TYSON FOODS, INC.

Tyson Foods, Inc.

Tyson Foods, Inc.

Abstract/synopsis

Tyson Foods, Inc. is the world's biggest completetly integrated producer, processor, and marketer of poultry-based food products whose aim is to "Segment, Concentrate, and control." Tyson Foods is one of major U.S. marketers of value-added chicken, beef and pork to retail grocers, broad line foodservice distributors and national fast food and full service restaurant chains; fresh beef and pork; frozen and fully-cooked chicken, beef and pork products; case-ready beef and pork; supermarket deli chicken products. The paper produces an analysis of the issues Financial Analysis and recommendation to the company

Tyson Foods, Inc.

Introduction synopsis

Tyson Foods, Inc. is the world's largest fully integrated producer, processor, and marketer of poultry-based food products whose strategy is to "Segment, Concentrate, and dominate." The firm is vertically integrated (with seven specific levels of activity), contains numerous subsidiaries, has achieved successful acquisitions, operated in a competitive environment that is heavily regulated and scrutinized, and financially stable. At issue herein is the question of how Tyson can continue to enjoy competitive advantages over its rivals (ConAgra and Hudson Foods being principal in this category), to capitalize upon its vertical integration, and to maximize its position as the lowest-cost producer of value-added products in the market segment. (Souza, 2007, 33-67)

Explanation

Financial analysis

With the financials solutions from SAP, Tyson Foods will have the ability to process and interpret financial and business data, handle financial transactions and manage profitability, business performance and growth. It enables companywide control and integration of financial and business information essential to strategic and operational decision making and will enable Tyson Foods to track financial accounting data within an international framework of multiple companies, languages, currencies and books of accounts.

Tyson Foods (Tyson) produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The company operates a totally integrated poultry production process. It provides products and service to customers throughout the US and more than 80 countries. It is headquartered in Springdale, Arizona and employs about 104,000 people as of September 29, 2007. The company recorded revenues of $26,900 million during the fiscal year ended September 2007 (FY2007), an increase of 5.2% over FY2006. The improvement in sales was largely due to improved average sales prices and better market conditions in all segments. The operating profit of the company was $614 million during FY2007, as compared to an operating loss of $77 million in FY2006. The net profit was $268 million in FY2007, as compared to a net loss of $196 million in FY2006. (Souza, 2007, 33-67)

EFAS

With mySAP™ Supplier Relationship Management (mySAP SRM) as its global purchasing platform for sourcing and procurement, Tyson will have an in-house strategic sourcing function to capture quick, significant and sustainable cost savings without recurring expenses for managed services or systems integration. Using a common platform for sourcing and procurement will help ensure higher contract compliance and better spend visibility across all operating units within Tyson.

As part of the agreement, Tyson Foods will work with SAP in further enhancing catch ...