Porters Five Forces

Discuss about the Business Environment of NAPCO.

Business Environment is indicative of all the internal along with the external factors that affect the manner in which the company functions. Understanding in relation to the environment in which a business operates is essential for the successful running of the business. The environmental factors have a bearing in each aspect of the business like nature, location, price along with the distribution system. North Australian Pastoral Company (NAPCO) is a private company within that of the Australian cattle industry (Napco.com.au., 2018) It was established in the year 1877 and the main business of the company pertains to beef production. Key resources in relation to the company is a herd that consists of 200,000 cattle along with that of cattle stations that covers 5.8 million hectare of the land. NAPCO has got 13 cattle stations across that of the Queensland along with that of the Northern Territory. The report focusses on the external along with that of the internal forces that influence NAPCO. The report analyses whether the internal environment of the company can adjust with that of the external change taking place within the industry and in the environment.

Porters Five Forces

Threat of new entrants

The Australian government is instrumental in providing development funding and the Australian government helps in facilitating management of issues that have national importance. Government works very closely with that of the industry in relation to market access and it helps in furthering interests in relation to the industry (Rolfe et al., 2016) This makes the threat coming from that of new entrants to be low.

Threat of substitutes

Meat and Livestock Australia (MLA), JBS Australia, Australian Agricultural Company are the main producer of red meat and hence the threat that NAPCO faces in relation to this industry is quite stiff (Dizyee, Baker & Rich, 2017) The buyer can easily switch from that of one company to that of another one.

Bargaining power of customers

The buyer switching cost is minimal which makes the bargaining power of the customers to be very high. There are other firms in the market who produce beef and information about these companies can be got from a wide variety of sources.

Bargaining power of suppliers

There are different meat suppliers like that of Holco and Sanger Australia that acts as meat suppliers. They help in supplying the labour and raw materials in relation to beef production and hence the bargaining power of the suppliers can be said to be very high.

NAPCO’s SWOT Analysis

Industry Rivalry

The intensity in relation to competitive rivalry can act as the major determinant in relation to competitiveness of industry. NAPCO faces competition from that of other beef producers in Australia and hence the industry rivalry can be said to be very high (Akhtar et al., 2018).

NAPCO has purchased the backgrounding property by the name of Goldsborough and the adjoining northern property that was called Mittiebah. NAPCO has also leased lands to that of Maranoa along with that of Central Queensland. The beef prices being low along with that of the decline in relation to Japanese exports are the internal forces that affects NAPCO. NAPCO is responsible for controlling the product through different stages in relation to production (Walsh & Cowley, 2016) It has got a supply chain that is vertically integrated pertaining to that of high quality beef. NAPCO has 200,000 head of the cattle and the cattle of NAPCO are famous for their superior quality along with that of quietness.

Strength- NAPCO has got a superior supply chain that is vertically integrated. The process of composite breeding practiced by NAPCO helps in capitalisation of the preferred traits in relation to cattle. The integration of livestock system with that of forestry can help in dealing with the changes taking place and it can lead to superior farm productions (Pereira et al., 2016).

Weakness- There are overhead expenses that NAPCO has to bear and immunizations of the cattle has to be done on regular basis. A large amount of expense are spent on that of storage buildings along with that of veterinary care in relation to the animals.

Opportunities- There are stations in different places like that of Alexandria, Boomarra, Cungelella, Kynuna, Landsborough and Marion Downs. The stations are dispersed in different places in Australia  and the consumers can hence take the opportunity of buying meat from these stations (Bray et al., 2016)

Threats- Beef export is supposed to decline further within that of 2012-23 on account of high domestic production. Climate change is also posing to be a threat and it has been estimated that climatic conditions will continue to grow warmer and will become dry thus posing a threat for NAPCO

The purchasing of property by NAPCO can greatly help the organization in making use of the land in which they can stock modern machinery along with equipments. During the drought conditions, one may have to start hand feeding that can help in ensuring pasture survival. Large amount of land can hence help in this regard. The beef prices are low and this is the reason why many companies are trying to enter the market so that it would be able to make huge amount of profits. The vertically integrated supply chain of NAPCO would help it to rise above the competitors in the long run and it can greatly benefit the organization (Cottle et al., 2016) It needs to build on the arena of sustainable pasture management that can help it to make profits. Nutritional management pertaining to the herd that is carried out at NAPCO can greatly benefit the business of NAPCO. Composite breeding that is practised by NAPCO will help in ensuring the superior quality of the health of the cattle that can give it an competitive edge over that of the competitors. NAPCO has to cope with a lot of overhead expenses like that of immunization and the active help coming from the Australian government can help in providing the funding that can greatly benefit the business of NAPCO (Willis, Nelson & Brown, 2017) The Australian government takes major steps for managing issues that has got national importance and it can help the business of NAPCO to make profits. NAPCO has got various stations spread across that of Australia that will help it to move ahead of their competitors. There are other beef producers like that of Meat and Livestock Australia and JBS Australia that pose a threat to the value of NAPCO and NAPCO would be able to deal with this challenge with the help of the stations that are spread throughout the length and breadth of Australia (Waage & Anderson, 2017). Climate Change would pose to be a threat for NAPCO in the coming years. Changes in temperature along with that of carbon dioxide level can affect the composition in relation to the pastures as it can alter the dynamics in relation to species competition. Integration of livestock and forestry can act as a sustainable method that can greatly benefit the business of NAPCO.

Recommendations for NAPCO

Introducing tropically adapted cattle breed within that of genetic improvement program has helped in improving the fertility in relation to the animals of NAPCO. NAPCO has been instrumental in developing that of composite cattle breed that can adapt itself to environmental conditions. Slow growth in relation to cattle results from that of consumption of the low digestibility can increase the rate of emissions intensity. By the plantation and utilisation of the perennial fodder seasonal fluctuations can be reduced in relation to feed supply that can help in improving the animal performance. The grain based rations help in supporting higher rates in relation to growth and it can lower the daily rate in relation to methane emission. The move made by NAPCO of minimum-tillage grain production can reduce the element of carbon cost pertaining to grain production. The cattle in NAPCO are kept under monitoring before that of feedlot entry and at time of feedlot finishing (Coleman, 2018) This can help in removing the underperforming cattle with the help of the supply chain. It can help in increasing the feed-use efficiency and can thus help in lowering that of the emissions intensity. These programs can help in improving animal profitability. Emissions reduction along with that of sequestration opportunities are asked for in relation to general farming (Napco.com.au., 2018).  On account of climate change it will be important that operational flexibility exists in NAPCO that can help it to successfully deal with the changes. Practical understanding in relation to the biological process can help NALCO in the arena of extensive rangeland grazing. It can help in facilitating the aspect of adaptive management pertaining to emissions. Adaptive approach are required in the industry like that of efficiency in relation to power generation that can help in dealing with that of greenhouse emission.

References:

Akhtar, P., Khan, Z., Frynas, J. G., Tse, Y. K., & Rao?Nicholson, R. (2018). Essential micro?foundations for contemporary business operations: Top management tangible competencies, relationship?based business networks and environmental sustainability. British Journal of Management, 29(1), 43-62.

Bray, S., Walsh, D., Phelps, D., Rolfe, J., Broad, K., Whish, G., & Quirk, M. (2016). Climate Clever Beef: options to improve business performance and reduce greenhouse gas emissions in northern Australia. The Rangeland Journal, 38(3), 207-218.

Coleman, A. (2018). A forum that benefits the red meat industry and consumers. Farmer’s Weekly, 2018(18006), 30-31.

Cottle, D., Eckard, R., Bray, S., & Sullivan, M. (2016). An evaluation of carbon offset supplementation options for beef production systems on coastal speargrass in central Queensland, Australia. Animal Production Science, 56(3), 385-392.

Dizyee, K., Baker, D., & Rich, K. M. (2017). A quantitative value chain analysis of policy options for the beef sector in Botswana. Agricultural Systems, 156, 13-24.

Napco.com.au (2018). The North Australian Pastoral Company. Retrieved 24 April 2018, from https://www.napco.com.au/

Pereira, M. A., Fairweather, J. R., Woodford, K. B., & Nuthall, P. L. (2016). Assessing the diversity of values and goals amongst Brazilian commercial-scale progressive beef farmers using Q-methodology. Agricultural Systems, 144, 1-8.

Rolfe, J. W., Larard, A. E., English, B. H., Hegarty, E. S., McGrath, T. B., Gobius, N. R., … & Musgrove, R. J. (2016). Rangeland profitability in the northern Gulf region of Queensland: understanding beef business complexity and the subsequent impact on land resource management and environmental outcomes. The Rangeland Journal, 38(3), 261-272.

Waage, S., & Anderson, R. (2017). Recreating natural-resource-based businesses: sustaining the land and communities in the US New Northwest. In Ants, Galileo, and Gandhi (pp. 109-125). Routledge.

Walsh, D., & Cowley, R. (2016). Optimising beef business performance in northern Australia: what can 30 years of commercial innovation teach us?. The Rangeland Journal, 38(3), 291-305.

Willis, M., Nelson, B., & Brown, K. (2017). Extension through Grazing BMP: An integration of production and natural resource management. Rural Extension and Innovation Systems Journal, 13(2), 156.