Smithfield Foods Inc. essay

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Smithfield Foods Incorporated is the world’s largest producer of meat products. Its output value is estimated at an annual production of over 6 billion pounds of beef and pork products. Furthermore, it has a pig breeding entity with an annual production of approximately 13 million pigs. As a diversified corporation, Smithfield Foods runs its business through two operations: the meat processing and the pig production operations, each comprising of a set of chains (Smithfield Inc., 2012).

Currently, the company runs its world’s largest hog processing plant in North Carolina and a number of industrial hog farms in over ten American states. As a corporate leader in vertical integration, Smithfield is renowned for raising, slaughtering, and processing its own meat products. Final products include hams, bacon, sausages, hot dogs, luncheon meats, and deli. All these products go into the market at wholesale levels under various brand labels. They include Smithfield, Esskay, Luter’s, Jamestown, Patrick Cudahy, and Gwaltney (Smithfield Inc., 2012).

Over the coming decades, Smithfield could expand into more domestic and foreign markets with exceptional business acquisitions in the US, South America, Poland, Canada, and France. Mergers and acquisitions would allow seeing its increasing product range through concentration, avoiding corporate risks, and securing value chain dominance. Indeed, Smithfield’s dominance in meat production would allow express deliveries of cased meat products to supermarkets (Smithfield Inc., 2012).

Since Smithfield does not own pig farms, it contracts farmers who take agricultural loans allowing them to meet all farm production risks, diseases, and long-term loans. Presently, Smithfield has plans of acquiring beef and turkey production plants within the country. Diversification carries with it complete investment risks since many diversified projects can eventually be divested. Unless a company has internal skills that suit new investment undertaken to acquiring competitive advantages, uncertainty mars the new acquisition. New venture shares and formidable dissimilarities in operations require skill foundations.

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