Cargill Paper Summary

1 January 2017

In Food Industry Anshi Chen Marketing 505, Environmental Paper March 29, 2012 Paper Source Cargill: inside the quite giant that rules food business, Fortune Magazine, October 2011 Summary The article introduces Cargill, a food industry company. Cargill, headquartered in Wayzata, Minnesota, is the biggest corporation in food production and it is privately held. In 2011 fiscal year, its revenue was $119. 5 billion. If Cargill goes public, it will be No. 18 on Fortune 500. In 1865, Cargill is found by William Wallace Cargill in Conover, Iowa.

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Today it is still owned 90% by Cargills and MacMillans, the two families jointed by marriage. Currently, Greg Page is the CEO. Although Cargill is huge and its business activities impact most Americans’ daily lives through various food channels, it has not been well known for the public. As a corporation, Cargill’s typical strategy is to acquire and sell businesses. It also has a tradition of developing innovative new business. Interestingly, Cargill doesn’t do farming as a food supplier. Cargill runs business globally as 60% of its earnings are generated outside of US.

It returned to Vietnam right after President Clinton normalized US and Vietnam relationships in 1995. After several successful projects, Cargill launched public-private partnership with Chocolate giant Mars, government of Vietnam and Netherlands in 2004 to create a cocoa export industry, which had never existed in Vietnam before. In 2011, Vietnam produced 2,500 tons of cocoa and 70% of them went to Cargill. Cargill’s business goes up and down due to unpredictable events around the world. Concerning with long term prosperities, Cargill watches political policies carefully as food industry is heavily regulated and hence greatly ffected by the governments’ legislations and policies.

The Legal Environmental Influence As the largest multinational corporation in food industry, Cargill needs to adapt different legal environments, domestically and internationally. Their interests are impacted by legislations and policies in different countries and relationships between them. They took the advantage of normalized relationship between US and Vietnam in 1995 to legally run the business in Vietnam. Later on, that gave them huge opportunities on business development.

Booming cocoa export industry is a good example. Cargill maintains a “big acquisition agenda”. To acquire and sell companies world-widely, they need a lot of local authorities’ approvals. And some multinationals require more complicated legal work. The food security concern, which could evolve to policies and infringes its cross market operations, worries Cargill a lot. They don’t want to “end up with policies counterproductive to feeding everyone or a business model that doesn’t have any freedom to operate”.

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