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REDEFINING AGRICULTURAL INPUT SUPPLY

REDEFINING AGRICULTURAL INPUT SUPPLY. Supply Chain Management Tools/E-commerce Presence. Online Auction. Chemicals, Fertilizer, Seed, Machine Parts, Animal Health. MARKETING PLAN for. Ram Marketing Consultants Colorado State University Megan Bruch, Alejandra Engler-Palma,

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REDEFINING AGRICULTURAL INPUT SUPPLY

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  1. REDEFINING AGRICULTURAL INPUT SUPPLY Supply Chain Management Tools/E-commerce Presence Online Auction Chemicals, Fertilizer, Seed, Machine Parts, Animal Health

  2. MARKETING PLANfor Ram Marketing Consultants Colorado State University Megan Bruch, Alejandra Engler-Palma, and Jay Parsons August 2001

  3. PROBLEM STATEMENT How do we market ? Revolutionizing Agricultural Input Supply

  4. KEY ALTERNATIVES • Focus on XSAg.com • Brokerage services • Focus on Nterline Network • Supply Chain Management tools • Focus on a fully integrated supply management system • Closely link the two platforms

  5. XSAg.com Agricultural retailers Inventory management Agricultural producers Sales of $100,000 to $500,000 Nterline Agricultural retailers, distributors, and suppliers trading highly regulated products Retail stores with greater than $3 million in annual sales MARKET IDENTIFICATION

  6. XS,Inc. Strengths Weaknesses Market Opportunities Threats SWOT ANALYSIS

  7. STRENGTHS • Strong, growing, and satisfied customer base • >60,000 registered users • 95% user satisfaction • Partnerships/Alliances

  8. Alliances • Investment: • Banking and Credit: • Media/Content: • Commodity Trade: • Product Data: Logistics: • Web Hosting: • Technical: • Privacy: Security: • International:

  9. WEAKNESSES • Lack of service to producer • Supply chain friction

  10. EXTERNALTHREATS • Significant competition • Speed of adoption

  11. OPPORTUNITIES • Large growth in online agricultural sales forecasted • By 2004, 15% of transactions online (Forrester Research) http://www.businessweek.com/2000/00_20/b3681102.htm

  12. OPPORTUNITIES • Slim farm margins • Future input technology • Supply chain management • ~ $500 million in excess crop protection inventory each year • (http://www.wpc-edi.com/insider/Articles/\/2/11-3m.htm) • SCM systems shown to reduce inventory costs 30-50% • (http://www.oracle.com/corporate/press/index.html?606088.html)

  13. DECISION Market a fully integrated supply chain management system closely linking the two platforms, XSAg.com and Nterline.

  14. PRODUCTPOSITIONING Supply Chain Management & e-commerce Chemicals, Fertilizer, Seed, Machine Parts, Animal Health Online Auction Revenue & Customer Relations Management

  15. Transaction Fees Nterline Service Storefront packages Subscription charges Maintenance fees Advertising PRICING

  16. PROMOTION • Service Alliances • Agricultural Retailers Association • Vantagepoint Network • Cross Promotion

  17. KEY PLANNING ASSUMPTIONS • 2004 • 1. Stable producer expenditures • $50 billion annually • 2. Market concentration • 75% among three competitors • 3. Online sales growth • 12% of total sales

  18. FINANCIAL ANALYSIS Transaction Fee Revenue $50 billion (market size) x 0.12 (online sales ratio) $ 6 billion (industry online sales) x 0.35 (XS,Inc. market share) $ 2.1 billion (XS,Inc. sales) x 0.02 (avg. transaction fee) $42 million (XS, Inc. revenue) x 0.3 (returns from operations) $12.6 million operating margin

  19. MONITORING AND MEASUREMENT • Transaction volumes and subscriptions • Forecast accuracy • Conduct random customer surveys

  20. Supply Chain Management & e-commerce Chemicals, Fertilizer, Seed, Machine Parts, Animal Health Online Auction Revenue & Customer Relations Management

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