ADM Company Analysis

Answer

ADM Company Analysis

Executive Summary

Archer Daniels Midland Company (ADM) is a company which concentrates in the production, storage and distribution of Agricultural products used for animal feeds. The company’s products are environmentally friendly and are thus alternatives to the traditional chemicals. The company’s main products are corn wheat and soy, which are largely used in the United States. The company is thus significant to food and beverages businesses and farmers. Besides being America’s greatest supplier, ADM Company has also gained International market share in South Africa, Canada, Chile, China and Thailand. ADM Company is indeed a stable and profitable company due to its performance and success in the Agricultural industry. Allowing ADM to do business in our country will boost our nation’s economy which will enable us to gain a competitive advantage in the global market. Moreover, the company’s products are environmentally friendly and are more likely to restore our degrading environment. I, therefore, recommend the company to do business in our country for the better of our economy and environment.

Company Description

ADM Company is an Agricultural based company which sells Agricultural products across the globe. The company has provided employment for over 32,000 persons in more than 160 countries. The company has a global value chain of approximately 500 procurement sites, 250 manufacturing sites, 38 innovation sites and an extensive transportation network to distribute its products across the globe (ADM, 2017). ADM is thus a major company across Asia, Africa, America and Europe continents. Other than providing employment, the company engages in other social responsibility services such as creating investment programs as well as AM cares for a better community. Precisely, corporate social responsibility is the nature of the ADM which has enhanced its performance in many countries across the globe. The company further acknowledges the importance of quality products for customer satisfaction. The company, therefore, engages in training and development programs to enhance the employees’ technical and leadership skills for the sustainability of the enterprise.

International Strategy

ADM Company’s goal is to increase its returns as well as economic value for its business. For the accomplishment of its goals, the company has set an international strategy by creating a global value chain across the world. The company, therefore, produces goods which are significantly important across the globe. For secure distribution of raw materials and finished goods across the continents, the company uses global transportation networks such as oceangoing vessels, trucks and trailers and railcar. ADM Company has therefore set competitive standards for its industries using various strategies. Firstly, the company has optimised its core business by increasing its marketing strategy. The company has further leveraged technology to gain a competitive advantage in the contemporary world. ADM Company has incubated an expansion platform and has thus expanded its business beyond its geographical boundaries. Secondly, the company provides quality products which are favourable to all environments across the globe. By producing environmentally friendly products, the company anticipates winning advantage over various companies producing agricultural commodities which are more likely to harm the environment. Thirdly, creating customer value is an important aspect of the company’s customer service department. The company, therefore, provides after purchase services such as delivery not considering the customer’s geographical location. The company, therefore, hopes to gain more customers across the globe further increasing its anticipated market share.

Despite its competitive advantage, ADM Company has various weaknesses that make it less competitive in the market. Firstly, fluctuating energy and raw material prices have negatively affected the production costs of the company’s products making its commodity prices volatile (Cecava et al., 2014). Secondly, there is reducing demand for flavor enhancements, preservatives and artificial sweeteners products which are the part of ADM’s organic products. The company sales are therefore more likely to be affected by such declines which might affect the Company’s overall production. However, not considering its weaknesses, ADM Company is still thriving in the contemporary business world.

ADM Marketing Strategies

ADM Company sells products in approximately 160 countries across the globe. ADM is the number one Agricultural production company in the USA. ADM company is however not the only Agricultural and food production company in the world. ADM Company is therefore challenged by other Agricultural production companies such as Tyson Foods Inc and Bunge Limited Company. ADN Company has, however, implemented various marketing strategies to gain competitive advantages and emerge the leading agricultural food production company in the globe. Firstly, the company has developed differentiation strategies to achieve a unique identity in the market. The company, therefore, produces quality products which are environmentally friendly, as opposed to the traditional chemical products manufactured by other businesses (ADM, 2017). Secondly, the company employs a defence and attack strategy while introducing new products in the market. The company produces products which satisfy the needs of the customers. ADM further creates high brand equity for its products and engages in promotional activities to create brand awareness. Thirdly, the company engages its clients in its production plans to create a sense of belonging. For instance, the company pre-communicates to its customers about its plans. The communication strategy is identified to create a competitive advantage for the company since its competitors are more likely to concentrate on increasing market share while avoiding competition (Skaalsvik & Olsen, 2014). Fourthly, the company employs pricing strategies to increase sales upon launching a new product. The company, therefore, puts slightly lower prices to its new quality products. Diversification is also another marketing strategy employed by ADM by selling its products across the globe. Through diversification, the company creates awareness for its products thus increasing its sales in the global market (Rothaermel, 2015).

ADM’s Logistic Approach

ADM Company employs a unique approach to reduce costs and increase the value of its shareholders. The company therefore identifies and selects suppliers who provide quality products at relative prices. Besides delivering quality goods at relative prices, ADM Company acknowledges the importance of creating good relationships with suppliers to avoid shortages in the market. The company, therefore, selects its customers carefully to ensure their commitment to delivering services to the company. The company thus selects suppliers who comply with the laws and regulations in their respective environments to observe the ethical code of conducts and do business in a fair manner without exploiting the financial resources of the company (ADM, 2017).  Due to its extensive coverage, the company’s procurement department works with international, national and regional contractors to ensure a consistent supply of raw materials to all its industries worldwide.

ADM’s Human Resource Management Approach

Human Resource Management departments are bound to face different challenges at different times. Creating job opportunities for diverse groups is a primary requirement of for companies investing in other countries. For ADM, delivering quality products and services is one of the core values of the company. Due to its wide coverage, the HRM department faces challenges employing adequate and skilled employees to its industries across the globe. Moreover, due to technological changes, employees’ require skill advancement to produce according to the current societal needs. The ADM HRM is therefore faced with various challenges today. Firstly, due to increasing competition, the HRM needs to employ skilled and talented employees for its workforce. Secondly, the company needs to create good employee relationships to ensure attraction and retention in the company. Thirdly, the company needs to train future leaders for the company to fit in the company culture. The company’s human resource department has therefore employed various strategies to deal with emerging issues in the workforce. The company offers training skills where the employees are trained about the technical aspects of the company (ADM, 2017). The company, therefore, maintains a highly skilled workforce and manages its employees through motivational skills. For future leaders, the company offers leadership training skills where the employees are trained on the company culture, how to become transformational leaders and how to maintain highly appreciated employee networks. The company also offers career development programs where students are enrolled for internships in the company. Through an internship in various areas ranging from engineering to occupational health safety, the company anticipates gained more skilled employees in the future.

Summary

Allowing ADM Company to do business in our country would be of great advantage to our country for various reasons. Firstly, the company would create employment and increase the country’s social status. Moreover, increasing the country’s workforce will eradicate poverty further increasing our country’s GDP. Secondly, the issue of environmental degradation would be countered if we allowed ADM to conduct business in our country. From the company, it is clear that the company produces goods which are environmentally friendly. Allowing such companies in our country would counter the issue of global warming which has had adverse effects on our environment. Thirdly, the company engages in corporate social responsibilities. The company has therefore implemented various programs such as ADM to enhance the health in their environments. By allowing the company to do business in our country, our people are more likely to benefit from the programs. Moreover, the company offers career development programs which are more likely to benefit our students. Finally, the company is identified to be stable and economically profitable. Allowing ADM to do business in our country would, therefore, help us gain a competitive advantage in the global market.

Conversely, there are risks that our country is more likely to experience upon allowing ADM to do business in our country. Firstly, companies producing agricultural products in our country are more likely to close down due to the emergence of the giant company Graham & Wang, 2016). Secondly, allowing the business in our country might deteriorate our natural resources due to its global distribution network.

Conclusions and Recommendations

Conclusively, despite the risks more likely to occur upon allowing the ADM to conduct business in our country, they are outstood by the benefits of the Company to our country. Since our country anticipates gaining competitive bargaining power in the globe, we should allow the company in our country. Furthermore, environmental issues have been our greatest challenge over the past years. We have therefore found at hand solution for the problem and should take advantage of the company for our country’s gain. I would, therefore, encourage the ADM Company to do business in our country.