyễn Thị Hồng Ngát 28/09/2022 Ngát
Phạm Vân Anh 28/09/2022 Anh Đỗ Thị Thùy Dương 28/09/2022 Dương
Dương Thị Thu Hương 28/09/2022 Hương
Lương Ngọc Diễm Linh 28/09/2022 Linh
Phạm Thị Phương Uyên 28/09/2022 Uyên
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