Perdue Farms Inc.
I) Introduction Founded by Arthur W. Perdue in 1920, Perdue Farms, Inc. has always focused on quality. To improve the quality of his stock, Arthur Perdue bought leghorn breeding stock from Texas and mixed his own chicken feed. By 1940, Arthur Perdue realized that higher profits would come from selling the chickens, not the eggs. In 1950, Arthur Perdue's son, Frank, took over leadership of the company and led the company into vertical integration. Perdue Farms controlled its own hatchery, feed formulations, and feed mill. Vertical integration continued and in 1968, Perdue Farms bought its first processing plant. The most important change occurred in the 1970s when Perdue successfully branded its chicken and…show more content… B) Threats The poultry industry is heavily regulated, especially when in comes to safety. The Occupational Safetly and Health Commission cited Perdue Farms for an unacceptable level of repetitive stress injuries at its North Carolina processing plants. These types of injuries hurt the company in every direction. Worker's compensation, citations, lawsuits, and labor lost to surgeries and medical leave can destroy profits. Environmental regulation is also heavy in this industry. Runoff, with high contents of nitrogen and phosphorus from chicken manure, was blamed for the pfiesteria outbreak in the Chesapeake Bay, creating bad publicity for the whole industry. Now, poultry companies are responsible for the costly disposal of manure. This issue will probably see more regulation in the future, and will decrease profits across the industry. Interest rates are another threat to Perdue Farms. The poultry industry is dominated by acquisitions and large expansion projects. This requires large capital investments and higher interest rates could hurt the industry. Today's customers expect quality in all products. To stay competitive, Perdue Farms will need to do more than just offer a quality product to consumers. Customer service is key to differentiating products, and Perdue Farms may lose customers if this aspect is overlooked.
IV) Industry Analysis The poultry industry is a mature
