MULT90014 Business Risk Management

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Driving Forces/ Uncertainties
a. Competition from prominent firms and foreign countries- About 34 dairy farms across
Australia use advanced technologies like automatic milking, with more than 130 robots
milking and over 9000 cows producing milk over around 50 million litres per annum
(Western Australian Farmers Federation Dairy Council, 2015). Such technology has
reduced the need for human labour for milk harvesting. Similarly, dairy farms outside
Australia are also adopting technologies to attain a competitive advantage. This is one of
the fundamental driving forces which leads farms to adopt technologies and use them to
reduce the cost of human labour. This competition pressure from prominent firms and
international markets drives FreshNPure Company to adapt to technological changes. It
may be highly complex for the company to understand the extent of possible demand to
make decisions regarding investment in new technologies (Courtney, 2000). Thus, there
may be a range of futures as level three of uncertainty exists regarding the use of the
technologies to keep the firms competing for the long term due to demand uncertainty in
the industry.
b. Labour Force- The labour shortage is another driving force to adapt to current
technologies. According to Dairy Global (2022), nearly 22% of owners of dairies need
help finding the labour with the skills required to work in a dairy. It reflects the need for
more labour that drives companies like FreshNPure to use technologies lacking skilled
labour. If the dairy firm finds a talent with the required skills, the cost to hire the labour is
high, which also drives the dairy firms to adapt to technologies. Moreover, HR
management practices have different uncertain outcomes, as retaining labour is a tough
job for dairy firms. Thus, there remains uncertainty about hiring the proper human labour
and then keeping it with the business for long.
c. Supply Chain deviation- Over the past five years, supply chain divergence has
challenged dairy farms’ capacity to cooperate in Australia. There is a shrink in milk
production volume, significant competition, constrained collaboration, and constrained
ownership of farmers beyond the farm gate (Dairy Australia, 2019). This driving force
has driven the industry to respond to the external environment with a more advanced
approach by adapting to newer technologies. However, uncertainty exists due to adverse

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 business diversion of the supply chain, diminished clarity and uncertainty of market
conditions and prospects.
d. Cost-effective- Some precision technologies are cost-effective for small farmers as they
respond highly to the cost-benefit ratio. Considering this, the cost-effectiveness of the
technologies drives dairy firms to adapt to the change in technologies. Technologies for
milking, and reproductive performance, are broadly used by the competitor firms in the
dairy industry, reflecting their cost-effectiveness. In sum, they find factors attached to
return on investment, performance of technology, and total investment as the most vital
pre-purchase considerations while deciding on technology implementation (Borchers &
Bewley, 2015). However, uncertainty exists regarding the increasing costs of the
technologies that may hamper technology adaptation in the dairy industry.

Overall, all these driving forces drive the company to adapt to technological changes with
some uncertainties attached to the forces.

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 References

Borchers, M. R., & Bewley, J. M. (2015). An assessment of producer precision dairy farming
technology use, prepurchase considerations, and usefulness. Journal of Dairy Science,
98(6), 4198-4205.

Courtney, H. G., Kirkland, J., & Viguerie, P. S. (2000). Strategy under Uncertainty. McKinsey
Quarterly.

Dairy Australia. (2019). Australian Dairy: Situation Analysis: Appendix B. https://cdn-

prod.dairyaustralia.com.au/-/media/project/dairy-australia-sites/dairy-plan/files/dairy-
plan/key-documents/appendix-b-australian-dairy-situation-analysis.pdf?
rev=b4fa5a78b1b347aa9d488051596f99f6

Dairy Global (2022, November 03). Australian dairy farmers unable to find labour.
https://www.dairyglobal.net/dairy/milking/australian-dairy-farmers-unable-to-find-
labour/

Western Australian Farmers Federation Dairy Council. (2015, October 22). Australian Dairy
Industry: Response to Inquiry into Technological and service innovation in Western
Australia. Australian Dairy Farmers Ltd and Dairy Australia.
https://www.parliament.wa.gov.au/Parliament/commit.nsf/luInquiryPublicSubmissions/
EBAA34A742075EFC48257F080027E332/$file/78545386.pdf