Food for Thought: How a Century-old Agro-giant Re-imagined its Business Strategy
By Forbes Insights
As a U.S. agri-industrial business, Archer Daniels Midland (ADM) spent more than 100 years sourcing, transporting, processing and selling crops to serve the needs of a growing world. That is, until “the strategic dynamics of our business began to change,” says Ismael Roig, ADM president for Europe, Middle East and Africa and the company’s former chief strategy officer.
“When it became evident we needed new avenues for growth, we became more systematic around analyzing trends, analyzing markets and analyzing competitive environments.”
ADM President for Europe, Middle East and Africa
Faced with mounting global competition, smaller profit margins and a more tech-savvy consumer, Roig says, “Our margins were eroding. We needed to find other ways of growing beyond geographic expansion.” But maneuvering a century-old global commodities trading giant in a new direction takes robust strategic design and execution excellence. Fortunately, a number of guiding principles enabled the company to drive change forward.
Leverage Insight On Consumer Trends And Market Fluctuations For A Competitive Edge
ADM began its transformation by monitoring the landscape for key market trends and gathering new insights from its ever-evolving business environment. “When it became evident we needed new avenues for growth, we became more systematic around analyzing trends, analyzing markets and analyzing competitive environments,” says Roig.
Among the company’s key discoveries: a growing demand for natural flavor and ingredients, peaked interest in pet nutrition, and greater worldwide protein consumption. In response to these trends, ADM began to grow through acquisition of companies with expertise in each of these areas. By tapping into these fast-growing consumer trends and acquiring the necessary expertise and infrastructure, ADM increased the diversity of its product portfolio while building a global food processing business.
In addition to looking outside for competitive insight, ADM searched inward for ways to mobilize the right resources. One approach involved shifting the responsibility for strategy execution from “a handful of people at the top” to small and nimble teams with “entrepreneurial spirit,” says Roig.
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