Sheep Genetics Review of Business Model and Development of Alternatives

Summary

This report presents the findings of a project to review the business model of Sheep Genetics and to propose a range of possible alternative models. The project involved a desktop review of documents pertaining to the establishment and ongoing operation of SG, as well as consultation with a wide range of stakeholders including staff, members of various committees, clients and non-clients, service providers, managers of similar organisations (including genetic providers in other industries) and other interested parties (such as the Sheep CRC). The current business model was analysed by reference to a generic business model template from one of the world's leading business strategy thinkers, Gary Hamel (2002).

Based on the analysis of SG and business models in comparable situations, a series of five alternative models was developed. These models were referred to the SG Advisory Committee for review and advice. Aims of MLA and AWI The charter of both MLA and AWI is to invest levies collected from the respective membership bases sheep meat and wool producers for the collective benefit of the levy payers. SG is the vehicle by which genetics research, development and extension, accumulated over many years and still being developed, is delivered to the sheep industry.

Its purpose was to maximise returns to levy payers through genetic improvement. The targeted beneficiaries of MLA and AWI investment were levy payers that is, commercial breeders, not stud breeders or service providers except insofar as individuals in these groups are also commercial producers of sheep meat or wool. Sales of stud stock incurred the normal per head transaction levy paid to MLA, but there was no levy on stud sales per se. Thus it is important to distinguish the owners of SG (the commercial producers) from the clients (the stud breeders) and to ensure the respective roles are protected by the business model.