Table of Contents
Introduction 3
Analysis of Past and Present 4
Financial Position and Performance Measures 4
Strategy 4
Arenas 4
Vehicles 5
Differentiators 5
Staging and Pacing 5
Economic Logic 6
Product/line Sales and Profit analysis 6
Marketing Mix Analysis (Promotion) 6
Functions & Organization 6
Resource 6
Capability 6
VRINE model 6
Business Competitive and Macro-Environment 7
Business competitive 7
Macro environment 7
Analytical Projection into a Changing Future 11
Analytic projection of future development 11
Future focus and objectives 11
Working harder in the existing business 11
Adding a seed business 11
Adding precision agriculture 12
Corporation operations change 12
Corporation organization adjusting 12
Financial position and performance measures 12
Option 1 13
Option 2 13
Option 3 14
Conclusion 15
Business Competitive Environment 15
Strategy 15
Function and Operation 15
Organization 16
Financial 17
Recommendation 18

Introduction

It had been a good year for Plant Nutrients Inc. (PNI) in 2008 in terms of selling and business development; which in turns providing a strong base to expect an even better year in 2009. As external consultants to PNI, our focus is on analyzing internal and external factors for existing and future business environment in order to seek the appropriate strategy for the company. In the following report, we will provide a detailed and comprehensive examination of the company and recommendation to its future direction.

With the influence of reducing general crop prices, farmers are expected to pay less and use fewer input in the coming year; therefore, performance improvement depends heavily on innovation. We will examine three plausible alternatives for PNI- working on the existing business harder, adding a seed business and adding precision agriculture service, in view of enhancing the company competitiveness and thus, increasing its profit.

In this report, our analysis is mainly based on the existing information from the year 2008, including the financial statements and sales segments; which provides the best representation of current situation of PNI.

Analysis of Past and Present
Financial Position and Performance Measures

In order to meet standards of performance, the sales volume of PNI should increase 2% each year, and the return on investment (ROI) must be at least 13%. According to the operating statement in the previous year, the total sales of PNI was $4621097, the cost of sales was $3536484 (89% of total cost), expenses fee was $440000(11% of total cost) and net profit was $184613. In 1998, the investment was $1.13million; therefore, the ROI of PNI was approximately 16.34%, which achieved their goals.

Gross profit margin was 23.47% and net profit margin was 4.00%; the drastic reduce in net profit margin when comparing to the gross profit margin may mean that the overall cost control may not as good as expected.

Utilization of the blending plant is approximately 71% and utilization of spreader is around 50%, which indicate the company can think of some method to incrase the utilization and thus enhance the operating efficiency. Pesticide facilities are fully utilized and if there is any planned expansion of the pesticide selling, the company may need to acquire more application capacity.
Strategy

Five components will be discussed in the strategy diamond, namely, arenas, vehicles, differentiators, staging and pacing, and economic logic.
Arenas
The core products that PNI sells are fertilizers and agricultural chemicals. The company sells the following three specific fertilizers:

1. Materials such as urea and ammonium nitrate,
2. Regular N-P-K (nitrogen, phosphorus, and potash) blends without micronutrients, and
3. Premium N-P-K blends with micronutrients added.

PNI also produces pesticide and provides customize application services such as soil testing.

Being located in Lancaster, Pennsylvania, PNI enjoys a good reputation in the local market, and has a stable