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Category: Business and Industry

Date Submitted: 11/19/2012 10:36 PM

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REV: AUGUST 6, 2009


Cargill (B)

In 1998, Cargill embarked on a 10-year strategy development process entitled “strategic intent” that was designed to chart the company’s future course, despite the massive uncertainty associated with such a long time horizon. Cargill emerged from the process with a strategic intent that explicitly focused the company on becoming the leading provider of customer solutions in food and agriculture. The process was motivated by the realization that the environment in which the company operated was fundamentally shifting, pressuring its margins and balance sheet. As Bob Lumpkins, chief financial officer, explained, “it was clear in the late 1990s that the business model of the company to be effective in trade and processing was breaking down. There was consolidation of our customers. Our offering was not very differentiated. We were up against focused competitors and our cost structure was too high.”1 Cargill’s strategic intent to become the premier provider of innovative customer solutions in food and agriculture represented radical change, although it did not mean Cargill was exiting the commodity trading business; instead, it meant it was getting rid of the commodity mindset. To execute the new strategy, Cargill undertook fundamental change. It reorganized its divisional and geographic structure, reengineered core processes, streamlined decision-making, and modified its culture and behaviors. The collective result of these moves enabled Cargill to adopt a desperately needed new focus on customers and their needs. Executing such a sweeping change in corporate strategy across Cargill’s decentralized individual business units presented a challenge described by one team member as “slightly easier than parallel parking an aircraft carrier.” Fast forwarding to October 2005, Warren Staley, chairman and CEO, and Greg Page, president and COO, had several reasons to feel pleased. As a result...