STRATEGY AND PRACTICE 3
Strategyand Practice
AGT food and ingredients is aleading supplier of value-added pulses and food ingredients in theworld. The company’s growth strategy emanates from a series ofacquisitions and merger transactions in the past. According toMintzberg, the company has managed to grow due to a set of deliberatestrategies with an aim of filling its operational gaps. Besides, themanagement of the company has devised an adoption plan thatidentifies an existing problem and proposing a solution. Themanagement strategy aims at forging alliances to attain influence inthe grains business (Regina, 2007).Initially, Agtech had acquired 20years in the business of cereals. During the 20 years, the companyhad traded in green lentils and had acquired niche markets.Consequently, the management of the company saw the need to growthfurther and specialize in the grains business(AGT, n,d). Themanagement acknowledged the fact that, there is a need to increasethe production capacity of the firm to realize the dream of thecompany. Specifically, the company aspired to attain a largerprocessing capacity as well as venture into the trade of more typesof greens. The management came up with a strategy to acquire SaskcanPulse Trading that had acquired six years as the largest processor ofred lentils in the western hemisphere (Critchley, 2013).Alliance Grain Traders emergedafter Agtech Income Fund acquired Saskcan Pulse Trading and rebrandedits name. The acquisition was a perfect move since it linked arenowned grain trader to a processor of grains. The move implied thatthe new company had the markets to trade as well as the capital.Besides, the merging transaction was a plan to reduce Saskcan’sdebt of USD 14 million through a private placement. The amountgenerated from the operation helped to acquire a processing plantlocated in North Dakota. It is consequently clear that the managementof the two companies had adequately planned and assessed thepotential synergies of the merger. Besides, similar to Mintzberg,planning entails conducting a systematic research to identifysituational gaps, generating alternatives and selecting theappropriate strategy. In the transaction between Agtech and Saskcan,the latter was in search of expanding its production capacity andmarket reach. In contrast, Saskcan was in search of markets to sellits products since it already had three processing plants inSaskatchewan. The resulting merge resulted in a financially stablecompany with a cumulative five processing plants and a global reach.The new business had a potential to produce 300,000 metric tons ofgrains per annum (Market publishers, 2016).Second, the company developed theneed to supply packaged foods and ingredients. The ability to providepackaged foods would increase the geographical reach of the company,the customer base, profitability, and outreach. For example, thecompany would not only provide foods for human consumption but alsofor animal use. In the year 2009, the management of Alliance GrainTraders acquired the Arbell group to satisfy this need. The group wasa supplier of food products and services for more than fifty years. Consequently, the Arbell group added to the synergies of the companyproviding the capacity to conduct color sorting, cleaning,calibration, and splitting(AGT, n,d). Accordingto Mintzberg, the management of the company has adopted anentrepreneurial mode. The leaders are powerful and bold enough totake risky decisions to achieve their vision of the future of theorganization. Besides, the management is tactical enough since allthe merger transactions end up successful with a significant impacton the performance of the company (Kucharsky, 2012)References
AGT, (n,d). AboutAGT. AGT Food andingredient. Retrievedfrom http://www.agtfoods.com/about-agt/history.html
Critchley, B. (2013,January31). A decadeon Alliance Grain Traders has achieved a lot. FinancialPost. Retrievedon 19 May 2016from http://business.financialpost.com/news/fp-street/a-decade-on-alliance-grain-traders-has-achieved-a-lot
Kucharsky, D. (2012,February 8).Alliance GrainTraders – From seed to pulse giant.Export wise.Retrieved fromhttp://exportwise.ca/alliance-grain-traders-seed-pulse-giant/
Market publishers (2016,May 15). Fundamentalcompany report including financial, swot, competitors and industryanalysis. MarketPublishers Report.Retrieved fromhttps://marketpublishers.com/report/consumers_goods/food_beverage/alliance_grain_traders_inc_swot_analysis_bac.html
Regina, (2007,May 9). Agtech,Saskcan merge. Canada.Com.Retrieved fromhttp://www.canada.com/story.html?id=0fc18f07-4d96-4254-8833-580a12b9ee5a