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JBS Swift & Co. Sarah Reed Kayla Brown Rachel Barrios Misti McDowell Kevin Dimm Blair Haynes Brendan Sprague Colin Landry Carl (Webb) Holley Brandon Jeanpierre.

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Presentation on theme: "JBS Swift & Co. Sarah Reed Kayla Brown Rachel Barrios Misti McDowell Kevin Dimm Blair Haynes Brendan Sprague Colin Landry Carl (Webb) Holley Brandon Jeanpierre."— Presentation transcript:

1 JBS Swift & Co. Sarah Reed Kayla Brown Rachel Barrios Misti McDowell Kevin Dimm Blair Haynes Brendan Sprague Colin Landry Carl (Webb) Holley Brandon Jeanpierre Jane Ingram Justin R. Bardwell

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5 The central problem for JBS Swift & Co. is simply taking on more acquisitions and mergers than the company could handle in a short period of time, resulting in more debt than it could financially handle.

6  Entering the international market o They gained the capital to enter the U.S. market by being the only company in Brazil to offer stocks on the Brazilian exchange.  Buyer power would increase as JBS acquires market share  Beef is considered a commodity product with many substitutes  Supplier’s power has decreased due to JBS increasing market share  Combination of low barriers to entry, low supplier power, high buyer power, and variety of substitutes led to increased rivalry between U.S. beef packers.

7  Restructuring the organization/management at a different time and manner  At the time of the merger, the existing beef industry faced obstacles in competition, aside from other companies. Outside forces were negatively impacting the industry as a whole.  In 2008, there were many concerns of safety and sanitation problems affecting the sales to hesitant consumers unsure of product quality.  Another came in late 2007, when over 21 million pounds of US beef were recalled due to E. coli contamination, the 2 nd largest in US history.  Also, at that time, fuel and feed prices were rising, putting production costs at a high level, which was a difficult setback for an emerging company.  By entering the market and expanding as rapidly as it did, these external challenges were magnified and thus caused investors to view the huge losses as unworthy of their time and money. This was guided by Moody’s report downgrading the company’s long term sustainability.

8  Maintain a stable position in the existing market. Instead of going global right away, capture a bigger percentage of their current meat market, making sure they were completely established.  In its plan for global expansion, JBS decided to purchase an Australian beef company, 50% stake in an Italian meat company, as well as three more American beef processing plants.  This plan of action went against the company’s original core values of “we focus only on what we can control and forget the rest.”  They expanded globally at such a rapid pace, instead of focusing on the current US market competition.  Its rivalry was weakened, as its main focus became divided between the current US market and the global beef market.

9  Diversify their marketing mix by acquiring pieces of different U.S. sectors such as poultry.  By choosing to expand/diversify their marketing mix they would have become more of an attractive investment to outside investors.  Substitutes would be reduced and they would gain more market share within the different sectors.  By JBS Swift controlling so much of the market it would be hard for other firms to enter because they would have to be more willing to invest large amounts of capital in order to survive and compete against JBS Swift.  Supplier power would still be down because they would not have one single supplier getting all of their business.

10 Maintain a stable position in the existing market. Become completely established in U.S. market, and then go global.

11  To prevent this massive catastrophe from occurring, the smartest plan of action would be for JBS to continue competing in its existing U.S. market until it has maintained a stable position and established a majority market share.  This would give the company time to not only alleviate most of, if not all, its current debt, but also coordinate a full proof plan of action for entering the global market when the time is right.  JBS, and Batista, proved that its company and its management was well ahead of its time and prepared for the future like no other company within the industry.  It can therefore be said that if JBS Swift & Co. would have taken the alternative to acquire market share over a longer period of time the company, as a whole, might be in a better position than it is presently.

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