Cargill Company Case Study

Leading private player aided with a diversified product portfolio

With revenues of about $119.5 billion, Cargill is the largest privately-owned company in the US. The

company is one of the largest suppliers of eggs to McDonald's restaurants in the US. Besides, Cargill

is the only producer of Alberger process salt in the US.

The company's leading presence is strengthened by the fact that it offers a diversified product

portfolio. Cargill's business activities include purchasing, processing, and distributing grain and other

agricultural commodities, and the manufacture and sale of livestock feed and ingredients for processed

foods and pharmaceuticals. It also operates a large financial services arm, which manages financial

risks in the commodity markets for the company. In addition, Cargill pays attention to the

connectedness among its diverse businesses. As a result, the knowledge of one business contributes

to the resiliency of the whole. For instance, through Cargill's involvement in ocean shipping and the

trading of basic goods, the company was able to detect the early signs of economic change, for

example in China, the buildup in iron ore stocks and falloff in steel prices. The insights gathered

from many activities and places enabled Cargill's trading teams to avoid plummeting commodity prices and to keep in check the heightened counterparty exposure that comes with big price

movements.

Cargill's diversified product portfolio helps it to minimize risk and dependency on any particular

business. Furthermore, leading market position provides the company with significant competitive

advantage as well as stabilizes the company's financial growth.

Offering customized solutions and products through strong focus on R&D

Cargill has been constantly increasing its focus on research and development (R&D) activities. It

devotes significant resources and attention to product development, enhancing an existing product

and improving process efficiencies. Cargill's R&D team includes more than 1,300 research,

development, applications, technical services, and intellectual property specialists working in more

than 200 locations. Furthermore, the company has around 1,900 patents in place. With R&D centers

in Europe and North America and applications and technical services professionals in locations

across the Americas, Europe, the Middle East, Africa, and Asia, Cargill's R&D capabilities have a

strong global presence. This enables Cargill to develop differentiated and customized products and

solutions across various categories. The company collaborates with customers for developing

products to suit current market demand.

Offering customized solutions and products through strong focus on R&D establishes a significant

competitive advantage for Cargill which in turn results in positive impact on customer satisfaction

and loyalty.

Weaknesses

Increasing instances of product recalls

Cargill has been registering increasing instance of product recalls. For instance, in August 2011,

Cargill Value Added Meats Retail, a business unit of Wichita-based Cargill Meat Solutions, announced

an immediate Class I voluntary recall of approximately 36 million pounds of fresh and frozen ground

turkey products produced at the company's Springdale, Arkansas facility due to possible contamination

from Salmonella Heidelberg. In December 2011, Cargill Animal Nutrition announced a voluntary