Strategic Issues
With 60% of the world’s uncultivated arable land and seven of the top ten fastest growing economies, Africa
is a natural home for the next agricultural revolution. Zambeef’s future plan is to become one of the biggest
food producers in the West African region. Zambeef plans to operate with reduced risk and earning volatility,
increasing production and efficiency in all areas of the farm, securing the supply chain and the addition of more
wholesale and retail outlets in all countries of operation(World Bank 2013).
Irregularities of regulations across borders are a major threat to Zambeef’s market share. Food and drug
regulations in countries where they have operations are different. This may affect their market penetration as
bottlenecks, restrictions, and import laws may add another layer to their cost of operation. Ghana allows the
importation of beef, dairy and poultry products, with stringent conditions, but Nigeria does not. Even with the
modification of the Tariff Book 2008 in Nigeria, beef and poultry products have not disappeared from the Tariff
Book and the restriction continues With this regulation, animal products have to be produced locally.
With the increase in the number of ShopRite outlets in Nigeria from one in 2005 to 12, demand for Zambeef
products will soon surpass supply. Meeting the demand for beef, dairy and poultry products through local
production might be difficult to achieve in the long run. Other products that are not banned may be imported
by Zambeef. To avoid a deadweight loss of profit as a result of banned importation of animal products, capital
investment will be necessary for expansion to occur and acquisition of new facilities in Nigeria will be necessary
in the long run to address supply constraints.
With the majority of their market share in Africa, infrastructural challenges add to Zambeef’s overall production
cost. The company has the following in Nigeria: two processing plants, four self-operated butcheries, five
butcheries owned by Shoprite and a farm site to house proposed feedlots, abattoirs, cold rooms and processing
operations. The efficiency of these centers is affected by an incessant electric supply. The use of a generator
to power these facilities will only increase Zambeef’s operating cost. An unstable electric supply may affect
products stored in the refrigerators at a certain temperature, leading to change in quality and taste thereby
resulting in loss in addition to the added cost. The management has to rely mainly on the generator in the short
run for the facilities to run efficiently. The president of the Zambeef stated recently that the company may face
future challenges due to global economic volatility with minimal growth in the USA and European economies
leading to volatility in share indices and commodity prices (Zambeef Products PLC. 2011).
Apart from defending the relatively stable business in Africa through vertical integration, the company should
be positioned well in terms of brand management. The impact of the media on the company’s image cannot
be underestimated. Any negative news release about the company can affect its revenue and acceptance by
consumers leading to loss of market share and consumer trust.
Zambeef brands are well known to consumers based on the company’s marketing slogan “farm to fork” and
through their extensive distribution network of low cost protein. In 2013, a news report about one of their
products deteriorated consumer trust. This created market concerns in Ghana because market share was affected
adversely. Such isolated events may be difficult to identify in the short-run, however, Zambeef’s management
has been seriously reviewing and seeking consultations in areas of public relations and brand management by
discussing the company’s mission, goals, and plans to achieve long-term business objectives.