Identify international opportunities for your chosen Food focused Agribusiness and discuss different international strategies suitable for your chosen Agribusiness.
International growth opportunities in Japan
In today’s era, the Australian government mainly focuses on the agribusiness sector to satisfy the needs and expectations of the customers. This sector also helps in creating employment opportunities for the people internationally. To analyze and evaluate the success of agribusiness, Bellamy’s agribusiness company has been chosen in the paper. It is a fastest organic food and beverage corporations that provide milk, cheese, and other food products to the customers in Australia. The company decides to enter into Japan for attaining various benefits globally. Japan can provide enormous opportunities for Bellamy’s in the market because the country uses innovative technology and resources. The paper further explains the international strategies and entry modes that can be used by the company while functioning and flourishing the business in Japan. Without planning and making international strategies, the company cannot initiate business in Japan. At the end, some suggestions have been shown to improve and enhance the strategic direction in the foreign market.
Bellamy’s Australia is a major and primary Australia food and beverage Corporation and is the parent organization of Bellamy’s organic, and one of the biggest and leading organic infant formula producers in the international market. The company was incorporated in 2004 with its headquarter is situated in Launceston, Tasmania Australia. The organization offers a wide range of organic food and formula products for toddlers, young children, and babies with over 30 products in the various range from birth to early childhood. It is stated that the company’s ingredients are sourced and unique with a commitment to utilizing the very freshest, certified organic ingredients and high-quality products. All organic food products are made by the firm after keeping mind various factors related to ecological, sustainability and economic (Bellamysorganic, 2108). It is reported from the various literature that the organization’s products are allocated or distributed in Australia, Singapore, Malaysia, Vietnam, New Zealand, China and Hong Kong (Reuters, 2018). Its organic food products are further sold by the company through several online retail platforms. Bellamy’s Australia is largely engaged in the sale, distribution and supply of the organic food products and services around the globe.
Agri-food business is one of the biggest and dynamic growth sectors that helps in enhancing and increasing the revenue and profitability of the firm. Bellamy’s Australia can gain various competitive benefits in the international market (Shinkamanagement, 2018). Japan is one of the largest and important commercial and economic partners. Japan was the fourth biggest importer of seafood and agrifood products across the world. Thus, the company can expand its business operations in Japan and can attain a competitive edge in the foreign market. The country is a long-standing and trusted regionally ally with maintaining a large and unique customer base that is ready to pay high prices for the seasonal exports. Japanese consumer is well known for placing various significance on consuming food that is both safe and high quality (Rothaermel, 2015). Along with this, the Japanese country maintain a strong and dynamic relationship with other countries to promote culture and business in the competitive market. In this way, Bellamy’s Australia can take enormous advantages by expanding and exploring the business in Japan. Japanese is a significant and unique market for agrifood products as it is one of the few markets of the world where Canada could grow and increase exports of processed food. In Japan, the organizations conduct various seminars and training programs to support bridge the cultural, cooperation and communication gap with Japan for improving and encouraging the business results and profitability. Maintaining a healthy and dynamic relationship can be helped in understanding the new techniques, considerations, and expectations that are required to conduct business in Japan. In Japan, Bellamy’s can easily cater agri-food products to the customers with the help of a strong and effective communication system (Agriculture and Agri-food Canada, 2018).
International strategies for Bellamy’s Australia
Some of the suitable and effective international strategies for Bellamy’s Australia have been discussed below.
Multi-domestic: It is noted from the various facts that Bellamy’s can use multi-domestic marketing strategy for emphasizing responsiveness in the Japanese market. Implementing a multi-domestic strategy, the company may customize its agri-food products to meet the long-term needs and preferences in the Japanese market (Moon and Kim, 2008). As a result, Bellamy’s Australia can compete more efficiently and effectively in such a market and maximize its market share in this country (Connelly et al, 2007). This strategy helps in making unique and effective decisions in the global market. It is assumed in this strategy that markets are different and therefore, segmentation is done by the countries boundaries (Sanderson, 2014). Initiating this strategy, the company has been able to successfully understand and determine the choices, preferences, and needs of the Japanese (Saylordotorg, 2018).
Global strategy: Bellamy’s may use the global strategy, in this strategy, the company does not need to make the changes in the products. Bellamy’s Australia can launch the same products in the global market (Rui and Yip, 2008). Thus, Bellamy’s Australia can initiate this strategy while expanding the business in the Japanese market. In this strategy, the strategic business units conducting in each and every country are assumed or predicted to be independent thus, it helps in maximizing the outcomes globally (Carney et al, 2011). The global strategy further emphasizes large economies of scale and renders great and unique opportunities to utilize innovations at international level in each and every country. By using this strategy, the company can reduce the risks and challenges in the international market (Saylordotorg, 2018).
Transnational strategy: One of the significant and major strategies that initiated by the company is a transnational strategy. It is a combination of global strategy and multi-domestic strategy (Poulis, Poulis and Plakoyiannaki, 2013). This form of approach is highly suitable and desirable for the firm. Bellamy’s can easily adopt this strategy to outperform competitors who utilize either the global corporate-level strategies or multi-domestic strategy as well (Sakarya, Eckman and Hyllegard, 2007). This strategy further helps in building and enhancing the core values in the international market. By initiating this strategy, the organization can maintain a balance between the desire, needs, and preferences of the international and domestic customers as well. It has been analyzed that various multinational companies such as McDonald's and Ford motor company adopt this strategy to stay in the international market widely (Saylordotorg, 2018).
The most appropriate and inappropriate entry modes to the international market
The most suitable entry modes for expanding and exploring the business in the Japanese market can be used by the firm for boosting business internationally. The suitable and inappropriate entry modes for Bellamy’s Australia have been detailed below.
Strategic alliance: One of the vital and important strategies that could be used by the company is a strategic alliance. Before making the big and significant decisions related to expansion and development, the company needs to set and identify suitable entry mode in the international market. Bellamy’s Australia can use strategic alliance entry mode to run the business smoothly and successfully. It is important to rely on the partnerships with best companies present in Japan for gaining competitive advantages over the rivalries (Nielsen, 2007).
Exporting: Exporting method is a cross-border sale of manufactured products and services. There are three types of exporting including direct exporting, indirect exporting and cooperative exporting. The exporting entry mode is much effective and unique than other entry modes. By using direct exporting, Bellamy’s Australia can reduce the extra cost and prevent the risks and challenges globally. Exporting is a common and popular method that can be used by the company when they first enter into a new and innovative market. Thus, Bellamy’s Australia may initiate this entry mode to make a strong brand image globally. This method further requires less commitment and gets their brand exposure to the new Japanese market. In today’s modern world, exporting is becoming more prevalent and excellent method across the globe due to the reduction and removal of trade rules and barriers and further transport becoming less cheap and more effective (Mbaknol, 2018).
Wholly owned subsidiary: It is the process whereby an organization enters into a foreign market with 100% ownership of the foreign company (Mbaknol, 2018). There are two ways through wholly owned subsidiary can enter into the foreign market such as greenfield operations and acquisition (Chen and Messner, 2009). In Acquisition method, Bellamy’s Australia can buy a foreign organization for entering into the Japanese market. On the other hand, Greenfield operation is a creation of a new firm and legal entity in the international market. The success and growth of this entry mode are dependent upon the companies’ goals, objectives, and circumstances. In this way, wholly owned subsidiary entry mode could be used by Bellamy’s Australia while exploring and conducting the business in Japan (Mbaknol, 2018).
Inappropriate entry modes for Bellamy’s Australia are as follow:
Licensing: After the various studies, it is portrayed that licensing is not suitable for Bellamy’s Australia for entering into the Japanese market. In licensing method, there should be an agreement that allows the companies in the target country the rights to utilize the assets of the licensor. The property can be tangible and intangible such as patents, copyright, trademarks, and production methods. Therefore, high risk and barriers are associated with this entry mode. Some of the disadvantages of this entry mode include poor control over utilization of property, knowledge spillovers and license time is limited. Hence, this method is not good and effective for foreign entry and expansion (Mbaknol, 2018).
Direct investment: The method which not suitable for Bellamy’s Australia is a direct investment. Although, the firm can use this entry mode but ample of challenges and risks are associated with this entry mode. This entry mode requires more commitment and resources, therefore, it is not an appropriate entry mode for Bellamy’s Australia. Indirect investment method, it can become quite complex to handle and control the local resources (Quickmba, 2018).
Suggestions or recommendations help in providing right and unique direction to the companies while exploring the business. The recommendations to Bellamy’s for the future strategic direction in the Japanese market are discussed below.
- Business diversification strategy shall be taken into consideration by Bellamy’s Australia while functioning and entering into Japan. It is been suggested that the company should initiate this strategy for growth, expansion, and development. This strategy further helps in providing an excellent option to flourish the business activities in the Japanese market (Lin, 2011).
- Cost leadership strategy must be considered to operate business functions in Japan easily and smoothly. This strategy further provides support to compete and strive with competitors in the Japanese market.
- A market research and survey shall be conducted before entering into Japan. This market research and survey helps to understand and identify the preferences, experience, choices, and requirements of the customers in the foreign market.
- The political and legal system of Japan must be identified and analyzed to run the business successfully. Pestle analysis should be done to beat the rivalries and to make a better brand image in the minds of the clients and suppliers. Pestle analysis also helps in preventing and reducing the barriers, challenges, and risks of the competitive market.
To conclude, Bellamy’s Australia is a well known and popular food and beverage organization in the country. In today’s competitive world, the company is able to maximize its outcomes and profitability through its effective brand image in Australians. For growth of the business, the company has decided to expand and explore its business in the Japanese market. The above-mentioned report summarizes that Bellamy’s uses unique and attractive international strategies to enter into such market successfully. It also focuses on the customer experience and knowledge in Japan. To expand and flourish the business in Japan, Bellamy’s Australia selects suitable and innovative entry mode that include exporting, strategic alliance and wholly owned subsidiary. By using these entry modes, there can be a scope to maximize and boost profitability in Japan.
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