Smithfield Case

Credentials:
- Hog/Pork/Suine

... (Pegar anotações)

Homework
How to set alternative arrangements to coordinate small/medium farmers???
The small/medium farmers could work together to gain bargain power. They have to create their own value, like they have a dense network, or speaking about structure, it could be a reciprocal network. The ideia behind this concept is that the farmers (small and medium) could create a condominium, just like here in Brazil in sugar cane, making a synergistic relationship. They can cooperate buying a high volume of inputs for the creation, in other words, together they also possess greater bargaining with suppliers as well, obtaining economies of scale. Furthermore, to maintain the combined output at a level high enough to bargain as the major producers, the relation between them should be strong and long-term as well as the negotiated contract with Smithfield. Still, the producers, because of the laws on anticorporate in Iowa, they must monitor each other to keep production in line with them. In short, working together in a manner dependent on each other is somehow important in this case, since the condo (which is different from a cooperative) professional, who can negotiate on behalf of the products so that they can 'benefits "like the big producers in relation to the input and the Smithfield area, so there is a relationship dense (strong), with long-term contracts with Smithfield, which symbolize the evolution of a weak to a reciprocal relationship, while synergistic. 1) To draw the net chain

NetChain
Sources of value – SCA (Sequential interdependence) 1) Optimize production and operations a. Logistics b. Reduce costs c. Highly Increase the efficient operation 2) Reduce transaction costs d. Level of product specificity e. Prevent information asymmetry f. Contracts are incomplete g. Reputation – Net present value 3) Capture value

Sources of value NA (Network analysis) 1) Social structure
“dense” networks
“weak” net works 2) Laerning effects 3) Network externalities

Pooled * Standard * Weak

Sequential * Optimizing resource allocation

Reciprocal * Reciprocal adjustment
Rede social dense