June 1, 2015

Strategic Positioning: Focus vs. Flexibility

The mantra of almost all strategic planning discussions and recommendations is that a company cannot be all things to all people – – it must be focused in its choice of customers and how it will create value for those customers. In farming, the most common focused strategy is to be a low cost producer of commodity products for national or global processors where the competition is also increasingly global. In recent times, opportunities to produce differentiated products for customers that want and are willing to pay for unique product or process attributes has evolved, requiring different product/service features or new innovations that typically require incurring additional cost. It is difficult to be effective and efficient trying to implement both a low-cost focused strategy and a differentiation focused strategy in the same firm since they require different skills and capabilities as summarized in Tables 1 and 2. Most successful firms choose a singular strategy and emphasize implementation of that strategy.

Table 1. Commodity Product Strategy

Table 1. Commodity Product Strategy

Table 2. Differentiated Product Strategy

Table 2. Differentiated Product Strategy

But markets change – – customers change their expectations, competitors enter the market, the business climate becomes less robust, technological advances occur – – the focused strategy is no longer relevant to the new market realities and the firm is strategically out of position. A new strategy may be more appropriate for the new business climate. This uncertainty of the future marketplace requires the firm to be flexible so it can adapt to the new economic landscape.

The dilemma of being both focused and flexible in strategic positioning can be best managed or resolved by delineating and clarifying the responsibilities of different members of the leadership and management team. The operations managers who are responsible for implementing the chosen strategy should emphasize the activities that will result in the firm being “Best in Class” in implementing that strategy – – they must stay focused. The senior management (and Board) in contrast are primarily responsible for choosing the proper strategy and adapting that strategy to the changing business climate and market place; they are responsible to regularly scan the environment and position the business to be sufficiently flexible to adapt to changes that are likely to occur in any dynamic industry like agriculture.

So what are the features of a focused strategy – – how might it be characterized and what should the operations managers emphasize as they implement that strategy? Table 3 summarizes the critical features essential to successful implementation of the common low-cost commodity production strategy.

Table 3. Strategic Focus - "Best In Class"

Table 3. Strategic Focus – “Best In Class”

Table 4. Strategic Flexibility

Table 4. Strategic Flexibility

And what are the flexibility features that the leadership and senior management team should emphasize as they scan the environment and consider the prospect of repositioning the firm in a new strategic direction? Table 4 summarizes those features which will enable the firm to successfully adapt and reduce the risk of being strategically ​out of position when there are shifts in the business climate and marketplace.

TAGS:

TEAM LINKS:

RELATED RESOURCES

Adoption of Conservation Practices and Farm Goals

July 29, 2025

How do farm goals shape conservation decisions? This analysis draws on a nationwide survey of 400 producers to explore how priorities like profitability, risk, and sustainability impact the adoption of practices like no-till, cover crops, and crop diversification. Farmers who rank conservation as a top goal are significantly more likely to implement these practices—offering a window into what drives long-term thinking in farm management.

READ MORE

Farm Goals

July 23, 2025

One-third of recently surveyed farmers identified farm transfer as their top goal, but priorities like profit, conservation, debt reduction, and income stability also ranked high. The study reveals that most farms pursue a mix of goals, and understanding the tradeoffs between them can lead to better long-term business decisions. Take time to define your farm’s goals—and use them to shape long-term business decisions.

READ MORE

The Role of Technology in Improving Farm Profitability | Commodity Classic 2025

March 12, 2025

Each year, numerous emerging technologies claim to boost your production, reduce input usage, or streamline your farm’s operations. However, the effectiveness of these technologies varies across different farms. Purdue ag economists James Mintert, Michael Langemeier, and Chad Fiechter examined how technology affects long-term farm growth and profitability, and share insights from farm financial records and farmer surveys during their 2025 Commodity Classic Learning Center Session on March 4, 2025. Watch the recording now!

READ MORE

UPCOMING EVENTS

Purdue Flexible Lease Workshop

September 16 at 7 pm or September 23 at 9 am

The Flexible Lease virtual Workshop, presented by the Purdue Extension Land Lease Team, will include a presentation and discussion to help you decide if a flexible land lease arrangement is right for your farm.

Read More

2025 Indiana Farm Custom Rates

April 17, 2025

The rates reported in this publication were compiled from questionnaires received from farmers, farm owners, farm custom operators, and professional farm managers in Indiana during the last month of 2024 and the first three months of 2025. Respondents were asked to report custom rates they had either paid or received during the past year.

READ MORE

(Part 1) 2024 Indiana Farmland Values & Market Trends

September 11, 2024

Interested in the latest trends and insights on U.S. & Indiana farmland values? This AgCast episode shares insights from the Farm Sector Balance Sheet, USDA data collection methods, regional variations in land values, and the influences of factors such as interest rates and development pressures on farmland prices. Gain an in-depth understanding of trends, market dynamics, and future expectations for farmland values.

READ MORE

August 2024 PAER issue: Farmland Prices Increase Despite Downward Pressure

August 9, 2024

Indiana farmland prices have continued the trend of record highs in 2024, according to the latest Purdue Farmland Value and Cash Rent Survey. The average price of top-quality farmland reached $14,392 per acre, a 4.8% increase from June 2023. Average and poor-quality farmland also saw gains, with prices increasing 3.7% and 4.4% to $11,630 and $9,071 per acre, respectively.

READ MORE