2014 Annual Conference: Cultivating eBusiness for Global Success
Value Chain Analysis
November 11, 2014
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Value Chain Work Session
Purpose: Lay the foundation for you to independently determine:
• The marketing potential of products/activities which depend
upon other organizations and companies
• The value-add different types of products, services and activities
your individual company or organization can provide
• Considerations in bringing an multi-org solution to market
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• Specializing in market strategies
– Across the Market Life Cycle
– Innovation strategies
– Integration strategies
• Focus on how to increase market adoption of precision ag
2014 Annual Conference: Cultivating eBusiness for Global Success
Traditional Value Chain – Michael Porter
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2014 Annual Conference: Cultivating eBusiness for Global Success
Value Chain vs. Supply Chain
Supply Chain:
• Objective: Manage the flow of parts and products from suppliers
to consumers.
• Focus is on balancing cost of materials, quality, efficiencies , and
time to market
• Key Steps
• Planning and designing a product to meet consumer demand
• Sourcing the materials or components needed to produce the goods
• Manufacturing the product
• Delivering the product to the buyer
• Accepting returns of defective products
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2014 Annual Conference: Cultivating eBusiness for Global Success
Value Chain vs. Supply Chain
Supply Chain Evolving Value Chain
Primary Focus Cost of Materials &
Efficient Delivery
Adding additional value to
the customer
Market Direction Mostly Push Mostly Pull
Cares About Status Quo New offerings to the
market
Marketing Focus Outbound Inbound & Outbound
Trade Off Priorities Costs; Time to Market Getting the right solution
Differentiation
Sales Products & Services Integrated Solutions
Innovation Costs Differentiation
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2014 Annual Conference: Cultivating eBusiness for Global Success
Example: Ag Solution Value Chain
Harvesting ShippingBulking,
Cleaning,
Grading
Trade Retail
Processing
&
Packaging
2014 Annual Conference: Cultivating eBusiness for Global Success
Why Should We Care?
Primary focus in value chains is on the benefits that accrue to
customers, the interdependent processes that generate value, and
the resulting demand and funds flows that are created.
Effective value chains generate profits.
Value Chain analysis can open up new market opportunities.
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2014 Annual Conference: Cultivating eBusiness for Global Success
The Integrated Solution Value Chain
The integrated solution value chain is made up of
separate companies, organizations and alliances
who collectively create the products and services
that generate value for the customer.
Product Service Support
Complex Systems Market Model
Soil MapsSoil
Sensors
Weather
StationsYield Maps
Pumps,
Pivots,
Controllers
Farm
Practices
& Results
DSS
Growers
Complex Systems Market Model
Soil MapsSoil
Sensors
Weather
StationsYield Maps
Pumps,
Pivots,
Controllers
Farm
Practices
& Results
DSS
Integration Platform
Legacy
EquipmentFarm Data Offsite Data
Growers
Complex Systems Market Model
Applied Solutions Architecture
Technology Architecture
Soil MapsSoil
Sensors
Weather
StationsYield Maps
Pumps,
Pivots,
Controllers
Farm
Practices
& Results
DSS
Integration Platform
Legacy
EquipmentFarm Data Offsite Data
Growers
Complex Systems Market Model
Applied Solutions Architecture
Technology Architecture
Soil MapsSoil
Sensors
Weather
StationsYield Maps
Pumps,
Pivots,
Controllers
Farm
Practices
& Results
DSS
Consulting and Integration Services
Integration Platform
Legacy
EquipmentFarm Data Offsite Data
Growers
Complex Systems Market Model
Applied Solutions Architecture
Technology Architecture
Soil MapsSoil
Sensors
Weather
StationsYield Maps
Pumps,
Pivots,
Controllers
Farm
Practices
& Results
DSS
Consulting and Integration Services
Solution Sales
Integration Platform
Legacy
EquipmentFarm Data Offsite Data
2014 Annual Conference: Cultivating eBusiness for Global Success
Steps in the Integrated Value Chain Exercise
1. Define the ideal customer experience, their needs and where you
can add value
2. Identify the core processes in your Value Chain
3. Identify the key actors and their activities in each part of the
value chain
4. Identify how products and services flow through the value chain
5. Identify where each actor can add value/extract revenue
6. Identify key constraints and potential solutions
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2014 Annual Conference: Cultivating eBusiness for Global Success
Irrigation Experience for Growers
Inspect/check
Irrigation equipment
Initiate Irrigation Plan
Harvest & Sell
Consider changes for next
season. Execute feasible
improvements during
downtime.
Evaluate &
report results
Plan my crops
and develop an
irrigation
strategy
Prepare FieldsDesign
Irrigation Plan
Make application;
Evaluate & adjust
Understand compliance
requirements
Identify irrigation footprint,
management zones &
hardware capability
Document potential
improvements to irrigation
strategy (ongoing)
2014 Annual Conference: Cultivating eBusiness for Global Success
Crop plan
Crop information
Irrigation water requirements
Ground water availability
Surface water availability
Irrigation economics
Historical irrigationrecord
Irrigation system set up and configuration
Performance specifications
Troubleshooting (limited)
Water: amount applied
Water: where & when applied
Chemicals: amount & where applied
Harvest Yield
Energy Used
Equipment location & status
Current weather conditions
Weather forecast
Irrigation schedule
Irrigation placement
Operations
Irrigation Record & Reporting
Planning
Asset Manage-
ment
Irrigation Information Needs
2014 Annual Conference: Cultivating eBusiness for Global Success
Data Collection
Data Management
Data Analysis
Content Creation
Rx Use and Reporting
Pivot
Configuration
Storage Field specific
analysis
Irrigation
Prescription
Amount
Applied
Soil Moisture Storage/Retrieval Forecasting Recommendation Where Applied
Weather Storage/Retrieval Forecasting Alerting Adjustments to
Prescriptions
Historical Storage/Retrieval Trending Reporting Best Practices
Step 2: Identify Steps in Core Value Chain
2014 Annual Conference: Cultivating eBusiness for Global Success
Develop
Market
Offering
Supply
Chain
Readiness
Market
Readiness
Dealer
Readiness
Our
Company
Limited
Partner-
ship
Value-
Add
Partners
Trainers
Consult-
ants
Ag
Exten-
sions
Mktg
& PR
Agents
Sales
Dept.
Step 3: Identify & Map Key Actors
2014 Annual Conference: Cultivating eBusiness for Global Success
Step 4: Describe how products & services flow
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Actors
Product
and/or
Services
Resources
Expertise
2014 Annual Conference: Cultivating eBusiness for Global Success
Step 5: Identify Value Add Products & Services
Individual Component
Solution Integration
Production Installation
Value
Added$2K: Data
Ware-
housing
$5K: S/W
Integration$3K: H/W
Integration
$6K: Install
Services
Starting
Value$40K $42K $47K $50K $56K
2014 Annual Conference: Cultivating eBusiness for Global Success
Constraint Action Plan
Ag Extension Agents Unaware
PR & Training: Get Agents to become Champions
Growers Perception of High Risk with Change
Testimonials, Case Studies, Develop podcasts and
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Step 6: Identify Constraints & Actions
Market
Readiness
Dealer
Readiness
Constraint Action Plan
Lack of training on integrated solutions
Develop cross-company, solution-wide training
Reward system favors individual component sale
Change the reward system so they sell higher-value solution
2014 Annual Conference: Cultivating eBusiness for Global Success
Value Chain Success Factors
• Consumer (Grower) Insights• Targeted solutions by segment
• Strategic Alignment on How You Will Compete & Succeed• Market Strategy & Value Proposition
• How you will make revenue
• Capabilities you need
• Up and down information flow
• Trust • Interdependence
• Competence
• Commitment
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2014 Annual Conference: Cultivating eBusiness for Global Success
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Thank You!
Portland, Oregon
360-904-0968