I think the bigger story here is whether or not Costco's chicken will improve with respect to the other players in the market.
Consider that the 'big players' have all extracted the costs they felt they could, with the choices they made, and that is the 'standard' product most people are offered. Now we get CostCo which is making different choices and perhaps getting a different result (size, flavor, what have you). In the event that CostCo chicken becomes the market leader and perhaps people are even incentivized to join CostCo in order to have access to their chicken supply, CostCo would likely open a second and third farm so that all of their chicken needs could be met. And what would that do to the profitability of the others?
To my reading, the article implies that these large farms conspire in their offering, otherwise CostCo could just move their business to the one that was willing to meet there terms. Sort of like McDonald's and their beating potato farmers over the head with demands for the specific variety and size pototato they needed for their fries. (which they could do because their purchases were a significant chunk of the market[1])
So without cooperation from the chicken cartel, or perhaps for other unmentioned reasons, CostCo decides to become an agricultural company too.
I'm really wondering if there is some way to disrupt these large agricultural interests effectively. Imagine the Uber for Chicken Farming where an app connects people with extra chicken into a chicken acquisition and slaughtering pipeline for resale.
Forgive my tangent, but do you have any idea why you like to write it as "CostCo"?
I notice it's a common practice on news.y to find (or invent) sub-words in names and capitalize them. Like I remember everyone writing "GroupOn" for the portmanteau of "group coupon"
It's puzzling to me and I want to understand where you're coming from!
I assume that's instinctive camelCase[1] and/or exposure to a very large number of software packages and startups that do go for the ransom note look in their branding.
While I like the other responses better, at one time it was part of their branding. From a phonological standpoint, it was perhaps an effort to guide the pronunciation of the name as "Cost Cō". I tend to type it that way because I hear it that way.
Consider that the 'big players' have all extracted the costs they felt they could, with the choices they made, and that is the 'standard' product most people are offered. Now we get CostCo which is making different choices and perhaps getting a different result (size, flavor, what have you). In the event that CostCo chicken becomes the market leader and perhaps people are even incentivized to join CostCo in order to have access to their chicken supply, CostCo would likely open a second and third farm so that all of their chicken needs could be met. And what would that do to the profitability of the others?
To my reading, the article implies that these large farms conspire in their offering, otherwise CostCo could just move their business to the one that was willing to meet there terms. Sort of like McDonald's and their beating potato farmers over the head with demands for the specific variety and size pototato they needed for their fries. (which they could do because their purchases were a significant chunk of the market[1])
So without cooperation from the chicken cartel, or perhaps for other unmentioned reasons, CostCo decides to become an agricultural company too.
I'm really wondering if there is some way to disrupt these large agricultural interests effectively. Imagine the Uber for Chicken Farming where an app connects people with extra chicken into a chicken acquisition and slaughtering pipeline for resale.
[1] http://www.nbcnews.com/id/32983108/ns/business-us_business/t...