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Study of Innovative Business Model of Taiwan' s Swine Industry - A Case Study of N Company
economies of scale
Since the outbreak of foot-and-mouth disease in 1997, the swine industry in Taiwan has not made much progress over the past twenty years, but faced with various difficulties, like lack of industrial development, the closedown of small-scale livestock farms, an aging workforce, and the low willingness of young people to enter the industry and so forth. These problems have made Taiwan’s swine industry gradually lose its international competitiveness. In recent years, with consumers growing awareness of health, food security and environmental issues, large-scale enterprise management system has become the norm in the swine industry, whereas the small-scale livestock farms with fewer resources at hand are losing the competition. If not adjusting their thinking and realizing the necessity of change and innovation, the small-scale livestock farms would eventually die out. A case study of Company N is presented in this study, as the experience it has gained in the swine industry is worth exploring. Starting from the management of pig feed source, breeding environment optimization, pig breeding system standardization to the traceability of pig and pork products, the company adopts an integrated system from production to sale. Every single detail is well controlled and managed. In addition, it successfully achieved a vertical integration of upstream and downstream pork production chain, looking for opportunities to attract pig farmers with the same philosophy to join them for the creation of a new agricultural operation model which pursues innovation, quality, environmental protection and sustainable operation. Based on the analysis of the case company, the operation strategy of swine industry can be enhanced from the internal and the external aspects. While the internal part involves business process reengineering, like whole-process cold chain operation, traceability, R& D capability, enterprise management and promotion of brand pork, and the like, external effort goes to industry environment improvement, intelligent industrial management, professional education and training system for animal husbandry farmers, carcass rating system so as to change the thinking of enterprises and consumers. All these, in turn, will improve the social and economic status of pig farmers and solve the problems of an aging workforce and the closedown of pig breeding farms, increase the incentives for young people to enter the industry. As a result, the small-scale livestock farms are more likely to achieve economies of scale. The added value of pork increases and so does its price and pork quality to cater the market needs and yield a win-win situation in which consumers and livestock farmers both profit. And finally, it contributes to the industry’s international competitiveness in the long run.
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