Los Grobo Farmings Future? Case Solution

1. What makes Los Grobo different from most farms?

Los Grobo is an integrated agricultural company that is based on partnerships with 5000 farmers. The main idea of the company was the agricultural land being divided among the children of the owner. This had resulted in agricultural plots to become smaller and divided. Los Grobo partners with all these farmers who own large or small plots. The main area of location is that half of South America that is on the southern side. It does not only partner with them to earn profits but help these farmers with their soil and other farming expertise that result in higher productivity for these farmers. This also includes managing the planting for the farmer and aspects of sales including financial transactions. This also includes training for the farmers in such areas.

The farm also produces crops on its leased land, but a major portion of its warnings come from the partnerships that exist in South America. The company has low assets and the equipment it requires for farming purposes are leased. Therefore, the model is based on a minimum of assets with the company. The company is not just an agricultural company, but its main fundamental is its consultation services for the farmers. In the 1980s, the company was the pioneer of the method of soil assessment that brought an increase in revenues for the company. This method was termed as the no-till agricultural method. The company’s employees spend their time managing the company’s own rented cropland, and more time out at the client farmers’ properties, both helping to manage the crop production as well as training the local farmers in the Los Grobo approach.

2. What are the key advantages and challenges to Los Grobo’s business model?

There were several advantages of the business model of Los Grobo. These advantages made it a model of innovativeness and led to its success. The no-till farming system that included offering managerial services and training to the farmers was a benefit to them. The farmers were not trained in managing the crops. This led to the production being low as compared to what could have been if proper pesticides and weed elimination techniques were selected. Also, prior to the system, tillage had presented challenges for the farmers because it had led to soil erosion and compaction.

However, there were challenges to the business model as well. The main challenge was the complexity of the business model. The requirement was that the company develop a chemical mixture that would help the farmers in the elimination of weed. Also, not just the development of the mixture, but also training them to apply it at the right time precisely. Also, with the growth of the company, the operations became more complex because the company had diversified into almost all areas of farming operations. Also, the company was set in South America and moving to a different location would limit the applicability of the business model because of different ways of doing business. This was the major challenge that the company faced.