Strategic plan for the Brazilian agro-industrial citrus system

Kalaki, Rafael Bordonal; Neves, Marcos Fava

doi:10.1590/0104-530X1307-15

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Articles • Gest. Prod. 24 (2) • Apr-Jun 2017 • https://doi.org/10.1590/0104-530X1307-15 copy

Strategic plan for the Brazilian agro-industrial citrus system

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract:

The orange is the most cultivated, known and studied fruit in the world. Currently the Brazilian citrus industry has about 12,000 orange producers, spread over 800,000 hectares, cultivating 165 million trees and generating in 2009 a sector GDP of US$ 6.5 billion. Despite Brazilian superiority in orange juice production, the sector is going through some concerns. The study aims to present a strategic plan proposal for the Brazilian agro-industrial citrus system. To design it, the Strategic Planning and Management of Agro-industrial Systems (SPMAS) method was used. The study is characterized as exploratory nature, being a qualitative research, and analysis of secondary and primary data were collected through semi-structured in-depth interviews. The results of the study presents a specific strategic plan for the agro-industrial citrus system, in which eight macro strategic objectives for the agro-industrial citrus system have been proposed, and thirteen projects that will assist the search for strategic objectives and to mitigate the negative effects experienced by the sector and strengthen it.

Keywords:
Strategic plan; Agro-industrial system; Citriculture

Author/Common Steps	Lambin (2000) Lambin, J. J. (2012). Market-Driven Management: Strategic and operational marketing. United Kingdom: Palgrave Macmillan.	Hooley et al. (2001) Hooley, G. J., Saunders, J. A., & Piercy, N. F. (2001). (2Estratégia de marketing e posicionamento competitivo. ed.). São Paulo: Prentice Hall.	Lyford et al. (2002) Lyford, C. P., Ricks, D. J., Peterson, H. C., & Sterns, J. A., (2002). A framework for effective industry strategic planning. Journal of Agribusiness, 20 (2), 131-146.	Pearce & Robinson (2005) Pearce, J. A., & Robinson, R. B. (2005). Strategic Management: formulation, implementation and control (9. ed.). Boston: McGraw-Hill.	Oliveira (2006) Oliveira, D. P. R. (2006). Planejamento estratégico: conceitos, metodologia e práticas (6. ed.). São Paulo: Atlas.	Neves (2008) Neves, M. F. (2008). Método para planejamento e gestão estratégica de sistemas agroindustriais (GESis). Revista de Administração da Universidade de São Paulo, 43(4), 331-343.	Silva & Batalha (2010) Silva, A. L., & Batalha, M. O. (2010). Marketing estratégico aplicado ao agronegócio. In M. O. Batalha (Ed.), Gestão Agroindustrial (3. ed., Vol. 1, pp. 113-183). São Paulo: Atlas.	Soriano et al. (2010) Soriano, R. L., Torres, M. J. M., & Rosaleñ, R. C. (2010). Methodology for sustainability strategic planning and management. Industrial Management & Data Systems, 110(2), 249-268.
1	Vision statement	Define the purpose or business mission	Initiation of the process	Mission and social responsibility	Strategic diagnosis	Introduction and understanding	Awareness	Planning project
2	External analysis	Internal analysis	Situational analysis	External environment	Business mission	Market and consumer analysis in the systems approach	Mission definition	Definition of business mission
3	Internal analysis	Sectorial analysis	Vision determination	Internal analysis	Prescriptive and quantitative tools	Analysis of the internal situation and global competitors	Definition of the general objectives	Stakeholder analysis
4	Analyses and strategic choices	Definition of central strategy	Positioning of growth	Analysis and strategy choices	Control and evaluation	Objectives for the system	Diagnostic strategy	Strategy definition
5	Definition of marketing projects	Creation of competitive positioning	Principle industry improvement goals	Long term objectives		Strategies to achieve the proposed goals	Strategic segmentation	Definition of the strategic implementation plan
6	Marketing budget	Implementation	Specific strategies	General strategies		Production, product, research and development projects	Segment objectives	Determination of indicators and goals
7	Contingency plans	Organization	Implementation and coordination of strategies	Short term objectives		Communication projects	Identification of strategic options	Validation
8		Control	Strategy Review and Reassessment	Functional tactics		Distribution and logistic projects	Action plans	Monitoring
9				Policies		Training projects in the agro-industrial system/human resources	Implementation
10				Organizational restructure		Coordination and adaptation to the institutional environment project	Control
11				Control and continuous improvement		Consolidation of strategic plans
12						Budget

Strategic Planning Method	Focus / Specificity of the method
Lambin (2000)Lambin, J. J. (2012). Market-Driven Management: Strategic and operational marketing. United Kingdom: Palgrave Macmillan.	Focus on marketing, taking into account the marketing mix elements.
Hooley et al. (2001)Hooley, G. J., Saunders, J. A., & Piercy, N. F. (2001). (2Estratégia de marketing e posicionamento competitivo. ed.). São Paulo: Prentice Hall.	Strategic planning method of marketing
Lyford et al. (2002)Lyford, C. P., Ricks, D. J., Peterson, H. C., & Sterns, J. A., (2002). A framework for effective industry strategic planning. Journal of Agribusiness, 20 (2), 131-146.	This method focuses on the strategic planning commodities industry.
Pearce & Robinson (2005)Pearce, J. A., & Robinson, R. B. (2005). Strategic Management: formulation, implementation and control (9. ed.). Boston: McGraw-Hill.	Strategic marketing planning, focused in choosing leadership strategies in cost and differentiation.
Oliveira (2006)Oliveira, D. P. R. (2006). Planejamento estratégico: conceitos, metodologia e práticas (6. ed.). São Paulo: Atlas.	The method addresses the strategic planning of a company, focusing its mission and vision.
Neves (2008)Neves, M. F. (2008). Método para planejamento e gestão estratégica de sistemas agroindustriais (GESis). Revista de Administração da Universidade de São Paulo, 43(4), 331-343.	Method of Strategic Planning and Management of Agroindustrial Systems (chain). Addresses the strategic management of an agro-industrial system in the long term.
Silva & Batalha (2010)Silva, A. L., & Batalha, M. O. (2010). Marketing estratégico aplicado ao agronegócio. In M. O. Batalha (Ed.), Gestão Agroindustrial (3. ed., Vol. 1, pp. 113-183). São Paulo: Atlas.	Generic strategic planning method, applicable to any organization.
Soriano et al. (2010)Soriano, R. L., Torres, M. J. M., & Rosaleñ, R. C. (2010). Methodology for sustainability strategic planning and management. Industrial Management & Data Systems, 110(2), 249-268.	Method helps organizations achieve sustainability targets by integrating sustainability in both planning tasks and strategic management of the organization.

Stages	What has to be done
*Phase 01 – Introductory*
1. Introduction and Understanding	▪ To verify if the system has other plans done and to study them; ▪ To verify how is the planning method of the studied system; ▪ To verify which teams will be taking part in the process; ▪ To search plans made for production systems (chains) in other countries, for benchmark; ▪ To find, in the team, a person who could be a relationship promoter with other systems (chains); ▪ Finally, it must be verified, in cases of systems (chains) with already sophisticated planning processes; how this model can help the existing model, and adapt, gradually, the system to this one.
2. Market Analysis on Chain Focus	▪ To rise threatens and opportunities from the so called uncontrollable variable (possible changes in the legal/political, economical and natural, socio-cultural and technologic environment) both in domestic as well as international market; ▪ To understand existing barriers (tariff and non-tariff) and check collective actions to reduce then; ▪ To analyze the final and intermediate (dealers) consumer’s behavior and their purchase decision process; ▪ To analyze opportunities to fit environment, fair trade, sustainability and sustainable development goals; ▪ To analyze opportunities to fit the national and international labor institutional environment; ▪ Settling of an Information System so it can be always informed and taking decisions with base and support; ▪ Description of main national and international competitors.
3. Analysis of Internal Situation and Competitors (benchmarking)	▪ To raise all the strong and weak points of the system; ▪ Mapping of contracts and existing forms of coordination; ▪ To describe the existing structures of management, with the transaction characteristics; ▪ To make, also, this analysis in relation to its main competitors; ▪ Analysis of value creation, resources and abilities of the system; ▪ Analysis of the success critical factors of the system; ▪ To select, amongst the systems (chains) (which can or not be competitor) which areas and where will be benchmark (good ideas sources).
4. Objectives fort the chain	▪ Define and quantify the key objectives in terms of production, sales, import, export, seeking sustainable growth and mitigating the weaknesses of the system.
5. Strategies to Reach proposed Goals	▪ Define the main strategies (actions) in terms of positioning, export, market segmentation and capture value that will be adopted to achieve the objectives proposed in Step 4.
*Phase 02 – Plans of Strategic Vectors: Production, Communication, Distribution Channels, Qualification and Coordination (Institutional Adequacy)*
6. Production, Products, Research and Development Decisions, and innovations	▪ To analyze the productive potentials and production capacities; ▪ Mapping and planning for production risks (sanitary and others); ▪ To analyze products and product lines, as well as complementary product lines for expansion decisions; ▪ Raise innovation opportunities in the production system, new products launching; ▪ Opportunities to settle national and international innovation networks; ▪ University partnerships and with medical area; ▪ To detail all offered and to be offered services; ▪ To take decisions related to the joint mark construction and labels for the system use; ▪ To analyze and implement the certification process for the production system; ▪ Product adequacy to the rules and institutional environment; ▪ Environment sustainability; ▪ To take packing related decisions (labels, materials, design); ▪ Calculate recurrent investments at this stage.
7. Communication Projects	▪ To identify the target public who will receive the communication(messages from the production system); ▪ To develop desired goals for this communication(product knowledge, product reminders, persuasion, among others); ▪ Try to reach unique positioning and message generated by the system; ▪ To define the communication to be used; that is ; ▪ Define an advertisement plan, public relations and advertising promotion on sales, among others. -To make film’s and international material’s benchmark already used in other production systems (chains); ▪ To reckon communications actions and possibly determine annual promotion budget involving all the network agents; ▪ To indicate how communications results will be measured so the system learns more and more what the best tools are to use and have the investments revenue.
8. Logistic and Distribution Projects (Including Exports)	▪ To analyze the product distribution channels and to search new, definite distribution objective, such as: market-share, type and number of Point-of-purchase, services to be offered, market information, product promotion and incentives; ▪ To analyze the possibilities of value capture in distribution channels; ▪ To identify possible wishes of international dealers and consumers to suit the provided services; ▪ To define the entrance way to the markets, if these will be through franchising, joint-ventures or other contractual forms, or even, vertical integration; ▪ To determine annual budget for distribution; ▪ To verify how distribution actions can be done along with other systems (chains).
9. Capacitating Decisions in the Productive Chain/ Human Resources	▪ Training in management for the production system; ▪ Manpower technician Training; in control of costs; for use of Technologies; ▪ Training in national and international sales; ▪ Transmission and access to the information from technological centers/research; ▪ Training in food production; ▪ Technical assistance improvement in properties; ▪ Others.
10. Institutional Environment Coordination and Adequacy Projects	▪ Bureaucratic reduction project in order to get credit; ▪ Basic infra-structure improvement project; ▪ Fee and incentive homogenization project; ▪ Project to increase consume in government programs; ▪ Program for isolated productive areas; ▪ Tax reduction in the production system project; ▪ Export Activity Strengthen trough export promotion agencies; ▪ Laws to incentive the use of technologies (fiscal incentive, etc); ▪ Product and product name standardization project; ▪ More transparence in legislation referring to products and processes project; ▪ System proposals for conflict solution; - Coordination proposals.
11. Consolidation of strategic plans	▪ Do the consolidation of all projects generated in steps 6 to 10 and set priorities according to the needs of the system.
12. Budget SPMAS	▪ Set the budgets of all the projects that bring costs and work out the total budget ChainPlan for agro-industrial system.

Expert	Occupation
Expert 1	Researcher important research center in citrus production in the State of São Paulo
Expert 2	Researcher and university professor in agricultural economics at the University of São Paulo and an expert on citrus
Expert 3	Association Chair of agricultural inputs link (specific of citrus)
Expert 4	Association president citrus producers and director of orange juice industry
Expert 5	Consultant and expert in economics and management in citrus
Expert 6	Farmer citrus, consultant and specialist citrus market
Expert 7	Representative of citrus industries

Opportunities	Strategic actions
▪ Increase in the consumption of soft drinks and nectars; ▪ Increasing consumption in emerging countries; ▪ Economic growth in developing countries; ▪ Increased installation Brazilian processing industries abroad; ▪ Product with healthy appeal and good nutritional characteristics;	▪ Concentration of marketing efforts aimed at recovering consumption in key markets downturn; ▪ Project development of emerging markets; ▪ Diversification of distribution channels and development effort of the major brands; ▪ Implementation of inventory replenishment policy to generate income and Consecitrus to distribute income; ▪ Diversify buyers markets; ▪ Encouraging the use of NFC in markets with greater purchasing power.
Threats
▪ High dependence on external market; ▪ Increasing launch of innovative beverages; ▪ Concentration of the retail sector and bottlers; ▪ High tariff barriers imposed by major buyers markets.

Strengths	Strategic actions
▪ Many of the groves have high productivities; ▪ Brazil is beginning to diversify export markets; ▪ Agroindustrial system has great social importance, since 87% of producers are small; ▪ Agricultural and industrial production costs are lower than other producing countries; ▪ Has control of all links in the internal market to delivery in international ports.	▪ Increase productivity in order to remain competitive in the market; ▪ Renewal of production, investment in research, strengthening of agricultural insurance, expansion of citrus into new areas with the possibility of high technology and even social inclusion; ▪ To encourage practices of collective action among producers; ▪ Strengthen class organization by the producers; ▪ Improving agronomic technical training, executive and management processes and costs of growers; ▪ Develop customized credit lines for revitalization of the citrus industry, research and development, extension activities for the dissemination of technology to producers and mechanization; ▪ Put the orange juice to the Brazilian and international consumers; ▪ Investments in infrastructure.
Weaknesses
▪ Lack of positioning in the consumer markets; ▪ Exports is concentrated in a few markets; ▪ High increase in agricultural costs, industrial and logistics; ▪ 59% of groves have suboptimal productivity to have return on invested capital; ▪ Infrastructure agricultural and industrial runoff is insufficient.

Strategic Objectives
▪ Increase the competitiveness of Brazilian citrus production
▪ Strengthen and encourage research and development of new technologies such as plant improvement, development of new molecules, new management tools, new industrial products, among others.
▪ Continuously promote the development of citrus sustainability.
▪ Search for the increased demand of the agro-industrial citrus system products and the diversification of markets and products.
▪ Increase the volume and dissemination of information and transparency for the whole agro-industrial system.
▪ Improve the distribution structure of agricultural and industrial production.
▪ Qualify and create conditions to attract human resources into citriculture.
▪ Increase the coordination of the agro-industrial system and improve the business environment.

Strategic Projects	Project Objectives	actions necessary to achieve the objectives
Competitiveness of Brazilian citrus production	Increase the competitiveness of Brazilian citrus production, mainly through productivity gains with improvements in fruit quality, reduced sanitary problems and improve and stabilize the profitability of the activity to the Brazilian citrus producer aiming for continuity in the activity.	- Improve and increase the technical assistance received by producers; - Increase the renewal rate of the orchards; - Perform benchmark program among producers seeking to achieve better cost controls and management techniques through the exchange of information between them.
Development of Research and Technology	Strengthen and encourage the development of research and diffusion of new technologies.	- Increasing funding of public funds for research on citrus; - Search partnership with private companies for investments in research and new technologies; - Strengthen research institutions as Fundecitrus, APTA, universities, and GTACC e GCONCI.
Phytosanitary improvement	Seek to improve phytosanitation in the orchards and mitigate the problems that have plagued Brazilian citriculture.	- Encourage the practice of collective action between farmers, through joint applications for plant protection; - Increase supervision of groves about health issues; - Encourage private institutions to research new pesticide molecules registered for citrus.
Sustainable Development of Agro-industrial System	Promote and permanently seek the sustainable development of the agro-industrial citrus system by stimulating sustainable practices along the entire chain.	- Creation of new certifications and regulations on conscientious and responsible production and adherence to existing ones; - Implement an impact management of natural resources and residues from the agricultural and industrial production.
Communication in the Internal Market	Encourage through communication and marketing, increased consumption of processed orange juice and orange-flavored drinks, with higher juice content in the internal market.	- Stimulate the industrialized orange juice consumption habits in the internal market; - specific communication for makers opinions as doctors, teachers, journalists, about the nutritional benefits and the importance of the development of citrus couple agro-industrial system in Brazil; - Insert the orange juice in school meals; - Creation of a new product and specific juice brand for the domestic market - The Consortium Consecitrus.
Communication in the International Market	Carry out marketing and communication efforts to increase and recover the consumption of citrus products in the main falling markets and seek to increase consumption in potential markets.	- Creating a communication fund and marketing between industries, growers, government and other agents of the agroindustrial system; - Reposition the Brazilian citrus chain products as high-quality and sustainable; - joint partnerships orange juice promotion between Brazil, bottled and international retail industries, seeking the resumption of juice;
Intelligence Center of Brazilian Citriculture (CICB)	Develop a Citriculture Permanent Intelligence Center that aims to create a centralized platform and dissemination of information of all the agro-industrial citrus system, the purpose of which is to provide a greater volume of information, transparency and intelligence gains for the system permanently, so that all agents can have the same level of information.	- Agency Creation - Brazilian Citrus Intelligence Center (CICB). - Install a surveying system of the information; - Carry out strategic reports, market analysis.
Distribution and Logistics	Promote improved logistics and distribution infrastructure and constant maintenance and conservation of distribution infrastructure.	- Articulate with the federal, state and local government, more resources for investment in infrastructure, especially in ports; - To promote the conservation and permanent maintenance of the main roads of transportation of production; - Improving port infrastructure and access to ports.
International commercialization	Seek a better international marketing environment and conditions and forms of marketing, also aiming to increase the value exported by citrus companies and diversify the products and target markets.	- Diversify juice marketing channels, also seeking to negotiate with smaller bottlers and decrease the concentration of sales of current bottlers - promote tax exemptions for exports of other citrus products, aimed at encouraging the consumption and export of these products; - Search bilateral agreements between buyers markets, aiming to provide better trading conditions.
Qualification of agents of the Agro-industrial System	Qualifying and training the various human resources working in the agro-industrial system, to promote increased system productivity and conditions to attract human resources to work in citriculture.	- Creating a training and development fund for citrus; - Search incentives to attract active agents in the chain order that they do not migrate to other sectors; - Strengthening of existing specific educational courses for the citrus industry such as the master's course offered by Fundecitrus and the creation of new courses.
Coordination of the Agro-industrial System and Business Environment	Provide a better business environment in the agro-industrial citrus system and seek a more coordinated system, with a closer relationship between links and system agents, working jointly and in a coordinated way to benefit the sector, seeking to improve commercialization conditions in the agro-industrial citrus system.	- Strengthen organizations representing classes;♣ - Find a close relationship between the class representative organizations; - Working collective actions between the links of the chain; - Encourage associations and cooperatives especially among small producers seeking higher competitive- for them; - implement the Consecitrus system ever designed, aimed at equitable distribution of results between producers and industries and the improvement of marketing conditions between the links;
Credit in Citriculture	Make more resources available to the agro-industrial citrus system thus aiming to encourage greater investment in the sector.	- Develop special lines of credit for the renewal of groves in old age and implementation of new groves with minimum grace period of four years; - Develop specific lines of credit for investments in new technologies in citrus; - Review and systematically assess credit policies for the sector.
Improvement of Tax in Citriculture	Provide tax incentives for the agro-industrial citrus system to increase its competitiveness. Thus, seeking to decrease the tax burden of the Brazilian citrus chain and coordinate improvements in tax policy.	- seek from the federal and state governments to reduce the high tax of citrus products; - Search tax incentives for drinks more orange juice content. - Review and coordinate continuous improvement in tax policies incidents in the citrus chain.

Universidade Federal de São Carlos Departamento de Engenharia de Produção , Caixa Postal 676 , 13.565-905 São Carlos SP Brazil, Tel.: +55 16 3351 8471 - São Carlos - SP - Brazil
E-mail: gp@dep.ufscar.br

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[1] Fonte: Elaborated by the authors based Lambin (2000)Lambin, J. J. (2012). Market-Driven Management: Strategic and operational marketing. United Kingdom: Palgrave Macmillan., Hooley et al. (2001)Hooley, G. J., Saunders, J. A., & Piercy, N. F. (2001). (2Estratégia de marketing e posicionamento competitivo. ed.). São Paulo: Prentice Hall. , Lyford et al. (2002)Lyford, C. P., Ricks, D. J., Peterson, H. C., & Sterns, J. A., (2002). A framework for effective industry strategic planning. Journal of Agribusiness, 20 (2), 131-146., Pearce & Robinson (2005)Pearce, J. A., & Robinson, R. B. (2005). Strategic Management: formulation, implementation and control (9. ed.). Boston: McGraw-Hill., Oliveira (2006)Oliveira, D. P. R. (2006). Planejamento estratégico: conceitos, metodologia e práticas (6. ed.). São Paulo: Atlas., Neves (2008)Neves, M. F. (2008). Método para planejamento e gestão estratégica de sistemas agroindustriais (GESis). Revista de Administração da Universidade de São Paulo, 43(4), 331-343., Silva & Batalha (2010)Silva, A. L., & Batalha, M. O. (2010). Marketing estratégico aplicado ao agronegócio. In M. O. Batalha (Ed.), Gestão Agroindustrial (3. ed., Vol. 1, pp. 113-183). São Paulo: Atlas. and Sorianoet al. (2010).