Scenario planning for food chains

Updated: 2012-03-01 15:58

By Marcos Fava Neves (chinadaily.com.cn)

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Some questions dealing with food industry are: Which will be the speed of new product development (NPD)? How will consolidation look like? How will costs margins and profitability of product-lines look line? How will be the relationship with retailers and agro-industry? What are the roles of regional companies? Who are the new players diversifying to this market? Which is the growth expectation for this industry? How to solve the logistics problems to supply the emerging markets?

Some questions dealing with agro-industry are: How industry will be the structured? Will the agro-industry be concentrated? The agroindustry would operate in global scale? How would be the logistics to the clients and purchasing behavior? Who will be new players? Where they may come from? What will be the degree of own production of inputs? How will operating costs and margins look like?

Some questions for future farming activities are: How production will be structured? How will concentration happen? Will it be more professional? What will be the most competitive areas in the world? Which are the growing areas and declining areas? What will be the role of cooperatives and associations? Crops will be substituted in some areas? How plagues and diseases will affect the chain? How to expect from regulation changes? How production costs will look like?

Finally, questions dealing with input industries are: What innovations will come to market? What movements upward the supply chain will be done? How will the selling and distribution channel structure look like? The concept of offering integrated solutions for farmers will be the most suitable one? How will the situation of genetic modified organism (GMO) be?

Phase 3 would be suggested if a particular company wants to use this food chain scenario built in steps 1 and 2 to have their vision of opportunities, challenges and how to position itself towards this future scenario. I hope this method can contribute to chain participants and to individual companies and strategists for their planning activities.

The author is professor of strategic planning and food chains at the School of Economics and Business, University of Sao Paulo, Brazil (www.favaneves.org) and international speaker.

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