Competitive Intelligence and Benchmarking

Tyson Foods, Inc. and the Food Products Industry

Nikhil Walia 

Supply Chain Analytics 

Dr. Yao Zhao

Tyson Foods

- Tyson Foods, Inc. is an American multinational corporation that operates in the food industry, specifically in the production, processing, and marketing of chicken, beef, pork, and other prepared food products. 

- With a workforce comprising tens of thousands of employees involved in various aspects of food production, Tyson Foods reported substantial annual revenue, reaching billions of dollars.

- In 2022, 44 Tyson Foods Plants Receive North American Meat Institute's Environmental Recognition Awards. (according to www.tysonfoods.com)

Stock Chart for Tyson Foods, Inc. (5 year period)

Industry Analysis (Phase 1)

• Industry Trend Analysis

• Concentration and Competition Intensity

• Value Chain Analysis

Industry Trend Analysis

Conclusion

• For the Industry, I focused on the Agricultural products vs. the Packaged foods and meats. It showcases how the packaged foods and meats have a higher total revenue with around 300 million dollars while the agricultural products only has about 175 million dollars.
• Also, we notice how the agricultural products have been declining in median operating margin while the packaged foods and meats have stayed relatively stable. Even the net margin and median profit has declined for agricultural foods while packaged foods and meats has stayed stable.
• For both sub groups, the median current ration is 1.75 in 2022. Same goes for median liability asset ratio which is at about 0.6 for both.
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2. Concentration and competition intensity

Value Chain Analysis

Conclusion

• On Slide 16, we can see that the top 3 with the highest net margins in the United States are Bridgeford Foods Corporation, The Hershey Company, and General Mills, Inc. This is very interesting to me because in the previous analysis we can see how Tyson was on top for certain aspects but in this instance they only have a net margin of 0.06.

• On Slide 17, we see that the top 3 enterprises in the World are Gigante Salmon AS, Shin Tai Industry Co., Ltd, and Taiwan Enterprise Co., Ltd. As you can see from the Supply Chain Map, Gigante Salmon AS dominates the whole market. You can barely even see some of the other enterprises on there since it takes up so much space. Just to compare the top two enterprises: Gigante Salmon AS had a net margin of 36.98 while the the second enterprise (Shin Tai Industry) only had 3.10. That is a 33.88 difference which is unreal.

Phase Two

Competition Positioning Analysis

1) Profit Frontier 

2) Enterprise Ranking

3) KPI Examination 

Profit Frontier

1) Revenue vs. cost,

2) net income vs. total cost or total assets

3) liability asset ratio vs. return on assets

Enterprise Ranking 

KPI Examination

Conclusion for Phase Two

• For the profit frontier, we can see that Tyson Foods actually lost 4 million dollars when looking at the profit vs total assets model and profit vs. cost model. Also, we can see for Packaged goods, Tyson is leading in Total Revenue compared to its competitors with a total  revenue of $53.3 million. However, they have an operating margin of 0.08 while other companies like Mondelez have 0.17.

• After analyzing the enterprise ranking, Tyson Foods ranked number 3 in Total Revenue for the Food Products industry. They were behind Archer-Daniels-Midland Company ($101.6 million) and Bunge Limited ($67.6 million). However, when looking at Net Margin, Tyson ranked 22nd with a net margin of 0.06. Lastly, they were ranked number 6 for Return on Assets with 0.09.

• Lastly, the KPI Examination for Tyson Foods: They were doing really well with their Return on Assets and Return on Invested Capital. However, they had a low Sales General Admin Cost/Total Revenue ranking in the bottom 0.04 percentiles. Also, they had an average of 43 days for their Inventory to turnover. This is not good since it means they are holding more inventory for longer and are spending more money on storage and warehousing because of this 

Enterprise Diagnosis

Phase 3

Strengths and Weaknesses 

Value Driver Analysis 

Breakdown Analysis 

Conclusion for Phase Three 

• When comparing Tyson Foods to other enterprises, they did really well on for their Total Revenue. However companies like Mondelez International overshadowed them with their gross profit being significantly higher. Tyson Foods struggles to get beat this industry in terms of gross profit but were able to do better when looking at the profit before tax. To add on, Tyson Foods was equally as good as General Mill in return on Assets but struggled with their operating margin (only 0.08). General Mills (0.17 operating margin) more than doubled their operating margin. Tyson Foods also only had a financial health margin of 0.06 which was one of the lowest compared to other companies like General Mills, Kellogg Company, Mondelez International, etc.

• Looking at the Value Driver Analysis we can see that Tyson Foods, had a liability asset ration of 0.46 and return on assets of 0.09.
• Now the Breakdown Analysis, in 2019, Tyson Foods had a COGS of 88.16. It was the highest when comparing to the other companies. Also, they had the lowest net income with only 4.70. Fast forward to 2022, not much changed for Tyson Foods. They lowered their COGS to 87.49 and increased their net income to 6.10. General Mills (when comparing) more than doubled their net income with about 14.40.