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Four Forms of Business

Is the Federated Co-op Structure Still Viable? Positioning for Performance October 29-30, 2001 Larry Swalheim CEO Cottage Grove Cooperative. Four Forms of Business. Four Forms of Business Continued. Cooperative Types, Structure,and Classification. Federated Cooperative. Local Co-op.

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Four Forms of Business

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  1. Is the Federated Co-op Structure Still Viable?Positioning for PerformanceOctober 29-30, 2001Larry Swalheim CEOCottage Grove Cooperative

  2. Four Forms of Business

  3. Four Forms of Business Continued

  4. Cooperative Types, Structure,and Classification Federated Cooperative Local Co-op Local Co-op Local Co-op Members Members Members Members Members Members Voting control,ownership,flow of patronage refunds Physical flow of products purchased and or marketed

  5. Cooperative Types,Structure and Classification Con’t Centralized (multiple branch locations) Local Branch Station Local Branch Station Local Branch Station Members Members Members Members Members Members Voting control,ownership,flow of patronage refunds Physical flow of products purchased and or marketed

  6. Rural Town USA 1971 • Small grocery store • Full service gas station • Mom & Pop hardware store • Small diner • Diversified family farm • 40 cow dairy

  7. Local Cooperatives 2001 – Who Moved My Cheese? • Larger customers – new set of needs • Less loyalty • Shrinking margins • Mediocre earnings • Inadequate equity revolvement • Change is the norm

  8. Cottage Grove Cooperative 1986 – 2001 • Sales History • Expense History • Earnings History

  9. Cottage Grove Cooperative Sales 1986 – 2001

  10. Cottage Grove Cooperative Expenses 1986 – 2001

  11. Cottage Grove Cooperative Earnings 1986 – 2001

  12. The Local Cooperative in the Future Federated System to be Viable Must • Manage change effectively • Shoot all dead horses • Network with other Cooperatives • Create a clearly identified mission • Plan Strategically • Increase earnings – revolve equity

  13. We MUST market our Cooperative Advantage MemberEducation Public Education Marketing

  14. The Regional Cooperative in the Future Federated System to be Viable Must • Shape their future through successful long term local cooperatives • Contain overhead costs • Build a strong balance sheet • Be part of the international marketplace • Aggressively pursue business opportunities • Embrace beneficial change

  15. The Successful Regional Cooperative Will • Make it easy for the local cooperative to do business • Develop an accounting system that is 100% accurate • Communicate effectively throughout the federated system • Develop trust

  16. The future for the federated Cooperative System is Bright if: • We remember our grass roots…the one that made it all possible – The American Farmer • Position ourselves for performance in the 21st century

  17. Member Local Cooperative Regional Cooperative Success

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