Charoen Pokphand Group

1
Charoen Pokphand Group

• Group C Angus
• Karen
• Karina
• Janet
• Simone

2
Agenda

1. Background
2. CPs strategies
3. Reasons for success
4. Influence of Asian Financial Crisis
5. Recommendations

3
Background

• Begins as animal feed business
• Based in Thailand, quickly developing Southeast
  Asia and China

4
Organization Chart
Agriculture
Real estate
Aquaculture
Wholesales retails
Seeds Fertilizers
International Trading
Manufacturing
Petrochemical
5
Strategies

• Investment
• Finance
• Operational Management
• Marketing
• Technology
• HR Management
• Business Network

6
Strategies

• Investment
• Diversification
• A) geographical (China, Japan)
• Long term investment
• E.g. Rising Populations of rising income,
  middle-class and working women

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Strategies

• Long term goal
• Not taking profit from country
• Develop local talents

8
Strategies

• Industrially
• Looking for large and growing markets
• Must be important
• Analyze internal resources and capabilities
• Pioneer of new market

9
Strategies

• Overall,

If projects developed successfully
Invest in small first
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Reason for success

• Lower the risk of individual business
• Geographic
• Explore opportunities in new market
• Industry
• Explore new business opportunities

11
Strategy

• Finance
• Keep all private
• Recently, publicized more reports to invest by
  corporate equity

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Reason for success

• Financial
• Closed financial position

13
Strategy

• Operation Management
• Vertical integration
• Backward integration
• Seeds Feeding ? Chickens
• Forward integration
• Chickens ? Food Processing retails

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Reason for success

• Vertical integration
• Control supply and demand
• Facilitate market coordination
• Provide leverage
• Create new market opportunities
• Leading market share

15
Strategy

• Marketing
• Sensitive to market needs
• Provide different kinds of chicken products
• e.g. TV-type dinners, chicken parts
• Suit the needs of convenience of customers

16
Strategy

• Technology
• Acquire best technology
• Improved to suit local needs
• World class technology (partnership)
• e.g. cooperation with Arbor Acres

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Reason for success

• Be the pioneer in technological aspect
• Acquire the special technology for the
  agricultural related industry

18
Strategy

• HR management
• Each company has own autonomy
• Flat Hierarchy
• Attract and build good people
• Promote personal development
• Not family progressive

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Reason for success

• Effective information flow
• Quick response to problem and remedy immediately
• High commitment of staff

20
Strategy

• Business network
• Good government relationship
• Partnership

21
Reason for success

• Obtain a wide range of resource from the partners

22
Asian Crisis

• Interest rate increase
• Firms become illiquid
• Diminishing markets
• Lay off people

23
Recommendations

• Mainly diversification
• Spin off losing parts
• Develop based on companys resources

24
Recommendations

• - Better coordination between departments and
  companies within group
• - Make partnership with world-wide based company
  to improve global network

25

• Q A