1. Globalization has increased market integration and competition through specialization and trade. This presents opportunities for developing competitive advantages but small firms must understand global market dynamics.
2. Potential opportunities include high-growth niche markets like swiftlet farming and developing higher value products through innovations like organic farming. Exploiting new technologies can also help create new industries and markets.
3. To succeed, firms should look for novel strategies like targeting non-traditional markets, applying university research, and exploiting barriers to entry to develop specialized, high-value products. They must also stay attuned to changing consumer tastes and new industries enabled by emerging technologies.
Activity 2-unit 2-update 2024. English translation
Maintaining competitiveness with Globalization in Agriculture
1. Maintaining Competitiveness with Globalization in Agriculture Mohd. Murray Hunter SME Unit, University Malaysia Perlis
2. The World has become a somewhat integrated market over the last few decades through the phenomena known as globalization Traditional economics would explain this phenomena in terms of specialization, comparative and relative advantage Sociologists would talk in terms of the ‘cosmopolitan man’
3. Success in the global market would depend upon…… Competitive advantage grows fundamentally out of value a firm is able to create for its buyers that exceeds the firm’s costs of creating it. Value is what buyers are willing to pay, and superior value stems from… providing unique benefits that more than offset a higher price. According to Professor Michael E. Porter
4. This presents three major issues: 1. Is ‘ Globalization’ more ‘reality ’, than ‘myth’? and if so and we understand it’s dynamics 2. What are the potential opportunities? and 3. How do we exploit these potential opportunities?
8. Breakfast in the World Or Where is this? Thailand Australia Changing Tastes Make New Trends and create new markets
9. USA Asian Influence Sesame, wasabi, ginger, noodle and Asian cabbage Indian Influence Fruit, spice and toasted nuts, chutney, quince pear, roasted coriander, pistaschio,almond & walnut Blue and goat cheese Mexico Tarmarind, squash flowers, huitlacoche (corn mushroom), portobello mushroom, duck meat North America Cuisines with most potential for growth Mediterranean influence Indian influence Middle East influence Slow Food Europe Fusion style Thai, Indonesian, Vietnamese influences Contemporary cuisine Mediterranean influence Exotic combinations South America Fusion style Thai/Chinese Western/Chinese Indonesian/Thai American/Mediterranean Italian French Asia/Pacific
10.
11. Malaysia Underdeveloped Market Developing Market Developed Market Beginning to rely on imports again: Colgate, Unilever Aspect of market globalisation Market segmentation still weak; along ethnicity lines only Large customers developing bringing more market concentration Still undeveloped logistic systems Category management still in infancy Local firms exporting to the world Still many market gaps Global trends do not necessary follow Poor Innovation
23. The replacement of existing technologies is happening so fast that 40% of the Fortune 500 companies that existed in 1975 do not exist today. Griffin, A., (1997), The Drivers of NPD Success: The PDMA Report, Chicago, Product Development & Management Association Now, on average new products launched in the last five years make up 33% of most successful companies profits. Foster, R., N., (2000), ‘Managing Technological Innovation for the Next 25 Years’, Research-Technology Management , 43, 1., Jan/Feb., P. 20 . The cost of new technology is a powerful driver for firms to expand product distribution over a large number of international markets to recover investment costs quicker. New technologies are thus a push factor for the globalisation of companies due to the need to obtain greater economies of scale.
24. This has provided new opportunities for small specialised firms to develop specific technologies as we see in the information technology and biotechnology industries.
28. Market Size World market estimated at 500 Tonnes USD 735 Million Production Indonesia 250 Tonnes Thailand 100 Tonnes Vietnam 100 Tonnes Malaysia 50 Tonnes Growing at around 25% per annum
29. Significance to Thailand Economy (Agriculture Industries) Rank Industry Exports (USD) 5 years Growth (%) Last Years Growth (%) 1 Natural rubber and similar natural gums 3694645 179% 8.2% 2 Crustaceans, molluscs and aquatic invertebrates 2496774 24.1% 10.9% 3 Rice 2321682 47.1% -13.7% 4 Pearls and precious or semiprecious stone 989895 76.94% 17.59% 5 Meat and edible meat offal, prepared or preserved, n.e.s. 878513 122% 36.58% 6 Sugars, molasses and honey 798453 4.34% -8.4% 7 Edible products and preparations, n.e.s 788382 127.7% 25.6% 8 Fruit, preserved, and fruit preparations (excluding fruit juices) 656935 56.9% 10.9% 9 Paper and paperboard 571437 54% 22.77% 10 Starches, inulin and wheat gluten; glues 535797 73.41% 10.3% 11 Feeding stuff for animals (not including unmilled cereals) 498150 83% 15.1% 12 Fish, fresh (live or dead), chilled or frozen 475850 24% 12.6% 13 Fruit and nuts (not including oil nuts), fresh or dried 282298 56.9% 19.35% 14 Vegetables, roots and tubers, prepared or preserved, n.e.s. 254699 40.4% 4.76% 15 Crude vegetable materials, n.e.s. 147587 55.2% 8% 16 Raw and Refined Birds' Nest 147058 400% 25% 17 Milk and cream and milk products other than butter or cheese 143886 43.24% 4.86% 18 Fixed vegetable fats and oils, soft, crude, refined or fractionated 97060 46% -25% 19 Tobacco, unmanufactured; tobacco refuse 63220 10.71% -10.53 Sources: International Trade Centre UNCTAD/WTO
48. Comparison of the Industrial and Biological Models of Agriculture Industrial Model Community Model Energy Intensive Information Intensive Linear Process Cyclical Processes Farm as a Factory Farm as an Ecosystem Enterprise Separation Enterprise Integration Single Enterprise Many Enterprises Monoculture Diversity of Plants and Animals Low-Value Products Higher Value Products Single Use Equipment Multiple Use Equipment Passive Marketing Active Marketing
49. Look for new ways to exploit the exponential growth of organic farming around the world
53. Essential Oil Based Fungicides/Insecticides Control Timorex 0.5 % Nimgard + Kocide New Foreign Products
54. Five foliar sprays at 7-d intervals Powdery Mildew in Sage Field results Sage
55. Field Results Grapes Powdery Mildew by Timor Timor 0.5% Control grape PM- Chardonnay 2003 Control of grape DM- 2003 5 foliar sprays at 7-d intervals
56. Organic Herbicides [i] Registered Trademark of Monsanto. [ii] http://alldownherbicide.com/ Before After Perlis Test Product Reported Results* Control O Round Up Pro [i] 10 All-Down Organic [ii] Range 0.5 – 3.8
57. Halal & Toyyibaan Look at non traditional markets See Halal as only part of a whole system of production Halal Foods does not necessarily mean ‘Malay’ Foods Look at product other than foods
64. Technology What does technology do, remembering it is one of the drivers of globalization?
65. The Past Present time The Future We know the past and present Without any changes our timeline will remain relatively unaltered The effect of competitor innovation will bring product evolution This changes the parallel of the market gradually A Radical change in technology Will radically change the timeline into a new industry
66.
67. Change the way you see your business Primary Producer Consumer Marketing Company Manufacturer Processor Trader
73. New technologies can produce new markets and industries (not just develop but apply)
74. Technology and changing tastes creates new markets Changing Technology (slow to Change) Changing Lifestyles Cheap Clothes Available (substitute) Had to Reinvent the Company due to Slow Product Development
75. Emerging Processed Food Flavour Trends Exotic Infusions A spicy kick of lemongrass, curcuma, pepper, coriander, ginger, basil, cardamom, cinnamon, oregano Red Pleasures Strawberry, cranberry, pomegranate, roobos, greengage, rhubarb, plum, blood orange, cherry variants, black current, huckleberry Black Health Black tea, black vinegar, black sesame seeds, black soybeans, black rice, black sugar, malt Botanical Power Honeysuckle, lavender blossom, elderflower, hibiscus, sunflower blossom, rose Attracting Opposites Spicy/mild, sweet/sour, hot/cold, fire/ice Ethnic Revival Traditional tastes and flavours, African hibiscus, Japanese cherry blossom, or Maroccan kumquat Flavour Migration Different categories start to mingle, desert drinks, coffee, cocktails
76. Greater competition means shorter product lifecycles leading to greater innovation in the market Profits squeezed in traditional areas as they become commodities
79. The Innovation of the Eagle Idea - Food Scans Opportunities, Spots, Evaluates & Selects (resource choices) Targets Realises his catch Perfect Creativity, Strategic Thinking & Focus Thank You