How can you help Shangrila? Should he or Not?
Chandan Lal Patary
Empowering Business Transformation | Author of 8 Insightful Guides | The Scrum Master Guidebook | The Product Owner Guidebook | The High Performance Team Coaching Guidebook | The Leadership Guidebook
How to Pivot Agribusiness to Launch Fishery Business?
Pivot is essentially a shift in the business strategy which is implemented for testing out a new approach associated with the startups business model after receiving specific feedback.
Pivot occurs when a company shifts its business strategy to accommodate changes in customer preferences, industry, or any other factor that impacts its financial bottom line.
It is often believed to entail drastically changing the whole company.
Shangrila Mathur has acres of agricultural land.
For the last two decades, he and his family are thriving on the lands by growing diverse crops, and he was still Ok so far until few years ago, crops started failing to yield
Due to climate change, his growth from Agri farming work is not as expected as it was a couple of years back.
He was discussing with his son who is working abroad as a Technical consultant
His son recommended Pivoting the business!!
His son shares a story of the Instagram journey
Instagram wasn’t always the Instagram that we know today. Meaning: it did not start as instagram.com, the dedicated photo-and-video-sharing social networking application.
The platform that exists today was born out of a service called Burbn, a location-based check-in app. After observing the extreme popularity of the app’s photo-sharing capabilities as compared to the popularity of its other features, Burbn’s leadership stripped the application of virtually every other aspect. They started focusing exclusively on 3 of its functions:
Photo, Comment, Like
Burbn ultimately rebranded itself and became Instagram, the big photo-and-video-sharing giant that we know and love today. Which was undoubtedly a terrific strategy - one that culminated in a valuation of over $100 billion for Instagram by 2018 (Bloomberg).
The route taken - turning Burbon into Instagram - is an example of a lean methodology concept known as startup pivot.?
Should Shangrilá Pivot his Agribusiness?
It would be a big strategic change for him.
He knows if he is not changing the strategy it is going to end the existing business.
Before Pivot, his friend asks what alternative he will divert his finances to.
He did a prototype a few years back with a certain portion of his land. He started growing shrimp on the small portion of the land.
The result and return on the investment from that prototype are promising. If he scales up all the land, what is the possibility of major success?Shangrilawas wondering...
Pivoting his Agri-farmer's business where his core expertise was for so many years?
His market and network were mostly from the Agri farmer industry
But his profit margin has become unpredictable
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His dependencies were too much on unknown
His distributing commitments are not able fulfilled so his investment repayment is getting impacted
Some other farmers in other portions of the town are doing extremely well from the Agri-farming, so distributors are buying from them, as they were able to fulfill the bulk orders. They are big with fat funds, so they were able to manage the water scarcity, insect attacks, fertilizer needs, etc, operational challenges.
He is also struggling with his labor shortage. His old-timers were not coming to the field as he was not able to give them constant work. They are mostly leaving for the city for long-term job assurance or going to rich industrial farmers.
He is not seeing any large orders in the form of expectations coming his way. There is too much effort to sell whatever he produces. It eats ways his profitability
The support system of his family also has drastically changed in the last few years. His family backup is shrinking for the kind of effort Agri-Market is expecting.
Sooner he moved into another revenue model; for him, it is better
He will get an early movers advantage from his shrimp fishing business
His prototype shows there is a market demand for shrimp export
His prototype shows banks are also ready to invest to create large-scale fishery work
He is reading a proposal where it shows other people are also thinking about converting their land into small fishery farming
He was thinking of taking one small course on fishing so that he can understand end-to-end fishery business and life cycle management
He was thinking of bringing all his loyal workers back to this business to improve the outcome
There is a new export market for shrimp and it is growing as per the report provided by the local fishery department. There is a growing market and new opportunity landscape appearing here.
The investment is not as agribusiness; uncertainty is not as agribusiness, and dependency on resources is less, and they are known( less unknown)
He heard the slogan, “Get ready to throw out the old and embrace the new”
He is seeing evidence of his agribusiness dying ( for him, by him)
He knows he needs to acquire new skills at this age for the Fishing business. He has found support systems and assistance from the local fishery office and the latest built-up ecosystem
He has to build a new business model for the fishery business; he knows he can not use the Agribusiness model here
He is confident in 5-10 years of fishery business expanding and promising
By Pivoting the agribusiness, he will divert all the reusable resources to the new fishery business ( people, process, technology, and other resources)
For Sangrila, a pivot is, “I’ve changed and redirected my strategy. I was in Agri company, and now I am in a Fishery company.”, “This is the product we’re going to sell, and now this is what we’re going to do.”