Benary Case Solutuion
Benary is a family-owned business and one of the leading breeding companies worldwide in this field. Ernst Benary Smenzucht was founded by Ernst Benary, the youngest of seven children and an Orphan with sixteen years in Erfurt, the European center in seed breeding in the 19th century. Ernst Benary married his wife, Bella, and this relationship provided him with moral and financial support. This way Benary soon achieved the leading position within the international seed breeding business.
In 1859, Benary introduced its first own breeding, and in 1873 famous Gregor Mendel used Benary seed to detect the generic rules of inheritance, which laid the basis for all breeding of today. There was a decline in business during the war as high export quota turned against Benary as foreign business relations were suspended abruptly. Family members and many of the skilled employees died during the war, which negatively affected the company. Despite all difficulties, the company built on its major capabilities, its breeding knowledge and introduced a range of new seeds in 1920. The only person who took the decision was Christian Borries, the manager of the company. All eighteen managers had to report to Christian Borries.
The core business of the company is the development and distribution of seed raised bedding ornamentals. They export 85% of seeds to 120 countries worldwide. Furthermore, they focus on the premium quality flower seeds for the efficient young plant production and extraordinary garden performance. The company has worldwide 85% market share. The significant limitation lies in the focus on generative seeds, leaving out the entire growing market of the vegetative reproduction.
Moreover, the company’s goal is to deliver uniform flowers and make the germination and growing process as reliable and predictable as possible. Furthermore, the company also provides additional services to the clients such as seed pelleting, which are either supplied by specialized companies or integrated players. Just like the suppliers of agriculture equipment and products, these services are important, but generally not a critical factor for the respective firms.
Benary wants to increase its sales in all relevant regions, due tio which it is stepping up its marketing activities, as well as expanding its sales force. Plants can be reproduced either through generative through vegetative breeding, where Benary is only active in the first one. Furthermore, Benary commanded about 200 different items, including F1-hybrids in 15 different genera and species. Benary, as breeder and seed producer, is at the very first stage of the value chain analysis.
The main problem with the company is that Benary was not able to show any further growth in revenues at the end of the 1990s. Furthermore, revenue growth could further ensure a profitable business development considering a high portion of fixed cost the business featured. Moreover, increasingly changing market environment turned against the firm’s stable focus on breeding without questioning what the market really demanded.
After the change in the management and governance, Matthias Redlefsen and Nick Ten Pas were concerned regarding preparing the company for the new strategic challenges. However, Benary wanted to increase its sales in all relevant regions it was expanding its marketing activities along with its sales force.
The major strength of the company is that it has strong knowledge of the breeding, and they also introduced the new range of seeds. Furthermore, they hired some specialist, who focused only on young plant production or growing and developing the seed into a finished product. The company also has good reputation in the market, mainly known for its good quality products and service, accompanied by tradition and expertise in its field of business.
Furthermore, the company has captured 85% market share worldwide and a niche player, only active in a small part of the market for the plant's seeds.
The major weakness of the company is marketing because they have not taken any steps to market their products. The sales force approach the brokers as a direct customer, and this usually results in an impact on the profitability of the company. Therefore, the question arises as to if the products are not properly marketed, then how will the customers be aware of Benary’s products. Currently, the company is considering adopting the pull marketing strategy to directly approach the young plant producers and growers. This will result in an increase in brand awareness in the upper levels of the value chain. Furthermore, the company has no experience or limited experience of trading vegetative breeding................................
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