Global Demand in Farming

Nowadays, global demand is doubling and living cost is increasing, so its harder for farmers to make a living and at the same time produce enough food under the high demand. The agriculture sector should find a way to increase their production and exploit their full competitive potential. Therefore, a firm will have a competitive advantage if it has an appropriate join venture or resources. According to Van Praet, the joint venture between farmers and powerful farming association like Pangea will provide a competitive advantage and it will allow farmers to make more profit and make a living with agriculture.  This competitive advantage will be permanent since those who do not join the organization will lose their land in long term because property increase which make it impossible for them to pass their business to their children in the future. Moreover, farmers have the knowledge and experience about farming (strength), but they can’t exploit potential opportunities.  On the other side, Pangea doesn’t have the farming knowledge (weakness) but they bring financial resources, managerial and logistics experience and supply contracts(strength). Both parties bring their strength together and generates profits. According to Barney’s article, the analysis of strength and weakness is the key for the understanding of competitive advantage. Therefore, a company should capitalize on their strength and exploit his resource and capabilities, such as experience, knowledge and culture.  Moreover, the joint venture is ideal if a company wants to avoid internal weakness and external threats.

In conclusion, if a firm understand the idea that his company should use their strength to exploit opportunities and making a joint venture by avoiding internal weakness and external threats, they will gain a sustained competitive advantage.