Business & Finance
Tyson Foods Inc. is the second largest meat production company located in America with diverse meat products in other countries such as China, Mexico, India, and Brazil. The company was established in 1929 as a family business and it has grown to become a giant in the food industry. The company has different branches such as Ball Park, Jimmy Dean, and Hillshire Farm which it operates both locally and internationally. The company has been showing constant growth through its ever increasing profits and revenues. Its growth has been attributed to its ability to align its meet products with customer interests, thus posing as a strong competitor against brands such as Pilgrim’s Pride. This paper provides a situational analysis of Tyson Foods Inc. through a SWOT, PESTLE, and financial health analysis.
Tyson remains a leader in the market of meat products in the world. It is a recognized brand all over the United States that has achieved customer loyalty through its superior and quality products. The company has a stronger presence in the international market that gives it a chance to expand even more.
Tyson has not been able to enter the online platform which is now growing faster or commercialize on the fast-expanding e-commerce scene. Even though the company has a strong market presence in the U.S, it lacks strong market presence outside the U.S.
Tyson can expand its presence in niche markets. With the growth in technology, the company can take advantage of the growing digital platforms to market its products to other countries in the world.
Tyson is facing stiff competition from new entrants in niche markets. Its competitors provide meat products at cheaper prices. Another serious threat facing Tyson is the constant outbreak of livestock diseases that lead to fluctuations in commodity prices and lack of meat supply.
Since Tyson Foods operates globally, there are differences in the law and regulations that govern their operations of a foreign company in a country. The operations of the company are affected by government restrictions on imports and exports.
Consumer behavior keeps changing including their buying preferences thus affecting Tyson Foods sales. However, the company has been able to achieve customer loyal due to its inclination on healthier and cheaper vegetarian products.
Tyson faces complications in implementing technology in its operations. Technology makes 90% of the changes that are taking place in businesses today. According to Dornberger et al., (2018), every business needs to digitalize, and the same case applies to Tyson Foods Inc. the company has to conduct research on new technologies that will help it operate effectively.
The legal framework in a certain country affects the operations of a company. There are laws and regulations that guide the market. For instance, in the U.S a company can be fined for price fixing. Tyson cannot violate any business law and it has to allow its operations to be guided by demand and supply.
Meat production in the United States is controlled by animal welfare and anti-trust issues. Tyson is required to comply with the guidelines provided by the environmental protection agency by reducing toxins, managing wastes, and preventing pollution. According to McBride (2011), Tyson has faced a lot of fines in its chicken meat business especially when it comes to environmental cleaning.
Financial Health Analysis
The financial health of Tyson is essential for its future successes since it influences the decisions of investors. Tyson experiences the fastest financial growth among all food companies. For instance, the Tyson Food Inc. (2015) case study indicates that “although Tyson does not report sales by geographic region, analysts estimated Tyson’s revenue in China was $715million in the fiscal year 2013 and projections of revenue topping $I,I billion by fiscal year 2015”. This is a clear indication that Tyson Foods has financial stability that ensures the company continues to thrive in the food industry. From the case, Tyson has more assets than liabilities which implies that is a solvent and it is in a better position to meet its long-term debts. The records indicate that Tyson’s growth in international chicken production grows consistently every year, indicating a promising future for investors.
From the financial data, Tyson experienced constant increase in revenue all through the years 2011, 2012, 2013, and 2014. The increased was experienced in all countries that the company operates including China, Brazil, India, and Mexico. However, in 2015 the overall sales in chicken and pork declined in the United States and all sales (beef, chicken, prepared food, and pork) declined internationally. Based on this data, it is likely that Tyson needs to do something before in faces a serious further decrease in sales.
Summary – Overall Analysis
As one of the leading players in the food industry, Tyson Foods Inc. has managed to remain a giant because of its ability to provide superior and quality meat products to its customers. Because of this, it has managed to attract a large client base and achieve customer loyalty. Managing to do business in top markets such as China, India, and Brazil is a win for Tyson and this has helped the company achieve financial stability. The company has more assets that liabilities meaning it is in a position to cater for all its expenditures and meet its long-term goals. However, the decline in profits indicates that something is a mess for Tyson Foods Inc. Brander (2019) associates the decline to failure in utilizing technology. The company has not managed to utilize technology and the growing e-commerce in the marketing of its products internationally. This has seen the company fail to counter competition from other giants such as Pilgrim’s Pride, Smithfield Foods Inc., and Hormel Foods Corporation. Other food companies have automated their services making it easy to carry out their operations efficiently and effectively. However, the company can easily overcome this competition because it has a huge pool of financial resources that it can use to utilize technology in revamping its operations.
Its high level of assets and solvency means that Tyson is the best food company for investors as it has a promising future. However, effective competitive strategies are required for Tyson to remain the best place to invest and a giant in its industry. The company will boost its revenue and profits even more if it is able to cut its costs of operation in all countries it operates in. Tyson’s customers keep coming back because the company keeps improving its meat products to meet customer expectations.
Brander, M. (2019). Tyson foods, inc.: a question of delivery (Doctoral dissertation).
Dornberger, R., Inglese, T., Korkut, S., & Zhong, V. J. (2018). Digitalization: Yesterday, today and tomorrow. In Business Information Systems and Technology 4.0 (pp. 1-11). Springer, Cham.
McBride, C. (2011). Oklahoma v. Tyson: Playing chicken with environmental cleanup. Ecology Law Quarterly, 38(2), 603-609.
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