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BUS305 Small Business Management

Published : 15-Sep,2021  |  Views : 10

Question:

Write brief history of Land O’Lakes.
 
Write Nature and Structure of Land O’Lakes.
 
Expain the Stakeholders of Land O’Lakes.

Answer:

Introduction and brief history of Land O’Lakes

Land O’Lakes is an agricultural cooperative company owned by farmers based in Minnesota, USA and it is not traded publicly thus having no listings under any stock exchange.

The net earnings garnered by the three businesses of the company in 2016 amounted to 320 million dollars. The Dairy Foods sector witnessed high growth in its share and resulted in the sales of nearly four billion dollars and seventy million dollars as pretax earnings.

The company owns four businesses namely Land O’Lakes Dairy Foods, WinField United Crops Inputs and Insights, Purina Animal Nutrition and Land O’Lakes SUSTAIN with Chris Policinski as the President and Chief Executive Officer  ("Search | OPEN Forum", 2017).

Chris earned his management degree from New York University. He joined the company in the year 1997 and in less than ten years, he was made the CEO in the year 2005. Chris has led companies like Kraft General Foods, Bristol-Myers Squibb and The Pillsbury Company before Land O’Lakes ("chris policinski + land o'lakes - Bing", 2017).

Other high ranked members of the company include Beth Ford, the COO and Group EVP, Matt Carstens, SVP. SUSTAIN, John Ellenberger, SVP for International Development, Peter Janzen, SVP, General Counsel and CAO, Jerry Kaminski, EVP and COO, International and others.

The company follows standard recruitment procedures for recruiting people. It has provided a recruitment link in its website’s career section. Various departments are there in which the company recruits people. These include –

  • Customer service
  • Finance and Accounting
  • Human resources
  • Information technology
  • Manufacturing and operations
  • Marketing
  • Quality
  • Research and Development and
  • Sales

The company offers employment in a number of ways. Some of which are –

  • Events – Land O’Lakes holds around 150 events throughout the year to recruit especially students from different universities and schools. One such event is the ProDay, a career fair event held each year at the University of Minnesota.
  • Online application – The Company has provided online resume submission procedure for interested candidates in its official website.
  • Internships – Global Food Challenge program was a great success as half of the students completing internships in the first year, came back for a second internship as well. Through this project, students from more than eleven universities throughout the country have been offered internships at the company this year as well.
  • Advertisements – The Company also advances recruitment opportunities to aspiring candidates through ads in various job websites like Indeed, Glassdoor and Mightyrecruiter.

Land O’Lakes does not have a labor or trade union.

The use of technology by companies nowadays is a common occurrence. Every company aims to promote and expand its business through the platform provided by the internet.

Land O’Lakes moved a step further in the technological sector when it bought the satellite-imaging company, Geosys to enhance its business of farm-data. This placed the company remarkable ahead of other agro-based cooperative companies in the US.

The company has a clear and simple growth strategy – to promote innovation and involve agro enthusiasts around the world. The company follows both mergers and acquisitions strategy and organic growth. Apart from that, the company also engages in a number of campaigns and competition that keeps the consumers engaged and in return, profits the company.

In one of its goals to expand the business, Land O’Lakes merged Ceres, Inc and acquired all its stocks in the year 2016. One of its business units WinField, merged the United Suppliers creating WinField United in the same year and also got into an agreement with Southern States Cooperative Inc to further expand its business. The company also owns numerous subsidiaries as well.

Nature and Structure

The basic nature of Land O’Lakes is that of a privately held member-owned cooperative company based mainly on food and agriculture. It is not a publicly traded company. It is an agricultural cooperative owned by farmers. The company’s business is expanded in all the fifty states of America and in sixty international locations ("Land O’Lakes", 2017).

Land O’Lakes boasts of members that include both farmers and cooperatives. The member-owners elect the directors for the corporate board, which has 24 members – 12 of whom are members from the dairy section, and the remaining 12 belong to the agricultural section. The elected directors hold the position for a period of four years and are elected at the annual meeting of the company.

Stakeholders

Stakeholder can be an individual, a group or even an organization that has attention in an organization. They can influence or be influenced by the actions, policies and objectives of the company (Businessdictionary.com, 2017). Stakeholders include directors, suppliers, the community, employees and the government amongst others. The main stakeholders of Land O’Lakes include its customers and consumers, the government officials, and the regulatory agencies ("Land O'Lakes Inc. - Checking in on Land O’Lakes SUSTAIN", 2017). The farmer-members nonetheless, are the biggest stakeholders for the cooperative firm.

The premiere customers of Land O’Lakes vary from farmers to dairy workers to consumers. The company targets wide range of consumers that include Generation Xers, baby boomers and others ("Bloomberg", 2017).

Conclusion: Risks and outlook for the future

Sales, profitability and sustainability of the business

The net earnings of Land O’Lakes for the year 2016 were 320 million dollars and 13 billion as net sales. The profit margin however saw a decline of 20% although it was a far improved performance by the company. Going by the current business climate, the agricultural industry is witnessing a transformation. With an increased use of technology, the agricultural industry is expected to flourish in the coming years as well.

The company is applying new methods every year to elevate the growth. In September this year, one of its business units, WinField United opened a new incubator for agricultural innovation that is named WinField United Innovation Center (Landolakesinc.com, 2017). It is targeted towards helping the farmers improve the quality of the crops. This strategy is expected to attract more farmers involving with the company. The Dairy Accelerator Program is another such strategy employed by the company to draw farmer’s attention.

  The end of the second quarter for the year 2017 procured net sales of 3.7 billion dollars whereas the net earnings totaled 113 million dollars. This in comparison to last year’s performance is not what the company may have expected, as the total earnings at the end of the second quarter were 134 million dollars ("Land O'Lakes Inc. - Press Room", 2017).  In keeping view of the current market situation, these earnings and sales are expected to remain constant without much variation by the end of the fourth quarter in 2017.

Competitiveness

The rapid growth witnessed by the agricultural industry especially with the introduction of advanced technology during the past few decades has raised the level of competition in this sector. Newer companies are emerging with each passing year giving a tough competition to the old established firms. Land O’Lakes enjoys a strong position despite such stiff competition owing to its strategic mergers and innovations. However, it does get a stiff competition from big names like Walmart, Kraft Foods and General Mills in terms of grocery business and space in the shelves of supermarkets (Gunders, 2012).

To place the products and services of Land O’Lakes in the product life cycle, each product and service can be placed at the growth and maturity stage especially the butter. It has been the company’s biggest seller and the oldest product as well.

The future of Land O’Lakes is filled with opportunities as well as challenges. The industry it belongs to has to go through the economic cycle like every other industry. In the present day however, the agricultural and food industry is going through the peak phase of the cycle in the US. It has reached a position that was never achieved in the past (Boland, Cooper & White, 2015).

A firm like Land O’Lakes has all the opportunities to keep booming in the market and enjoy the fruits of technology that has boosted the industry like never before.

References:

Bloomberg. (2017). Bloomberg.com. Retrieved 26 October 2017, from https://www.bloomberg.com/search?query=chris+policinski

Boland, M., Cooper, B., & White, J. M. (2015). Making Sustainability Tangible: Land O'Lakes and the Dairy Supply Chain. American Journal of Agricultural Economics, 98(2), 648-657.

Businessdictionary.com. (2017). What comes after those ellipses?. BusinessDictionary.com. Retrieved 26 October 2017, from http://www.businessdictionary.com/definition/stakeholder.html

Chris policinski + land o'lakes - Bing. (2017). Bing.com. Retrieved 26 October 2017, from https://www.bing.com/search?q=chris+policinski+%2b+land+o%27lakes&qs=HS&pq=chris+policinski&sk=HS1&sc=8

Gunders, D. (2012). Wasted: How America is losing up to 40 percent of its food from farm to fork to landfill. Natural Resources Defense Council, 1-26.

Land O’Lakes. (2017). Fortune. Retrieved 26 October 2017, from http://fortune.com/fortune500/land-olakes/

Land O'Lakes Inc. - Checking in on Land O’Lakes SUSTAIN. (2017). Landolakesinc.com. Retrieved 26 October 2017, from https://www.landolakesinc.com/Members/Member-News/January-2017/Checking-in-on-Land-O-Lakes-SUSTAIN

Land O'Lakes Inc. - Press Room. (2017). Landolakesinc.com. Retrieved 26 October 2017, from https://www.landolakesinc.com/Press#fndtn-Releases

Landolakesinc.com. (2017). Retrieved 26 October 2017, from https://www.landolakesinc.com/lolinc/media/Pdf/2016-LOL-Annual_Report.pdf

Search | OPEN Forum. (2017). Americanexpress.com. Retrieved 26 October 2017, from https://www.americanexpress.com/us/small-business/openforum/s//?query=Land%20O%27Lakes

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