6 Tips on strategic management of agricultural enterprises

A good manager creates responsibility, commitment and enthusiasm in his team members. It is what distinguishes a leader. Without losing sight of the keys to being a good agribusiness management discussed in another article, there are some important guidelines for good strategic management in agribusiness.

6 guidelines for good agribusiness strategic management

  1. Knowing the specific data on the production costs of the entire agri-food chain: In this sector we work with products whose prices are determined by the market in general. The gross margin (difference between the prices of the same product in two positions in the commercial chain) should not be confused with the net margin or profit (obtained by subtracting the direct and indirect costs associated with the commercialization process from the gross margin). The associated costs must also be taken into account: cleaning, sizing, sorting, packaging (nets, trays, bags, etc.); transportation; waste management costs; costs of packaging, containers and their management; and storage costs.
  2. The agricultural enterprise brings together a series of processes to achieve the final objective: The key is to identify each of these activities, segment them and measure them with revenues and their costs.
  3. Analyze risk perspectives: In the agricultural sector, the range of risk sources is very wide. Price and weather are at the top of the list of risks, but there are many more. It is necessary to be clear about which variables are unstable and propose a strategy to manage them. Knowing the frequency and probability of any of these variables working against us, what the incidence is and whether it happens on a certain date and how it affects the performance are key actions.
  4. Every good business must have good financial management: It is vital to control the cash inflow and outflow of the company. This will help create a predictable pattern of expenses and income, which will make it easier to plan budgets or investments in the future.
  5. The strategy must be agreed with the team so that they are more involved: According to Manuel Melgarejo, president of Corteva Agriscience for Spain and Portugal, employees must be prepared to reach their maximum potential. And also share values to work on. At this point, he is committed to giving them autonomy, “so that they can express their maximum talent”.
  6. Sharing knowledge: Encouraging internal promotion, recognition of professional development, remuneration, and its adequacy to merit and work performed are fundamental. Also invest in training that serves as an apprenticeship for those functions in which each employee can contribute the most value, adding upskilling and reskilling itineraries that promote the updating and transformation of profiles.
photo that refers to the strategic management of a company


In short, for good strategic management, the manager must know how to work in line with the business strategy and with the needs of customers and the society in which we are present.

Many of our students enter our International Master in Agribusiness Management to learn how to be great leaders of the future and take their company to the next level.

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