This study proposes two ideal strategy types to be used by businesses that produce rice for feed and sell the animal products fed off of that feed. Identifying ideal types can help business operators adjust and strategically develop their business strategies.
Strategic management is critical because of the following difficulties : Since the price of rice for feed is lower than that of rice for human consumption, but higher than that of imported feed corn, both rice and livestock farmers can not find economic rationality in the feed business. As a result, almost all rice is produced for human consumption, whereas rice for feed is seldom produced. Yet growth of rice-for-feed production is believed to help address concerns such as the overproduction of rice for human consumption and Japan’s high reliance on imported animal feed. Hence, a new subsidy for rice for feed has been introduced. For the expansion of the rice-for-feed business, however, a rise in the demand for rice-fed animal products is indispensable. The operators need to add value to their products in ways that can cover their production costs as well as obtain the understanding of consumers.
Rice-for-feed businesses tend to adopt either of two strategies : one focuses on market price, the other on social values. The business strategy based on market price aims to produce food characterized as Anshin/Anzen, a broad concept meaning reliable and safe in Japanese, by feeding livestock with domestic rice. The business strategy based on social values is marketed as socially beneficial, alleviating issues such as low levels of food self-sufficiency, environmental problems and difficulties facing “local” agricultural economies in Japan, by means of producing rice for feed. Increase in demand can encourage people to reform paddy fields and reduce dependency on imported animal feed.
In this study, two cases were analyzed from three perspectives ; business concepts, product designs, and how they appeal to consumers. This paper then identifies two ideal types from the analysis. For business strategies based on market price, since the goal is to offer high-quality products to consumers who are willing to pay a higher price for “good”-quality products, products are designed to indicate high quality, and sold in a way to help consumers understand that the price is appropriate. In contrast, for business strategies based on social values, since the concept is to offer chances to address social issues, the products are designed to alleviate social problems via consumption, and sold in a way that enables consumers to understand what the issues are and how they are being addressed.
While both strategies are employed in practice, focusing on either of the two in the rice-for-feed business would enable the business operators to clarify their concepts, and choose designs and marketing tools that fit their overall strategies. Although each ideal type involves its own challenges, this study suggests that any rice-for-business should still focus on either concept.

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