In times past achieving economies of scale, spreading risk
through diversification and cutting costs were effective strategies
to increase profitability in the agricultural industry.
Fast forward to today and the landscape has changed for agriculture. With that changing landscape so have the strategies changed for success.
Increasing regulatory requirements, continually rising input costs, the impact of technology, changing consumer demands, low cost global competition, climate considerations, government policy (the list goes on) are all challenges facing the modern producer. Pharos Investments is acutely aware of the challenges facing the agricultural industry and predicts that they will only get worse. Given this scenario Australian Agriculture is a great investment, continues to grow as a percentage of GDP and has an outstanding global reputation.
Working within this challenging environment Pharos works with its Rural clients to develop and implement fit-for- purpose strategy to maximise returns and reduce risk.
Some of the more common strategic interventions available to this sector include:
Controlling more than one stage of the supply chain. In many instances the capital investment required is smaller than anticipated and quite within reach of the rural enterprise.
Developing capability for supervisors and managers in leadership/ management, planning, procedure and process is essential for staff retention, achieving efficiency and managing risk.
Although a term more synonymous with manufacturing, time to market has a significant impact on price. Having the desired product at the right time to maximise returns can dramatically impact the bottom line.
Identifying what roles/ work should be performed internally and identifying those suitable for outsourcing (full or partial). A Selective Sourcing Strategy is widely used to inform investment decisions on machinery and labour in particular. This strategy is closely related to time, return on investment and leverage.
Many operations are owned and controlled by multiple partners. Implementing a framework to manage potential conflicts of interest and disagreement is a commonly used strategy.
Having a yearly plan with clearly defined measures, targets and accountabilities can form the basis of a simple but effective monitoring system
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