Environmental Analysis of Yu Ranch: Key Findings, Porter's Five Forces, and SWOT Analysis

This document provides an environmental analysis of Yu Ranch, focusing on key findings, Porter's Five Forces Model, and SWOT Analysis. It discusses the internal and external factors affecting the business, including competition, substitutes, new entrants, suppliers, and customers. The document also offers primary recommendations for improving the distribution system and renting more land for animal culturing. The analysis highlights the need for Yu Ranch to expand its business and increase its market presence.

MAIN BODY
TASK 1
ENVIRONMENTAL ANALYSIS
Key findings
Internal factors: Animals which are cultured with the conventional techniques to fed them. They
use only grass to fed them, it maintains the quality of the beef meat for their consumers and
possess high nutritional values. The relationship with the farmers from which MR Gilvesy obtain
hay are very good, it helps them to obtain the raw material and maintains the supply chain.
External factors: In beef industry, conventional technique used at large scale and it values higher
in market. So it gains the competitive advantage. Next Yu Ranch need more land for animals, as
its demand is higher in market but the cost of the land is raising day by day which possess
increment in expenses. Some major competitors dominate the market and take the competitive
advantage.
Porters Five Forces Model
Competition in industry: in the beef manufacturing industry, the big players (related to meat
business) are there in the market who dominates the market. To gain the competitive advantage
they supply large number of meat products to consumers and consecutively they increase the
number of culturing the animals. They make availability the meat products to the consumers at
low prices. It harms the business of Yu ranch while they fed the animals with chemical free grass
and it enhances the nutritional values in the pets.
Threat of Substitutes: Second force is substitutes, there are various substitutes of the beef
manufacturers are present in market. Other products in meat are available like chicken, meat pig,
buffalo, goat etc. these products are also consumed by the buyers. They are available at low
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prices and possess equal nutritional values. So the Gilvesy has lacked in taking the competitive
advantage at fully.
Threat of new Entrants: Due to the consumption rate of the meat products is higher and
increasing day by day, it pushes the new business players in this industry. They do the market
research and get to know about the demands of the audience. It motivates them to step into this
business. But they have to face some entry barriers like they have to follow the government
procedures, laws related to environment, and tax duties.
Bargaining power of Suppliers: Suppliers of the raw materials are play important role in any
industry. If there are large number of manufacturers of raw materials are available in the market
then the negotiation power of the suppliers are low else it is high. In beef manufacturer industry,
there are various suppliers of animals exist. So it risks lower for the increment in the price of the
raw material. While the land expenses are increasing continuously so it possesses higher risk for
the business.
Bargaining power of Customers: As there are large number of options of met products available
in the market, so it increases the bargaining power of the consumers. Yu Ranch has limited
distribution like they have only collaborated with specific hotels and partners to sell their meat
products. It lacks him to earn the essential profit margin.
SWOT Analysis
Strengths
 Qualitative meat products due to not using a chemical fertiliser, herbicides etc. in their
food like grass.
 Gain the stability.
Weaknesses
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 Not expanding the number of the cattle in their farm for culturing.
 Increment in expenses (Moran and et.al., 2017).
 Limited distribution system.
 Not seeing the potential of the business.
Opportunities
 Customers for the beef products are ready to pay more for theses nutritional food.
 Hotels are looking for these kinds of beef for the preparation of the food.
 Maximise the supply for the beef products in market.
Threats
 Expansion of large marketers in beef manufacturing industry.
 Growing cost land.
 Unawareness in public about the grass fed beef.
TASK 2
Primary Recommendations
 Need to improve the distribution system.
 Renting more land for culturing the animals.
Need to improve distribution system:
Reasons
1. As the demand of the meat products are very high in the market, so Yu Ranch has to
contact with other clients to sale their products. It helps them to achieve more profits.
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2. Due to higher consumption of the meat products, it is required to reach more potential
buyers. Also, this would benefit the health of the people and spreading awareness among
them.
Renting more land: Land is required for the culturing of the hay and maintaining the supply
chain.
There are reasons for these points like demand of beef meat is increasing and it would help in
maintaining the supply chain.
1. As the total revenue generated by the Yu Ranch is $482,180 and the cost of owned land is
$120,120. Income from farm excluding taxes $158,910. Other cost for production including
purchasing of hay, production and distribution, etc. cost is approximately $128,510. The
operating cost is $75,000, so it reaches to annual gross income $279,030. So these figure tells
that it can proved profitable for the Yu Ranch in terms of the expansion of their business.
2. Land used by Yu Ranch 283 acres and required land is 340 acres. So according to the given
graph about the land renting cost in south Oxford the land values $16000 in 2013, but as per the
increased requirement of the meat products it helps the Yu Ranch to easily adjust the cost of
land. It can be expense up to $120,000 more in obtaining half of the required land which will be
sufficient for expanding the business.
As MR Gilvesy is not interested to expand their business but due to increased
consumption of the healthy eat products, it must focus to expand their business. Yu Ranch has
good relation with the farmers which supply them hay, it will be more profitable to culture the
animals at wide range. So renting the land will be prominent for him. This may increase the
expenses of the Gilvesy but it would be managed by increasing the distribution system.
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Above proposed suggestions help to develop the business and the more public will get to
know about the beef products it would increase the sales as well. As Mr. Gilvesy provide the
nutritional values products of beef, it helps to maintain the people health and does not harm their
body.
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