Question

Strategic Positioning Fowler's Farm is a 1.000-acre dalty and tobacco farm located in southern Virginia, Jack Fowler, the owner, has been farming since 1982. He Initially purchased 235 acres and has made the following purchases since then: 300 acres in 1985, 150 acres in 1988, dairy equipment and buildings worth $350,000 in 1988, and 315 acres in 1998. The cost of farmland has inflated over the years so that, although Jack has a total investment of $1850,000, the land's current market value is $2.650,000. The current net book value of his buildings and equipment is $300,000, with an estimated replacement cost of $1,250,000 Current price pressures on farm commodities have affected Fowler's Farm as well as others across the country, Jack has watched as many of his neighbors either have quit forming or have been consolidated into larger, more profitable forms. Fowler's Farm consists of three different operating segments: dairy farming, tobacco, and corn and other crops intended for livestock feed. The dairy farm consists of 198 milk producing cows that are grazed on 250 acres of farmland. The crop form consists of the remaining acreage that covers several types of terrain and has several types of soll. Some of the land is high and hilly, some of it is low and claylike, and the rest is humus rich soil, Jack determines the fertilizer mix for the type of soil and type of crop to be planted by rules of thumb based on his experience The farm equipment used consists of automated milking equipment, six tractors, two tandem-axde grain bed trucks, and numerous discs, plows, wagons, and assorted tractor and hand tools. The farm has three equipment storage barns, an equipment maintenance shed, and a 90.000 bushel grain elevatot drier. The equipment and buildings have an estimated market value of $1.500,000 Jack employs five full-time farmhands, a mechanic, and a bookkeeper and has contracted part-time accounting tax assistance with a local CPA All employees are Salariect: the farmhands and the bookkeeper make $25.000 a year, and the mechanic makes $32.000 annually. The CPA contract costs $15.000 a year, In the most recent year, the farm produced 256,000 gallons of raw milk, 23,000 bushels of tobacco, and 75,300 bushels of com. Jack sells the tobacco by contract and auction at the end of the harvest. The revenue this year was $1,345,000, providing Jack a net income after taxes of $233.500 Jack's daughter Kelly has just returned from college. She knows that the farm is a good business but believes that the use of proper operating procedures and cost management systems could increase profitability and improve efficiency, allowing her father to have more leisure time. She also knows that her father has always run the farm from his experience and rules of thumb and is wary of scientific concepts and management principles. For example, he has little understanding of the accounting procedures of the farm, has not participated in the process, and has adopted few. If any, methods to maintain control over inventories and equipment He has trusted his employees to maintain the farm appropriately without using any accounting or operating procedures over inventories or equipment preventive

Answer 1

Cost leadership because of cost pressures in the industry

Answer 2

Competitive strategy for Fowler's Farm will be " Differentiation because of unique products of Fowler's Farm" As it have three different operating segment like dairy farming, tobacco, and corn and others crops intended for livestock feed.

Differnciations because of innovation will not be correct as there is no such innovation involved. Cost leadership because of increase competition will not be correct as there is no such competition in cost factor. Cost leadership because of Cost pressure in the industry will also not be correct as in the given case there is no such cost measure with regard to specific industry.