Management strategies for profitability and growth : a case study of Swedish farms

Abstract: The Swedish agricultural sector is facing challenges in order to achieve long-term profitability. The sector is also undergoing a structural change where the farm unit becomes larger. Larger farm units tend to need a higher level of strategic management. A way for them to increase the long term sustainability, viability and competiveness is to work with efficiency in the farm operation. In order to increase efficiency and growth one has to understand the stimulating factors creating growth which could be described as internal or external opportunities. The understanding of growth and efficiency is strategic management which with increasing farm size and increased external capital becomes more essential than just something helpful. A useful strategic management tool is the Balanced Scorecard (BSC) since it combines non-economic and economical areas of the farm. The BSC has been used in firms around the world and has proved useful and applicable at farm level. In this thesis, the BSC framework works as an evaluation tool for strategic management practice at farm level in the past. To determine why farms grow the thesis also look into the theory of growth by Penrose. In order to investigate if the case farm has been growing and maintained profitable, finacial data have been compered to average SCB farms. The aim of this study was to identify if there were any strategic key success factors for growing Swedish farms. The study is based on qualitative interviews and flexible research designs. Quantitative data of financial development of the farms are provided to support the growth and profit over the investigated period. This study is based on eight individual growing case farms and by combining their strategies finding common parables. The parables have been analyzed with previous reports and studies in the subjects. The results in the paper show that the case farm has maintained profitability in their growth in comparison with the reference farms. The study shows that cases farms works in a strategic management process in which strategies and objectives are set. The case farms apply goals and targets within financial, internal, customer, and learning and growth perspectives of each farms. The reason for the growth is attributable to the either the economic benefits of a large-scale or individual or social incentives.