1 Strategic Positioning Under Agricultural Structural Change: A Critique of Long Jump Co-operative Ventures

Structural change is a disruptive process. Whether you are in the steel industry in the 1970's or production agriculture in the 1990's the effects are extremely unsettling (Rose and Thomas, 2000; CP, 2000). Producers are being forced to either exit the industry or adopt new business models, but to accomplish this they are faced with the difficult task of strategically repositioning themselves. Just in the state of Illinois, for example, there are currently forty value added processing business plans in development (Saputo, 2000). These long jump ventures into processing are risky though and raise important fundamental questions about how producers select appropriate strategies; the subject of this manuscript. Specifically, this manuscript addresses three aspects of the strategy process. The first is whether long jump type ventures such as hog slaughter or ethanol production are strategically sound. The second aspect is a discussion of how firms develop sound strategy. Third, using this understanding of strategy, the paper offers relationship management and service innovation as an alternative to long jump brick and mortar investments for creating value. Finally, a case study of the Wairarapa Lamb Cooperative demonstrates an application of relationship management. The effects of structural change in North America are especially acute for grain farmers and hog producers. The rate of exodus of independent farmers is startling throughout the prairies of Canada and the Midwest U.S. A recent article in the Canadian press stated that 6,000 farmers were forced out of business in 2000 and 6,000 more will be forced out in 2001 (CP, 2000), a 7