Strategic Management Analysis of Australian Agricultural Company Limited

The purpose of the report is to understand and appreciate the strategic management inputs. This includes the analysis of the operational activity and functions of the company. The company that has been selected is Australian Agricultural Company Limited that performs their business in Australia as well as in the international market. The findings of the report include that there are different factors that affect the working of the company in the market of Australia and in other countries.

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Executive summary
The purpose of the report is to understand and appreciate the strategic management inputs. This
includes the analysis of the operational activity and functions of the company. The company that
has been selected is Australian Agricultural Company Limited that performs their business in
Australia as well as in the international market. The findings of the report include that there are
different factors that affect the working of the company in the market of Australia and in other
countries. The report includes an analysis of both the internal as well as the external factors that
affect the company. In the end, the recommendations have been given to the company which
include the strategic future actions which are essential to be taken by the company.

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Contents
Introduction......................................................................................................................................3
Company analysis............................................................................................................................4
Overview......................................................................................................................................4
Product and services....................................................................................................................4
Revenue generation unit..............................................................................................................5
External Analysis.............................................................................................................................6
PESTEL.......................................................................................................................................6
Internal Analysis..............................................................................................................................8
Resources and capabilities...........................................................................................................8
Core competencies and competitive advantage...........................................................................9
Recommendations..........................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
Australian Agricultural Company has been selected for the analysis of the strategic management
inputs. This company is the largest beef producing countries in the global market which reflects
that company deals in Agribusiness food-related sector of Australia. This report includes the
complete analysis of the company that comprises of the products and services offered by them in
the market with the most profit-generating units of the company. In addition, the paper includes
the external analysis with the help of the PESTEL framework. Further, there is an analysis of the
internal factors that can be explained with the help of core competencies, capabilities and
competitive advantage of the company. At the end of the report, the recommendations of the
future strategic actions of the Australian Agricultural Company Limited have been discussed in
the report.

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Company analysis
Overview
Australian Agricultural Company Limited came into existence in the year 1824 as land
Development organisation with the support of the British Parliament’s crown allow 1,000,000
acres in the Port Stephens area of the Colony of New South Wales (Australian Agricultural
Company, 2018). The company is operating in the agribusiness food sector as it mainly includes
farms and feedlots. Australian Agricultural Company has land coverage of approx. 7 million
hectares in the area of Queensland and territory in north. AACo has headquarters in Brisbane and
company was listed on ASE in the year 2001. In addition to this, the company remain a specialist
in the field of Wagyu beef and grain fed beef (Australian Agricultural Company, 2018).
Product and services
Australian Agricultural Company processes are separated into three different segments which
include cattle, Livingstone beef and properties. The company major products and services
include breeding, finishing and processing of cattle. In addition, they produce grains and fodder
crops that contribute to the manufacture of livestock. The regular volume for the manufacture of
livestock is 1000 head (Australian Agricultural Company, 2018). This has been found in the
analysis that the company not only produces the products but they also sell the products in the
domestic as well as in the international market.
AACo owns and works a planned stability of the feedlots, properties and farms that comprise of
about 7 million hectares of land in Northern Territory and Queensland. This has been found that
each and every property of the company has a planned location in the AACo supply chain, in the

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background or finishing cattle, breeding and rising or in growing the grains and fodder crops
which contribute in supporting the cattle production (Australian Agricultural Company, 2018).
Presently, AACo company emphasis on the manufacture of the best beef crops for the exports
and domestic consumption. The beef feeds over 1,000,000 persons on the regular basis. This
helps the company to increase their market position in the sector of agribusiness in Australia
(Australian Agricultural Company, 2018).
Revenue generation unit
There is the presence of different processing units of the company that helps in generating the
revenue. The most revenue generating unit of the company is the meat processing unit which
helps the company to attain the high profit (IBIS World, 2018). Australian Agricultural
Company includes different brands such as Darling Downs Wagyu, Kobe Cuisine, Mater Kobe
and Westholme (Australian Agricultural Company, 2018). The rise in the profit is possible
because of the heavy sales. The sales of the meat were 383,036 in the year 2017 and in the year
2016 it was 428,272 which shows that they earned more profit in 2016 than the year 2017.
Though, the annual report also shows that the cattle sales of the company are quite less as it was
36,691 in the year 2017 and 61,084 in 2016 (Australian Agricultural Company, 2018). This
decrease in the revenue of the meat has taken place because the company has taken steps towards
another processing unit to earn the high profit. Along with this, the aim of the company is to
improve the quality of the product which majorly includes red meat. Further, the focus is on
evaluating the selling options with the aim of the maximizing the price fluctuations.

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External Analysis
PESTEL
PESTEL analysis is a strategic framework that is used for identifying the external factors of the
market where the company is operating a business (Baker, 2014). The analysis of the factors is
essential for the AACo because according to these factors the company will make future plans in
a competitive environment. These factors are discussed below: -
Political factors: - The political factors comprise of the changes in the rules and regulations of
the administration that affects the working of the industry (Chernev, 2018). Australian
Agricultural Company performs their business in different countries due to which there are many
political factors that create an impact. This is the reason company ensure that they perform their
business in the countries where political stability is present. The changes in the rules and
regulations related to the taxes and business policies can affect working in different countries. In
every country, there is the availability of the minimum wage regulations which is essential to be
followed by the company for which they pay high and revenue gets affected.
Economic factors: - The economic factors that majorly impact include GDP, purchasing power,
inflation of the country. The GDP of Australia scored as $1.2 trillion with the growth of 2.5%
which leads to the increase in the purchasing power of the country. The increase in the
purchasing power within country allows the users to make the purchase of the products (2018
Index of Economic Freedom, 2018). This offers the benefit to the company as they can easily
make the high profit. AACo deals in different countries so their profit gets affected in a positive
and negative manner depending on the GDP of the country.

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Social factors: - The social factors include the culture, trends and behaviour of the customers
towards the products that are offered by Australia Agriculture Company. In the current era, most
of the people are transferring towards the use of healthy products which include agricultural
products in Australia as well as in other markets (Chernev, 2018). This reflects that there is a rise
in the need of the products that are offered by AACo.
Technological factors: - Technology is changing rapidly in the current times which create an
impact on the business operations. Australian Agricultural Company needs to bring the changes
in their operations because the use of the updated technology improves the quality of the
products which ultimately brings the rise in the profit of the company. IT helps the company to
maintain their system in an effective manner and also reduce the cost of some operations for the
long run (David, 2011). Though, the use of the updated technology needs a large amount which
is essential to be spent by the company. This might make AACo make the company to source the
funds for investing them in business.
Environmental factors: - In the agribusiness sector, environmental factors play a vital role in
the functions that are performed by the company. The change in the climate and weather brings
the major changes in the operations and activities that are performed by Australian Agricultural
Company. In different countries, there are different types of environmental standards and norms
according to which the company adjust their operations (Ho, 2014). The AACo ensure that they
follow the rules and regulations.
Legal factors: - The legal factors consist of the laws and regulations that are essential to be
examined by the corporation before they begin with their processes in the country (Dawson,
2014). The legal factors remain different from each nation and not following that results in the

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company are trapped in a lawful fight that can affect their image and brand name which leads to
profitability. The company should determine that they are able to meet the legal obligations so
that they can carry out their smooth business operations.
Internal Analysis
The internal analysis includes the evaluation of the resources, capabilities, core competencies
and the competitive advantage that is maintained by the company in the market of Australia.
Resources and capabilities
Australia Agriculture Company is maintaining their resources in an effective way as it is mist for
the production system. The company develop the effective initiatives which work with the aim to
offer environmental sustainability (Frynas and Mellahi, 2015). Generally, in the business of
agribusiness, there is used of natural resources. This shows that production is done from the
natural resources which include the major use of the land, cattle’s and other. In addition to this,
the production needs the use of the natural water due to which the company keep the good
understanding related to the aquifers of groundwater so that quality of water can be managed.
Along with this, the company make use of the technology which includes different property
plans that are initiated to offer help in the identified areas with the high conservation value of
biodiversity. The company are able to identify these areas because of their capabilities which
support them ineffective management of the resources (Hollensen, 2015). The continuous
innovation and development in the business operations reflect the capability of the company for
carrying the smooth operations. For example; AACo has brought the innovation and
development in the field of the supply chain of products. In addition to this, the company is
competing for maintaining a strategic balance for the feedlots, properties and different farms that

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are a most important resource that makes the company capable enough to maintain the high scale
of productivity.
Core competencies and competitive advantage
The competitors of the Australian Agricultural Company Limited include NAPCO, The
Consolidated Pastoral Company, S. Kidman & Co., and many others. All these companies are
operating their business activities in the agribusiness sector. AACo has put in efforts which help
them to maintain the competitive edge with the competitors. The innovation and development in
the supply chain have offered a competitive advantage as they can easily supply their products
across the different parts of the world (Grant, 2016). The company can easily align this with the
production numbers of internal cattle. Further, the quality that they offer for meat and cattle in
the market is considered as the competitive advantage for the company which helps them to
grow. All these competitive advantages help the company to compete with the competitors.

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Recommendations
 The analysis reflects that the company is performing different functions with the use of
effective strategies. Now, it is the high time that the company should focus on effective
and maximum utilization of the resources instead of the diversification of products.
 It is suggested to the company to make use of the latest technology that helps them to
reduce the time consumed in the operations of the products. This will not only reduce the
cost invested by the company but also saves the time which can be utilized by them in
other ways. Though, they need to ensure that they are not compromising with the quality
of products.
 The company should make use of the digital marketing techniques that could have helped
in attracting and retaining the customers.
 It is suggested to the company to expand their business operations in the foreign countries
by making use of the proper strategic direction.

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Conclusion
The above analysis concludes that Australian Agricultural Company is considered one of the
finest beef producers in Australia and global market. The company is able to score the position
by offering high-quality products in different countries including Taiwan, Russia, Chile, Japan,
USA and others. The analysis of the company is done which shows that the company has a vast
area of land for the cattle with the units processing the production of beef. The company has
analysed their target market to which they offer these products. This has been found that most of
the revenue is generated by the company from the meat business. The analysis of the external
factors has been done that can affect the operations with the help of PESTEL analysis. The
analysis will help the company to make the strategic decisions in the near future. Along with this,
the internal analysis has been done which reflects the strengths of the company that helps them to
grow in the market. In the end, the report includes the recommendations that will help the
company in making the future plan.

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References
2018 Index of Economic Freedom (2018) Australia [Online]. Available from:
https://www.heritage.org/index/country/australia [Accessed on 17th November 2018]
Australian Agricultural Company (2018) Cattle, breeding & Genetics [Online]. Available from:
https://aaco.com.au/operations/cattle-breeding-genetics [Accessed on 17th November 2018]
Australian Agricultural Company (2018) Livingstone Beef [Online]. Available from:
https://aaco.com.au/operations/livingstone-beef [Accessed on 17th November 2018]
Australian Agricultural Company (2018) Our Brands [Online]. Available from:
https://aaco.com.au/our-brands [Accessed on 17th November 2018]
Australian Agricultural Company (2018) Our History [Online]. Available from:
https://aaco.com.au/about-us/our-history [Accessed on 17th November 2018]
Australian Agricultural Company (2018) Our Properties [Online]. Available from:
https://aaco.com.au/operations/properties [Accessed on 17th November 2018]
Australian Agricultural Company Limited (2017) AACo 2017 Annual Report [Online]. Available
from: http://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_AAC_2017.pdf
[Accessed on 17th November 2018]
Baker, M. J. (2014) Marketing strategy and management. London: Palgrave Macmillan.
Chernev, A. (2018) Strategic marketing management. Chicago:Cerebellum Press.
David, F.R. (2011) Strategic management: Concepts and cases. India: Pearson/Prentice Hall.

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Dawson, J.A. (2014) The Marketing Environment (RLE Marketing). New York: Routledge.
Frynas, J.G. and Mellahi, K. (2015) Global strategic management. USA: Oxford University
Press.
Grant, R.M. (2016) Contemporary strategy analysis: Text and cases edition. New Jersey: John
Wiley & Sons.
Ho, J.K.K. (2014) Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
Hollensen, S. (2015) Marketing management: A relationship approach. India: Pearson Education
Limited.
IBIS World (2018) Overview [Online]. Available from:
https://www.ibisworld.com.au/australian-company-research-reports/manufacturing/australian-
agricultural-limited-company.html [Accessed on 17th November 2018]