Challenges of Massive Quality Farms Limited - Case Study Example

HBN110N Introduction to Entrepreneurship MASSIVE QUALITY FARMS LTD Prepared by FRENCH BEAN GROWING BY MASSIVE QUALITY LTD The new product/service being launched Massive Quality Farms Limited is a provider of high quality non-processed and processed French beans for local and international buyers. Massive Quality Farms Limited has developed capacity around a strong technical base and aims built trust as a reliable supplier. Massive Quality Farms Limited will acquire a 28 acre farm for the purposes of irrigated farming, packing and delivering French beans. We are exclusively “The French beans people” and this distinguishes us from our competitors who are “horticultural people”. Massive Quality Farms Limited is well positioned to be a market leader in French Beans sector because of its unique French beans focus with a strong emphasis on consistently building the team’s technical expertise. Who would buy the service and how to research them We shall have 4 categories of customers, Exporter Broker (6 identified), Exporter (3 Identified), European Importers and local retail chains such as IGA, Coles and Woolworths supermarkets. This skill set of the 5 executive boards includes Bsc/Msc Food Science & Tech, MBA, B.A. Economics, M.A. Human Resources, PGD Marketing, LLB, Dip Law, CPS & Accounting. The executive board members have a wide range of experience in FMCG agribusiness, Logistics, Technical consultancy, Legal practice and accounting. The team is well suited to deliver the commercial objectives of the business. Problem being solved and the opportunity being presented The Australian government has crafted a decade long projection of the fruit and vegetable sector. The aim of this noble idea is to identify forth hand what are the likely challenges the country may face with regard to her supply of this important commodity for the sake of food security and prosperity. French beans is a highly nutritious easy to prepare product that grows in less than three months. This versatile crop is very easy to grow with or without irrigation. Our consumption of French beans has been on the increase thus fueling the demand (Queensland Government 2012). Our products are primarily extra fine French beans with deep green colour, ranging from 3-5" long. Very straight, round, and slender with a pronounced "grassy" taste and soft skin .They have long, slender pods with intense colour and flavor and there are no strings to remove, so only the ends need trimming when cleaning them. We have two products; a) Pre-Processed Beans Figure 1: Fresh French beans These are beans harvested from the farms to be sold to larger farms and middle men. This product has low production cost however it fetches relatively low returns. The bulk price is tagged at AUD 1 per Kilo b) Processed Beans Figure 2: Processed French beans These are beans that have been harvested and packed for export or local retail chains. Due the high cost of export logistics, the production cost is high; however customers are willing to pay a premium for this product. The bulk price is tagged at US $ 3 per Kilo (Export) and US $ 0.8 per Kilo (Retail Chains). The quality specifications are tailor made to suit our customer requirements. We process according to the strict HACCP/EUREPGAP guidelines on Food Safety. Our competitive advantage is our ability to deliver quality with a price advantage. The current situation in Australian demands continued supply of the fresh produce for a healthy nation. In this content food produce are at the forefront of ensuring sustainability in food supply along the food value chain. The unpredictable changes and fluctuations in weather conditions are such that early maturing crops and those that can be processed and kept for a long time have the best chance of helping Australia improve her food security and healthy nutrition. Through Massive Quality limited we plan to contribute to this situation by offering a solution by tackling the challenge of enhanced capacity for growers. As a fully charged farm in control of all the major process steps within the value chain, we are capable of providing this good at reduced prices. The market for the product Our target customer’s fall in the categories listed below. Since this is a highly perishable product, it is critical that the market is keenly reliable and able to support the massive production by our farm. a) Exporter Brokers (Middle men) b) Exporters c) European Importers d) Local retail chains Exporter Brokers are business people who primarily purchase cheap lower quality pre-processed beans in bulk on behalf of Exporters. They have trucks for collecting the beans at the farm gate. We shall identify six exporter brokers to work with us as a fall back plan in case we fail to secure a deal with a processor. Exporters are medium/large businesses which purchase cheap lower quality pre-processed beans then process and pack it for the European importers. Exporters are mainly located next to international airports. European Importers are large businesses which purchase premium high quality processed beans for European Wholesalers and supermarkets. These business people are located in European ports. Local retail chains include supermarkets such as IGA, Coles and Woolworth who end up selling the product to middle-high end consumers. Current and future market trends Our products have high demand in a fast growing industry. Our customers are cost conscious and would prefer dealing with an organization that specializes on French beans processing. Unlike our competitors who pursue a diversification strategy, we give our products detailed attention that meets our customers’ requirements. In order to identify our customers, we will register and participate in activities and events of the Fresh Produce Exporters Association of Australia. We will achieve customer satisfaction by constantly improving our supply chains capabilities in quality, cost and delivery and finally, we will keep our customers by conducting frequent customer survey and promptly acting on the customer recommendations. We will promote our products primarily via word of mouth through our stakeholders i.e. suppliers, customers, employees, government agencies, Australian Association of manufacturers, network of friend and professionals. We will use the internet as our advertising media. The purpose would be to build the brand, image and reputation of the firm to potential customers. On our website, we will project an image of an organization that can delivery top quality products reliably in an environmentally friendly way. The future of this farming and processing venture is lucrative. Given the Governments’ renewed commitment to ensure sustainability of the horticultural, fruit and vegetables sectors this is a core focus. We expect a continued growth at 20% which will result in our owning of at least 1.5% of the local French beans processing market in Australia. The global trend shows a remarkable increase in demand of other protein sources rather than those from the animals. How money and social wealth shall be made The figure below shows our expected sales projection from the first month of our operations. The ripple effect coming from this business shall find its way into the local farmers thus increasing their capacity to earn. We envisage making money through sale and export of our products which shall be either processed or none processed. Second we shall make money through concessions from the Government aimed at supporting local industry processors. ACTIVITY June-12 July-12 Aug-12 Sept-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 April-13 May-13 Non Processed french beans (Local)     405,000 - 864,000 5,184,000 2,592,000 2,592,000 1,296,000 1,296,000 1,296,000 1,296,000 Processed french beans ( Local)         - - - - 1,728,000 1,728,000 1,728,000 1,728,000 Processed french beans ( Export)       - - - 10,368,000 10,368,000 10,368,000 10,368,000 10,368,000 10,368,000 - - 405,000 - 864,000 5,184,000 12,960,000 12,960,000 13,392,000 13,392,000 13,392,000 13,392,000 Figure 3: Cash flow projections for the Massive Quality farm Reference List Queensland Government 2012, ‘Green Beans’, Department of agriculture Fisheries and forestry, Available from: < http://www.daff.qld.gov.au/26_14937.htm>. [11 September 2012] Read More