A Local Cooperative's Financial and Strategic Analysis of the Evaluation of Potential Merger Partners

This is a two-part teaching case developed through in-person interviews which were conducted with the managers of locally owned farm supply/grain marketing cooperatives in Indiana and Colorado in the spring of 2000. The case has been written so that each part can be used individually or together and can also be used in either the undergraduate classroom or in extension programming with cooperative managers and directors. Part I focuses on how to use financial analysis in business reorganization decisions and Part II focuses on how to analyze alternative business reorganization possibilities from a strategic management perspective.Cooperatives, Mergers, Evaluation of alternative business strategies, Agribusiness,

Driving Forces and Success Factors for Mergers, Acquisitions, Joint Ventures, and Strategic Alliances among Local Cooperatives

Agribusiness,

LOCAL COOPERATIVES' EVALUATION OF BUSINESS INVESTMENT OPPORTUNITIES

Agricultural cooperatives have been restructuring, by way of mergers, acquisitions, joint-ventures, and strategic alliances, to increase efficiencies to remain competitive in a changing business environment. The research evaluating the reorganization of cooperatives has revealed that less than one-half of the restructured businesses are financially successful. There is the potential to significantly influence the future health of the cooperative business sector if, first, insights can be gained concerning the factors being considered by cooperative managers when making restructuring decisions and, second, extension education programs can be adapted to meet the greatest need. In this study we examine: (a) what methods of valuation cooperatives are using when evaluating new business opportunities, and (b) what factors influence the methods of valuation preferred by cooperatives when evaluating new business opportunities.capital budgeting methods, cooperatives, finance, restructuring, Agribusiness,

Driving Forces and Success Factors for Mergers, Acquisitions, Joint Ventures, and Strategic Alliances Among Local Cooperatives

The trend toward greater consolidation in agricultural production and in agribusiness is creating the conditions that squeeze local farm supply and grain marketing cooperatives from three directions. As farms become larger and fewer in number, each individual farmer-customer is more critical, making relationships and services offered more important than ever before. At the same time that each customer has a greater impact on the cooperative’s bottom line, the competition is also consolidating, creating a fiercer “survival of the fittest” marketplace. On the other side of the local cooperatives’ business, suppliers and grain marketing firms are also fewer and larger, limiting choice and bargaining power for local cooperatives. In response, local cooperatives are engaging in a variety in business arrangements, including strategic alliances, joint ventures, mergers, and acquisitions. This paper has two objectives. The first is to examine the driving forces that motivate local cooperatives to get involved in strategic alliances, joint ventures, mergers and acquisitions. The second is to examine the relative importance of factors in the success of these new business arrangements

Driving Forces and Success Factors for Mergers, Acquisitions, Joint Ventures, and Strategic Alliances Among Local Cooperatives

The trend toward greater consolidation in agricultural production and in agribusiness is creating the conditions that squeeze local farm supply and grain marketing cooperatives from three directions. As farms become larger and fewer in number, each individual farmer-customer is more critical, making relationships and services offered more important than ever before. At the same time that each customer has a greater impact on the cooperative’s bottom line, the competition is also consolidating, creating a fiercer “survival of the fittest” marketplace. On the other side of the local cooperatives’ business, suppliers and grain marketing firms are also fewer and larger, limiting choice and bargaining power for local cooperatives. In response, local cooperatives are engaging in a variety in business arrangements, including strategic alliances, joint ventures, mergers, and acquisitions. This paper has two objectives. The first is to examine the driving forces that motivate local cooperatives to get involved in strategic alliances, joint ventures, mergers and acquisitions. The second is to examine the relative importance of factors in the success of these new business arrangements

A Local Cooperative's Financial and Strategic Analysis of the Evaluation of Potential Merger Partners

This is a two-part teaching case developed through in-person interviews which were conducted with the managers of locally owned farm supply/grain marketing cooperatives in Indiana and Colorado in the spring of 2000. The case has been written so that each part can be used individually or together and can also be used in either the undergraduate classroom or in extension programming with cooperative managers and directors. Part I focuses on how to use financial analysis in business reorganization decisions and Part II focuses on how to analyze alternative business reorganization possibilities from a strategic management perspective

Driving Forces and Success Factors for Mergers, Acquisitions, Joint Ventures, and Strategic Alliances among Local Cooperatives

The trend toward greater consolidation in agricultural production and in agribusiness is creating the conditions that squeeze local farm supply and grain marketing cooperatives from three directions. As farms become larger and fewer in number, each individual farmer-customer is more critical, making relationships and services offered more important than ever before. At the same time that each customer has a greater impact on the cooperative’s bottom line, the competition is also consolidating, creating a fiercer “survival of the fittest” marketplace. On the other side of the local cooperatives’ business, suppliers and grain marketing firms are also fewer and larger, limiting choice and bargaining power for local cooperatives. In response, local cooperatives are engaging in a variety in business arrangements, including strategic alliances, joint ventures, mergers, and acquisitions. This paper has two objectives. The first is to examine the driving forces that motivate local cooperatives to get involved in strategic alliances, joint ventures, mergers and acquisitions. The second is to examine the relative importance of factors in the success of these new business arrangements

IMPACT OF IDENTITY PRESERVATION OF NON-GMO CROPS ON THE GRAIN MARKET SYSTEM

The impact of identity preservation (IP) for genetically modified grains (GMOs) on the grain handling system for a typical region in the Eastern Corn Belt is examined. A cost minimizing linear programming model of the transshipment system from farms to grain elevators to grain users tracks shipments and costs through the marketing system. This study compares two different grain segregation strategies: segregating grain within the elevator and designating specific elevators as IP-only facilities. As the cost per unit for grain segregation increases, the designated plant strategy becomes the most cost efficient strategy

LOCAL COOPERATIVES' EVALUATION OF BUSINESS INVESTMENT OPPORTUNITIES

Agricultural cooperatives have been restructuring, by way of mergers, acquisitions, joint-ventures, and strategic alliances, to increase efficiencies to remain competitive in a changing business environment. The research evaluating the reorganization of cooperatives has revealed that less than one-half of the restructured businesses are financially successful. There is the potential to significantly influence the future health of the cooperative business sector if, first, insights can be gained concerning the factors being considered by cooperative managers when making restructuring decisions and, second, extension education programs can be adapted to meet the greatest need. In this study we examine: (a) what methods of valuation cooperatives are using when evaluating new business opportunities, and (b) what factors influence the methods of valuation preferred by cooperatives when evaluating new business opportunities