Viegelahn Farms and Investments: The Michigan Seed Potato Industry at a Crossroads—A Decision Case

Howard Viegelahn's company is a slightly larger than average seed potato producer faced with many problems. Profitability and cash flow traditionally have been good, but declining customer satisfaction with the Michigan seed potato industry is contributing to declining profits, cash flow pressures, and reduced sales. Viegelahn is one of twenty-seven seed potato producers in Michigan who have been regarded by seed buyers as "stuck in their own little world." This seed potato industry is being affected by: (a) aggressive Wisconsin seed potato producers, (b) the threat/opportunities associated with biotechnology, and (c) the perception and occasional evidence that varieties from neighboring states outyield and outperform Michigan-grown seed potatoes. Viegelahn is an innovative seed potato producer striving to differentiate his products and services in a small, tradition-bound industry. Viegelahn must decide whether to (a) continue alone as a differentiated seed producer, (b) fundamentally change his individual strategy toward a low-price focus, or (c) convince his fellow seed potato growers to cooperate in making the Michigan seed potato industry more competitive.