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Week 3 Assignment - Value Chain Analysis

Rebecca Miller

ACC 560 – Cost Accounting

Dr. Jones Olajide

April 24, 2022

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Develop a value chain that depicts six to nine activities that makes Fowler's Farm

Competitive.

Farming refers to one of the several commodities enterprises, such as the one on which

Fowler's farm is located. Farm goods are difficult to discern until a grading system is

implemented, which has the additional benefit of influencing market pricing. This is a situation

in which one of the most appropriate definitions of the farm's approach would be "cost-leading."

Such an approach seems compatible with the different financial difficulties that farmers in the

United States are experiencing. It has been necessary to support Farm Aid because of declining

revenues in the agricultural industry in general. The case study demonstrates the degree to which

the Fowler farm is now under downward pricing pressure. According to Kelly's aims, effective

cost management is essential for the successful farming process illustrated. This situation is

much more vital for the success of the farming process, as depicted.

A commodity-driven approach to farming is evident on Fowler's property and many other

farms throughout the country. To a certain extent, it is impossible to distinguish between items

other than by grade, which the product's market price might influence. As a result, cost

leadership is the most accurate description of the farm's business plan. This method is also

compatible with the financial difficulties that farmers in the United States are experiencing. The

Farm Aid concerts, which Willie Nelson and others sponsored, indicate the widespread concern

over the declining profitability of agricultural enterprises. In addition, the case discusses the

pricing difficulties that the Fowler farm is experiencing. The need for good cost management is

growing in importance for successful farming, and this looks to be at the top of Kelly's priority

list.
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Evaluate the competitive advantage each activity confers upon the company.

Competitive strategy refers to the different actions that a company does to acquire new

consumers while also supplying them with what they anticipate and increasing their position in

the market. There are a variety of various competing tactics, two of which are as follows:

* Cost Leadership strategy

* A cost-cutting tactic

The cost leadership approach is suitable in this circumstance when small enterprises are

putting it into action. To achieve the goal of providing items and services at cheaper rates over

the long term, this approach requires lengthy commitments. Small businesses must manufacture
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products and services at a cheap cost to minimize losses in the profit margin. Some aspects of the

cost focus approach are similar to those of the cost leadership strategy; however, the cost focus

strategy is focused on a specific section of the market and offers the market low prices rather

than providing the market with a broad range of low prices.

A competitive advantage is enjoyed by Fowler's farm, as shown in the table below:

 Having a tractor, plows, and wagons on the farm makes it more efficient for material

transport. It may also be used to draw agricultural equipment for planting, cultivating,

fertilizing, harvesting, and plowing crops and sketch tractors and other vehicles.

 In conjunction with a mechanic, an equipment maintenance shed helps reduce downtime,

but it also helps prevent severe problems.

 Automated milking equipment improves the milking frequency, resulting in reduced

stress on the cow's udder and more comfort for the cattle in general.

 The use of a large number of discs increases the homogeneity of the surface and the

granulation of the soil.

Justify which activity you believe is the most valuable for company growth.

Its most valuable activity, farming, is the most valuable activity for this firm. This is

demonstrated by the substantial investment in farm equipment, including six tractors, six tandem

axle grain bed trucks, numerous discs and plows, assorted tractor and hand tools, three

equipment storage barns, and a 90,000-bushel grain elevator/drier, which justifies the entire

expenditure.

This document describes the material flow to investigate the efficiency and effectiveness

that the chain generates in the delivery of items in the needed volume, quality, and kind to suit
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the customer's demands. Suppose the end product or service is valuable. In that case, the value

addition reflects a variety of actions that add value to the customer by guaranteeing that the final

product or service is valued. The activities that are required but do not add value to the product

are "necessary but non-value-adding." These operations do not add value to the product but are

essential within the current supply chain procedures. These factors may include excessive or

inferior inputs, a lack of necessary abilities, and insufficient processing.

Justify your choice of the activity that you believe would benefit most from

optimization or alteration.

From what I have read about farming, Jack uses rules of thumb to identify the best

fertilizer mix for the kind of soil and crop to be planted based on his previous experience.

Because of the extensive and highly fertile soil, which requires less input, farming will benefit

the most from optimization when it makes use of modern technology in terms of input supply,

production, handling, development, post-harvest handling, and dissemination of plant genetic

material, among other aspects of his operation.

Recommend a change that you would make to your selected activity to optimize it

and support your assertion quantitatively. Ensure that you mention any assumptions or

data values that must be used to support your suggestion in your proposal.

Based on Jack's assumption that the farm is ¾ fertile, I recommend that he adopt Plant

breeding and genetics, modifying a plant's properties to produce desirable attributes for human

use. A drone sprayer is developed to spray fungicides and insecticides with pinpoint accuracy.

Implement an inventory management system that both Jack and Kelly will be responsible for

monitoring. This will keep track of the raw ingredients and finished goods currently in stock.