Ican 2022 Corporate Strategic Management And Ethics Question 1

Abiodun Farms Limited is a company established to engage in poultry farming. Currently, it owns and runs a poultry farm located at Ota, Ogun State. With five years experience in egg production, the company currently produces 700 crates of egg per day, all of which are sold in Ota. The current demand for eggs in Ota is estimated at 2,000 crates per day. The company’s vision is to become the country’s biggest egg producer within the next ten years. As a growth strategy, Abiodun Farms Limited plans to expand production to 10,000 crates of eggs per day through the installation of more cages and pens on its premises at Ota, acquisition of more chicken and other required inputs. The focus is to serve the market for eggs in selected towns in Southwestern Nigeria all of which have an estimated daily demand of 50,000 crates of egg. Production capacity of all competitors of Abiodun Farms Limited in the market for eggs in the Southwest was estimated at 32,000 crates per day. The company hopes to take advantage of this demand gap through the establishment of distribution outlets across major cities in the region for effective marketing. Aggressive advertisement campaign to stimulate demand for its products will also be embarked upon. The establishment of a new poultry or expansion of the production capacity of an existing one has no legal requirements except for making adequate arrangement for waste management. Capital requirement is high. However, the Central Bank of Nigeria (CBN) recently approved the release of soft loans to all interested poultry farmers as part of the government’s agri-loan scheme aimed at promoting farming. Abiodun Farms Limited intends to fund 60% of its growth plan through the agri-loans scheme which the CBN has approved and is currently awaiting disbursement. For the success of the proposed growth strategy, it hopes to leverage on the following: Knowledge and experience of poultry business acquired in the company’s 5 years of operation; Size of land owned by the company where current production takes place is adequate for the proposed expansion; Strong business relationship with the biggest and most reliable suppliers of poultry inputs, such as point-of-lay chicken, cages, feeds, medicines, egg crates, etc; Growth rate of demand for eggs is currently in tandem with that of the population of the country which is estimated at 3%; The company has access to current technology in eggs production which has not changed in decades. It hopes to install automatic solid chicken waste flushers, egg pickers and sorters. There are also plans to employ 2 in-house veterinarians; The problem of kidnapping has become worrisome in the area where the company operates. Recently, it had to pay a huge ransom to kidnappers for the release of one of its kidnapped marketers. To mitigate this risk, the company plans to engage 5 local hunters to provide security for its employees in addition to those securing the farm premises currently; There is currently no public water supply to the farm location. Hence, the company provides its own water, using a huge borehole it drilled 3 years ago which has the capacity to generate adequate water to meet current and future needs. In the same vein, the company relies mostly on its generating sets for its electricity needs. This is because of the unreliable and epileptic public electricity supply; With increase in production of eggs comes an increase in solid waste generation and air pollution. Therefore, it is envisaged that the increased air pollution could attract some negative reactions from people in the Ota community. The company however has an existing waste disposal system which it hopes to expand to properly dispose all poultry waste; and Required human resources are available within the Ota community.