Develop an Export Strategy for an Organisation - Case Study Example

Paper reference: Insert the paper Paper Develop an Export Strategy for an Organization Brief analysis of the issue This essay will be looking at Codelco Company, which is a leading firm in Pawpaw fruits production in Chile, a country in South America. The company holds a great market share in American continent and it wishes to expand the market for its Pawpaw fruits internationally. In relation to this, Codelco would wish to get into an international trade through exporting the fruits to Germany. Germany is one of the most industrious countries in European continent; it is ranked number of the leading industrious countries in Europe. It is a reputable producer of mechanical engineering products for the aviation and automotives industry (Ohlin, 18). Consequently, Codelco considers German a viable market and destination of its pawpaw fruits in effort to expand its global market share since it has less agricultural ventures. Recommendations Due to the bulkiness related to pawpaw fruits, Codelco Company has opted to transport its fruits by rail to the port in San Antonio. From this port, the fruits will be packed into the containers and sealed for their consignment to Germany. In Germany, the containers filled with pawpaw fruits will be collected from the Port of Hamburg by Codelco’s agencies to its silos in Berlin for marketing and selling in the International market. Berlin is centrally located within Germany; therefore, it would very convenient to mobilize clients from a centrally located position. Due to her location, it is easy to reach all parts of the country effectively and efficiently. Once the goods are loaded in the ship for export, Codelco will claim responsibility with insurance and freight companies in a Free on Board (FOB) agreement. This is to ensure compensation incase the ship sinks or comes across any other hazards that may result in destruction of the goods while transit. FOB will reduce the risks of loss while goods are on consignment. Codelco has established its branch in Germany that would be undertaking marketing of Pawpaw fruits within the country once they have been cleared at Hamburg port. This would reduce the risk of interference by other competitors exporting Pawpaw fruits to Germany. The transportation of Pawpaw fruits within Germany would be executed by Codelco’s trucks stationed at their agencies. This is meant to reduce the distribution cost through hiring logistics. The Codelco’s agencies in Germany are concerned with marketing of Chilean Pawpaw fruits in Germany. There are various automotive, electrical and aviation engineering firms and food industries within Germany that would offer a great market for Chile’s Pawpaw fruits. It is the mandate of Codelco Agencies to advertise and promote the Chilean Pawpaw fruits to these food manufacturing industries in Germany. It is recommended that Codelco will offer the most refined Pawpaw fruits in Germany. Pawpaw fruits from Chile shall be at least 96.71% pure. Purity in the fruits refers to absenteeism of infected fruits, as well as the freshness of the fruits. This would facilitate a remarkable reputation of Chilean Pawpaw fruits in comparison to others by competitors in Germany (Ross, 97). In addition, the short distance between the Hamburg port and San Antonio is another advantage for Coldeco. Indeed, it minimizes the cost of transporting the fruits, which will consequently reduce the prices of Pawpaw fruits exported to Germany. Offering high quality Pawpaw fruits at relatively less prices would increase Codelco international Pawpaw fruits market share compared to other competitors in Germany. Codelco Limited must invest in advertising and promoting the fruits in the Germany Market to win over customers. Advertisement targets to create awareness of the quality Pawpaw fruits the company is exporting to Germany. Increased awareness will boost the sales in the long run, thereby increasing the profitability of the business. By engaging in a high profit yielding trade, Cadelco will help Chile to increase its international balance of trade. The outcome of such trade is the appreciation of the local currency in Chile, making its citizens to purchase imports at relatively cheaper prices. Background Cadelco is the leading Pawpaw fruits producing company in America. In the global ranking, Chile is the second largest producer of Pawpaw fruits. The Pawpaw fruits in Chile were discovered in 1843 and was firstly harvested and refined for human consumption in 1878 (Ming, 56). Pawpaw fruits are naturally occurring plants that have a wide application. Pawpaw consists of essential minerals that are necessary for health growth of body cells which are further elaborate in this essay. Also, a pawpaw tree consists of papaya enzymes, which are essential in industrial skins and tides polishing. Chile’s Pawpaw fruits are recognized the purest among all the world producers. It produces an average of 600 tons of Pawpaw fruits in a year; this translates to income of 123 billion US dollars after operational costs, tax and all other legal deductions (Ming, 56). With the increase in Pawpaw fruits production, Chileans have created employment, cutting down unemployment rate to less than 3% of the total population (Ming, 56). Different Pawpaw fruits processing industries have been established within Chile economy that has provided citizens with job opportunities. International Monetary Fund and World Bank have come in to influence Chiles Economic progress by funding Pawpaw fruits excavation ventures. Pawpaw fruits processing firms have increased the standards of living to the people of Chile and South America as a whole due to availability of employment opportunities within their country. Chiles considers Germany a potential market for its pawpaw fruits. This is because Germany soil does not support agricultural productivity (Oluma, 77). Most of the times, Germany depends on fruits from other countries, such as Apples from South Africa. Germany is located around the North Pole and experiences a harsh cold weather during the weather. Due to this, it is difficult to grow most fruits including pawpaw hence it relies on exports from other countries (Oluma, 77). Pawpaw trees grow in a moderately temperate environment that receives average levels of rainfalls. Chile has one of the best environments for growing pawpaw hence embraced a large scale production of the trees and its fruits. The applicability of contents of papaya has elevated its demand all the world. Pawpaw extracts are used in manufacturing of anti-parasites. They are very effective in killing parasites and other minute insects, such as lice. Germans are well known for their passion in pets. Most of the pets are commonly infected with these small parasites and require constant care. Germans are also great dairy farmers, hence in a constant demand for pesticides (Taylor, 72). Therefore, a consistent market offering a supply of pawpaw products would facilitate the growth of insecticide firms in German that could be exported to other countries. In terms of the health benefits, pawpaw has wide applications. These include a rich source of magnesium, weight reduction due to its filling capability and the extracts from the fruit are essential for minimizing development of cancerous cells in the body. Pawpaw fruits are also rich sources of vitamins, such as riboflavin, niacin, vitamin C and thiamin that are important to the human body (Horst, 15). Research on the assessment topic Chile Chile is an economically average country found in South America. The country borders Argentina and Bolivia, with a long coast line along South Pacific Ocean. This wide coastal line makes accessibility to various destinations in Chile easier through the many ports along Pacific Ocean. The fact that Chile is not a landlocked country facilitates sea transportation of bulky commodities, such as pawpaw fruits through sea ports. Germany There is a great demand of pawpaw fruits and papaya extracts in Germany. This is because the Country’s climate does not support development of pawpaw trees. The wide demand for pawpaw products has motivated Codelco Limited to exploit the potential pawpaw market. Since other rich pawpaw growing countries, such as Madagascar cannot access Germany ports efficiently as compared to Chile, Chile has taken this advantage to boost its economy by transporting Pawpaw fruits and extracts to Germany. Arguments against Recommendations Codelco Limited would have to look for the huge capital that is associated with Pawpaw exportation business to Germany. The cost of implementing the business is calculated to be an average of 12% of the average gross product of Chile. If would be tricky to initiate its commencement without enough capital to support all the activities. A lot of money is required to purchase the specialized containers to transport the paw paws without causing any damage, as well as for establishment Codelco’s agencies in Germany. New investment on infrastructure and product promotion in a foreign country will be very expensive for Codelco’s Company. If good financial management is not embraced by Codelcos’s company, the dream of getting into international trade with Germany may never be realized. Seeking finances from banks and other financial institution may constrain Codelco in carrying out its business efficiently due to high interest rates in repaying the banks loans. It is a long process to acquire documents that legalize a company to carry out international trade. Also, there is certain capital figure that a company must attain to be allowed to conduct international trade with developed countries, such as Germany. It is the mandate of Codelco’s Management to adhere to every legal requirement before getting into the business. Arguments in Support of the Recommendations There is a high probability of business growth with exporting papaya products to Germany due to its large market with few suppliers. Use of modern technology would increase the quality and quantity of papaya products to be exported to Germany. High quality products, as well as ensuring a consistent supply of papaya would increase the competitive advantage of the company. More so, the ease of accessing Germany’s sea ports from Chile enhances efficiency in transportation of the consignment, as well as minimizing cost. Also, seeking the services of international trade consultancy firms in Germany would facilitate research that will help in boosting the market share of the products internationally. Implementation of the Recommendations Rail transportation Transportation to Sea transport (FOB) Germany’s Market Transport by Tracks Once all the legal requirements are fulfilled, and the appropriate infrastructure developed, Codelco will commence its export to Germany. Codelco’s Agencies in Germany will receive the consignment and transport them to their warehouses in Berlin, which is centrally located in Germany thereby easing transport costs and reducing logistic related risks. Special warehouses equipped with refrigerators will ensure good preservation of papaya fruits and extracts before distribution to potential customers. Lists of References Horst, R. K. 2013. Westcotts Plant Disease Handbook. Dordrecht: Springer Netherlands. Ming, R., & Moore, P. H. 2013. Genetics and Genomics of Papaya. Dordrecht: Springer. Ohlin, B. (2007). Interregional and international trade. Cambridge, MA: Harvard University Press. Oluma, H. O., & Amuta, E. U. 2009. Corynespora cassiicola leaf spot of pawpaw ( Carica papaya L.) in Nigeria. Mycopathologia. doi:10.1023/A:1007009902939 Raju, R. 2012. Solar dried tropical fruits from Fiji: Evaluation of quality parameters in pineapple and papaya. Ross, I. A. 1999. Medicinal plants of the world: Chemical constituents, traditional, and modern medicinal uses. Totowa, NJ: Humana Press. Taylor, N., & Thaman, R. R. 2011. Plants of the Pacific Islands. Auckland: Longman. Read More