Strategy for SMEs in the area of primary agricultural production

Helena Chladkova and Sylvie Formankova
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Helena Chladkova: Department of Management, Faculty of Business and Economics, Mendel University in Brno, Czech Republic
Sylvie Formankova: Department of Management, Faculty of Business and Economics, Mendel University in Brno, Czech Republic

Agricultural Economics, 2016, vol. 62, issue 9, 395-406

Abstract: The goal of the paper was to define recommendations of a suitable business strategy for SMEs in the area of primary agricultural production. First, the external environment was analysed to define suitable recommendations for the industry, and also to discover opportunities and threats through fitting strategic analyses, that affect the aforementioned businesses. Secondly, it was necessary to get familiar with the internal environment and functioning of specific businesses in the industry (namely those that operate in the Western region of Prostějov at the foot of the Drahanska Highlands) and to evaluate their efficiency to define their strengths and weaknesses. The paper demonstrates that there is a wide range of means that can be taken advantage of when defining fitting strategies for agricultural businesses, e.g. the Porter's Five Forces Model, the IFE and the IE Matrix, the SWOT Matrix as well as the general strategies by Ansoff. Among the most important recommendations for increasing the competitiveness of SMEs in the agricultural industry, there belong: taking advantage of all the suitable agricultural subsidies, taking advantage of accredited agricultural advisors, making sure that the legal requirements of governmental bodies are met, increasing revenues for arable farming (through a good quality seed stock, chemicals and fertilizers, the foundation of suitable storage facilities in order to postpone the sales of the grain after the harvest season), creating sales cooperatives/associations to balance the competing force of buyers, rejuvenating the workforce, solidifying the ownership structure in the businesses, entrepreneurial diversification (electrical energy production), increasing quality in animal farming.

Keywords: agricultural business; competitiveness; external and internal environment; opportunities and threats; strengths and weaknesses (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:62:y:2016:i:9:id:260-2015-agricecon

DOI: 10.17221/260/2015-AGRICECON

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