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Case Rip Cord: Down and Dirty on the Farm

A woman calling herself Grandma Judy called in from Flahrida this week and said she didn’t understand all the acronyms here at Harvard Business School. So, just for her, the Case Rip Cord is going to spell everything out this week. In addition, most of the cases deal this week deal with agriculture, where everyone is an end consumer

Let’s start today’s agricultural journey with some basic crops, like cotton and wool. Did you catch bad puns in the film forTextiles and the Multi-Fiber Arrangement? They said threats were “looming” larger and protectionism was knocking the “starch” out of the industry.
Further down the textile supply chain lies the Inditex, S. A. case. This work comes to us from the University of Navarra, where math apparently is not as strong as trendy clothier Zara’s ultra-responsive production cycle. Footnote 1 indicates to confused readers, “1 billion = 1,000,000,000.” In Germany, four companies control 30% of the distribution, and independent retailers the other half. “The 1999 fiscal year was closed…with turnover estimated at 000 million euros and a profit of 000 million.” At least they’re controlling their costs.

Returning to commodity crops, The Great Corn Laws Debate had some “sweet” quotes. In 1843, Richard Cobden was most likely sporting a silly looking wig and the most pretentious of exaggerated British accents when he stated in the House of Commons, “Let a copy of the statutes be sent, if it were possible, to another planet, without one word of comment, and the inhabitants of that sphere would at once say, ‘These laws were passed by landlords.'” Rumors at NASA report that this experiment is actually next up on their To Do list. Cobden’s speech is countered by George Game Day, a man who should be anointed the patron saint of ESPN.

Bitter Competition: The Holland Sweetener Company versus NutraSweet: “In Roman times, grape juice was boiled down in lead pans to produce sapa, a sweet compound used for everything from a food additive to an oral contraceptive. …use of sapa unfortunately led to neurological damage or even death.” Kind of a super contraceptive, really-why kill just the sperm when you can go straight for the source?

The cases in Channels to Market turned straight to the proper handling of animal carcasses. Ito Yokado contained the surprising section heading “Tunafish,” which describes Mrs. Ichikawa’s management of the Japanese store’s fresh fish department. Exhibit 10 is entitled “Oxidation of Tuna,” and it shows why fresh tuna has only a two-hour shelf life.

The next day’s case was about a good, old-fashioned cattle feeding company from the Texas panhandle, Friona Industries, L.P. Ironically, this case featured a protagonist named Herring. The beef supply chain takes cattle from cow-calf producer, where they are born, to the feedlots, where they are “grown,” to the packers, where they are slaughtered and sold to the retailers. Along the way, “nonperforming” cattle that don’t meet standards are eliminated. Yeah, but the good performers are eliminated in the end too, aren’t they? Additionally, the case compares the feedlots to a hotel. Only they leave out the part where this hotel’s checkout is a real bitch.

Mr. Herring has this to say on the fragmentation of the beef supply chain: “Every participant in the industry depends now on taking somebody’s pants down to create profitability for themselves. So the retailer is waiting until the packer has his pants down.” By taking their suppliers’ pants down, the players are creating a little more value for themselves than just profitability, eh? This suspicion is confirmed later, “‘The cow-calf producer doesn’t know to which retailer his product goes,’ Herring opined. ‘Most don’t want to know.'” Well, of course they don’t want to know which feedlot hotel their “products” eventually check out of-a rancher is liable to form a lot of attachments when his pants are down!

Please send comments on your cases to Uncle.Jordy@mba2002.hbs.edu.

March 25, 2002
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