On today’s episode of Food For Mzansi TV, we chat to MC Loock, senior manager of agribusiness at Standard Bank, about how you can leverage your existing resources more effectively.
One of the most significant ways to do this is to put a diversification strategy in place for your business. But what does this mean, practically speaking? Firstly, it is important to remember that your ability to diversify is often limited by the quality and quantity of resources you have available. Secondly, growth and improvement doesn’t happen overnight; it is often incremental.
So, how do you leverage your resources?
- Never stop learning: As the owner of an agribusiness, you need to instil a culture of learning in your workplace. In the agri sector, for example, you could acquire knowledge about which animal breeds are better suited to the local conditions or those that are in high demand. Training your staff is also a key component.
- Strive for continuous improvement: Bringing innovation into your agribusiness is vital if you want to diversify. But let’s be honest, everybody’s human. Give yourself the leeway to make a few mistakes and learn from them.
- Differentiate your product: Tell your story. Consumers would like to know where and when a product was produced, by whom, and in what way. Create a unique impression in the consumer’s mind about your product that is distinct from the rest of the marketplace.
- Investigate the potential of agritourism: The wine industry is one of the best examples where they have successfully used tourism to complement their farming income.
Tune into this episode of Food For Mzansi TV, where Loock gives us a full breakdown of what you can do to leverage your resources effectively.
What role does growth play in a diversification strategy?
Expansion of your product lines or services opens up a whole range of possibilities in your diversification strategy. Even though your business’s diversification may be limited by your available resources, you could use horizontal expansion. This means setting up more production units of a similar nature to optimise your farm’s offering. This will then create the possibility of geographic diversification. Reaching economies of scale also provides the opportunity to expand along the value chain.
The answer to diversification often lies outside the farm gate
- Do some consultation work for other farmers.
- Start up a mentorship programme.
- Form partnerships with people in your area that offer different skills/services that you may lack in your business.