Technological application in agriculture has taken a long step in order for controlled revenue and extension activities along with fast growth and development to reach the very remote agricultural areas or settlements. Farmers in local areas have been observed to be the most productive when it comes to manual operation and most of them can adapt with the use of domestic transport system like animals and baskets. In those days, technology, as strong as it was, never had a good probability to gain access into the rural and even the peri-urban areas. The little ground breaking it had in the public or urban did not also take total effect.
Today, Entrepreneurs are arising especially in agriculture, and crude understanding of marketing strategies are disturbing the air. Entrepreneurial spirit is mounting every business corner, but the wheat of Entrepreneurship has not been sequestered from the chaff of being a businessman. Business can simply means an organized system where goods and services are exchanged for one another or for money. Customers who can purchase the output of such business and investment are required in every business in order to make profit. Entrepreneurship handbook defines it as a concept of developing and managing a business venture in order to gain profit by taking several risks in the corporate world. A businessman is a person who runs the business, undertaking an unoriginal business idea. Ordinarily, an entrepreneur becomes a businessman and the terms may sound same for a layman – such person is called a Business entrepreneur.
The major difference is the leadership of the market that an entrepreneur possesses whereas a businessman is a market player. While an entrepreneur is intuitive, a businessman is calculative and a businessman can only create place in existing market while an entrepreneur creates new market. The approaches of both classes are also different: the entrepreneur is atomistic while a businessman is Holistic. The competition which an entrepreneur engages in is lower compared to the high competition of a businessman. This is because a businessman has created a space in existing market where more than three business moguls are into the same deal of product sale or production which comes with branding, rebranding, resizing and even reshaping. Lastly and which is very important is that an entrepreneur is people oriented while a businessman is profit oriented.
Agriculture has also scaled into the entrepreneurial class enormously and this, in times of extinction needs to be calculated as an important factor to end a nation’s woe. There is a relation that has helped business entrepreneurs like Aliko Dangote in solving some forms of confusion and this is called backward integration. Forward integration is the expansion to new level of supply chain moving towards the customer while backward integration formula deals with the expansion of new level of the supply chain moving in the opposite direction of the customer.
Backward integration according to cleverism is a well known competitive strategy and it is also the process in which a company purchases or internally produces segments of its supply chain. Through the control of more of its supply chain, a company or firm can bring down the costs as well as guarantee access to key materials.
Any organization which births backward integration in its deal has the ability to control its value chain in a more efficient manner. It is referred to as increased control where, when retailers take up a manufacturing business, increased control over the production segment of the distribution phase is acquired. Part of the control involves the cost: through backward integration, cost can be controlled along the distribution process. Each phase of product movement includes markups to enable the reseller to earn profit. Manufacturers would be able to do away with middle man linkage if they sell directly to end buyers.
There is a competitive advantage in business entrepreneurship which a mere businessman may not get. Do not forget that backward integration is relating with how agriculture can be taken to the next level of profitability and productivity without the involvement of a middleman. Involving a middleman is one of the factors that slow down productivity due to mismanagement, intentional inflation, embezzlement of incentive and it also negates intimate interaction between producer and consumer. Companies adopt backward integration in order to avoid competitors from invading important market or scarce resources.
With the numerous advantage of backward integration, there is tendency of higher cost of market due to lack of supplier competition leading to insufficient efficiency. High probability that flexibility will get reduced owing to previous investment upstream and downstream would also come up. Existing competencies need to be sacrificed in order to develop fresh core competencies and backward integration builds up upstream capacity to ensure that downstream has an adequate supply even when demand is heavy. Investment is increased at this junction.