Exporting Food and Beverage in Emerging Economies - Example

EXPORTING FOOD & BEVERAGE IN EMERGING ECONOMIES STUDENT’S NAME: INSTITUTION: INSTRUCTOR’S NAME: DATE: Table of Contents 1.Part A- International business challenge 3 1.1.Current strengths of the company 3 1.2.Where to build on the strength 3 2.Information needed for the market 5 2.1.Risk management 5 2.2.Strategy deployed 5 2.4.Assets 7 3.Part B- Strategic plan 7 3.1.Key actions a Victorian food export needs to do to start a company 7 3.2.Do the preliminary market analysis 8 3.3.Performing a survey on the selected market 8 3.4.Evaluation and selection of food to be exported 9 3.5.The company will look for local cooperative partner 9 3.6.Market propaganda 10 3.7.Food export process 11 3.8.Entering the market 11 3.9.Opening the overseas branch office 12 3.10.Ordering food production and food storage equipment 12 3.11.Installing the equipment 13 4.Challenges faced by the company in implementing exporting strategies 13 5.Conclusion and recommendation 14 Reference 14 Exporting food & beverage in emerging economies –Victoria Exports Where to export (Victorian food Export Company exports to Asia and Middle East) 1. Part A- International business challenge 1.1. Current strengths of the company The company has allocated some funds to aid in research and development which will improve the company process of exporting. Research and development facilitates innovations and discovery of new ways of enhancing and promoting exports. This is a great opportunity for the company to identify more markets that will import their products; it also helps the company to identify new tastes and preferences of the buyers and therefore increases their exports. Innovations in the company have facilitated generation of ideas that present the company with a bright future by engaging in exporting food and beverages. Innovations include value addition of food and beverages so as to boost the shelf life and hence the products will be less perishable. This is an important strength to the company because they are able to save costs associated with the nature of perishable foods. The government has built innovation centers for the company such as red meat innovation Centre, national center for dairy research and grains Innovation Park. The Victorian food export industry will, therefore, rely on research and development to come up with new technologies for enhancing their production and export of food and beverages. 1.2. Where to build on the strength The strength will be built on the fact that Victorian government has invested in agricultural production whereby the citizens of this country practice production of different crops for export purposes. The developing markets where the company will export its products are the basis for an extra effort by the government to enhance production of fresh food. These markets include Asia and Middle East countries. Victorian food and export industry contributes the largest sector in employment and this result to economic development. Technology was a constraint in the country; however, there is a positive attitude towards embracing technology by farmers in the country. When there is adoption of technology in food industries, it opens an opportunity for further innovation and development and therefore the ability to export more unique features of food and beverages. The plan to promote and enhance food production and export will enable the company to compete with Asian markets, opportunity to find customers from Asia engage with suppliers and hence understand the tastes and preferences of Asian people. The plan has some strategies to address issues that pose a challenge to the food industry, and they include availability of labor, infrastructure issues, trade barriers and extensive research and development. The government of Victoria aims at reducing factors related to tariffs and barriers that affect markets in Asia, through advocating for Victoria’s interest to engage in free trade agreements and developing strategies to address impacts of pests on Victorian foods in their farms. 1.3. Factors where the company can apply Victorian food and Export Company has several factors where it can apply. The first factor is exporting of meat; the company will export red and white meat to Asia because the country has invested in developing meat research centers where development on value addition of meat is done. The company will also export grains, and this is supported by the fact that most farmers cultivate grain crops and therefore there is a high supply of grains which are exported. Exporting of dairy products is the last factor for the company, the farmers in Victoria have ranches and therefore they produce dairy supply. Asia, on the other hand, relies on dairy products from Victoria because they do not engage in dairy farming. 2. Information needed for the market 2.1. Risk management Risk management is an aspect of ensuring that the business undertaken will face minimal risks or will be able to overcome challenges as a result of risk taking. The company needs to be equipped with risk management skills because it deals with sensitive business of exporting food and beverages. A major factor that leads to risk in this business is because foods are always perishable in nature and therefore mechanisms to avoid losses due to perishable products should be considered. Other factors that demand risk management include the stipulations of the external environment which contributes to the success of exporting business. These factors include the legal, political economic and social factors. They dictate the nature of the business to be carried out and hence pose a risk to the industry. 2.2. Strategy deployed The company has set some strategies to enable its success towards exporting to Asia and Middle East. The strategies include exporting fresh food products to their customers, and this is done through timely harvest and post-harvest handling of fresh foods so as to avoid spoilage of perishable products. Safety handling of food and beverages to promote health concerns and thus to win the trust of customers is another strategy. Prices for exports should be friendly to the customers, and this will enable more customers from different countries to import their food from Victoria and also the companies will package their products in a safe and convenient manner which will attract more customers. The chart below shows the export structure whereby the strategy of the company will follow so as to achieve the mission of being the best export company. 2.3. Information reliability The company will use technology for the purpose of acquiring more information. The use of information technology in the industry is essential for effective flow of information and also for acquiring new information from the internet sources. The company relies on the internet and also from the customer’s response on their perception towards their products. The government also plans to organize for conferences with other potential countries and perform exhibitions on the types of foods and beverages to be exported. This will enable Victoria to fetch new markets and hence expand their export zones. Conducting market analysis will also help the company to acquire more information on the tastes and preferences from their customers; this will enable the company to specialize on the foods and beverages that are mostly preferred. 2.4. Assets Assets are things the company will use in the production and distribution of their products. These include machineries for processing and storing foods and beverages; the company should have them so as to facilitate the export process. Transport facilities should be available for example transport facilities to be used to collect produce from farmers and also for transporting them to the airport. Other assets include storage systems where the products will be stored while awaiting for export. The government of Victoria has enabled the progress of the company strategy by providing facilities to be used in the processing and storing of foods. It is through the funds from the government that export process will be accomplished. 3. Part B- Strategic plan 3.1. Key actions a Victorian food export needs to do to start a company When a company is ready to export its products, it should carry out a plan on how to accomplish the activities of exporting process. The plan has to be strategic and each step should be accomplished in the plan. These stages are explained below with each stage indicating the time period taken to be accomplished. 3.2. Do the preliminary market analysis Feasibility test is a process undertaken by a business person who has never been to any business activity and has a business idea; therefore, the company will conduct a feasibility analysis to measure whether there is an opportunity of conducting export and whether the existing opportunity is promising in the future. Factors such as demand and supply should be considered when conducting market analysis, economic social and political factors also determine the type of business to be carried out and thus the company has to investigate on these aspects. The company has identified an existing market in Asia and the government is looking forward to organizing conferences and exhibitions so as to attract more markets. The growing population of Asia contributes to demand of food and also the aging population demand fresh foods. The demand for fresh foods in the Middle East is a key drive towards production and exporting of food and beverages. The company will spend two months in conducting a preliminary market analysis. 3.3. Performing a survey on the selected market After selecting a market, the company will, therefore, conduct a market survey whereby it will involve considering issues such as the market environment. It is important to conduct a market survey so as to find out more about the preferred market and hence export food and beverages that are demanded in the market. Also familiarizing with the market is important because it will facilitate the flow of activities. Customer's taste and preferences will be obtained by conducting a market survey and also factors such as external and internal environment will enable the company to discover issues needed to be considered when conducting the business. Exploring space availability and the distribution of target market will enable the company to organize on the location and distribution channels. 3.4. Evaluation and selection of food to be exported The company will take two months to evaluate and select foods to be exported. Victorian food and export industry has a wide range of food produced in the country, Ranging from fresh food from the farm to processed foods in the factory. Evaluation and selection of food to be exported highly depends on the selected market whereby the demands of the target market will be considered. The customer’s need will be the first priority when it comes to selecting the food. The selected food are frozen meat, frozen seafood, cereal, spices, dairy products, fresh produce, canned fruits, sources and spreads and snack products. All these products will be selected and parked in their specific cans with labels so as to facilitate easy transport and recognition. 3.5. The company will look for local cooperative partner It is important to have a local cooperative partner that will help in collecting the produce from different regions of Victoria. Two months will be spent in looking for the cooperative partner. The cooperatives to be considered are for example supermarkets, groceries and stores, they will help the company to supply and collect foods from producers. The company will have to study the cooperative and make decisions especially if the cooperative will be willing to partner with the company. This is the process that involves signing contracts with the cooperative and ensuring that they meet the terms and conditions of the company. The cooperative will be helpful to the company because it will help in collecting fresh farm produce from the regions where the company cannot reach and store them while waiting to be transported. It will also perform duties such as selecting the fresh produce according to the quality. 3.6. Market propaganda Market propaganda involves the process of gathering information from the target market; it involves analyzing the gathered information and making decisions that will go in line with the information from the market. It aims at broadening the influence I the market by familiarizing with the stipulations from the market. Some aspects like price and demand are more important, and since they are factors that form market propaganda, it will help the company to remain up to date with the changes taking place in the market. Three months will be appropriate to collect information from the market and evaluate the collected data. Market propaganda helps the company to forecast their future demand for their exports and thus give room for organizing on how to maximize profits during low demand. 3.7. Food export process After the company has conducted a market analysis and has identified factors influencing demand. It will organize for export process whereby it will involve the process of transporting food from the storage centre to the main store and then packaging them in their special cans, transporting them to the airport and eventually distributing the products from the airport to the main centers where it will be made available to the customers. The export process has to undergo stages such as checking the quality and quantity of the food, their expiry dates and testing whether the food is convenient for human health. One month is enough for the company to accomplish the plan and strategies for exporting the food. The company has to ensure the strategies for exporting are appropriate so as to ensure customer satisfaction. 3.8. Entering the market The company will spend two months to enter the market, and it will involve the process of influencing customers to buy and consume food from their company. This stage requires marketing skills in order to persuade customers on the importance of consuming fresh food instead of convenience food which have a long term side effects to a person. The process of entering the market is quite critical, and the sales department needs to be self-driven, remain focused and exercise patience. Visiting the market severally is also essential to build customer relationship and win their trust. The company will also identify the appropriate channels of distribution where they will be able to avail food products to all the customers in time to avoid spoilage since food are perishable products. Finding a niche market results from competitive prices and well packed food products, therefore, the company will ensure they pack quality products so as to attract more customers. The company should ensure that their products are popular by conducting promotion activities and influencing people to consume fresh foods. 3.9. Opening the overseas branch office After the company has settled in the process of exporting food, it is important to have an overseas branch office where the exported food and beverages will be stored and where the marketing department will be situated. The branch office will serve as a link between Victorian Company and the importing countries. The office will be convenient for collecting more information about the market and also it will act as a customer care centre where the importing countries can express their complaints. In order to establish a branch office, it is important to conduct the following; firstly, the company will study the geographical area while taking into consideration the target market. Secondly the company will analyze the availability of transport and infrastructure used in the office. Third, exploring the availability of space to set up a branch office and lastly, consider the license to be issued so that the operations of the office will be smooth. This is the longest process in the stages of ensuring export business has been accomplished because it will take four months to accomplish the stage. 3.10. Ordering food production and food storage equipment After the company has established appropriate location overseas, the next step is to order food production and food storage equipment in the new branch. It is clear that a new branch requires equipment to be used in production and storage of food products. The company has to budget for this equipment and order them from specific suppliers. The company will use three months to ensure they order appropriate equipment. The ordering process should be timely such that there will be minimal use of time in installing and commencing the business overseas. The equipment ordered should be checked to avoid future costs of maintaining and repairing them since it will lead to loss for the company. 3.11. Installing the equipment Once the equipment is ordered, the final step is to install the equipment and commence the process of production and storage of food. Two months will be used to accomplish the mission of installing equipment and ensuring they are safe and effective for use. Installation program should involve the use of technology in the branch to enhance faster production and thus timely accomplishment of activities. The company has to higher competent technicians to conduct the installation of this equipment and also prior to beginning a business; employees should be recruited who will carry out the activities of production and storage. 4. Challenges faced by the company in implementing exporting strategies In the process of implementing the plans to export food and beverages to Asia and the Middle East, there are some challenges that undermine this activity. Infrastructure as one of the challenges poses a risk to the future export business because good infrastructure will enhance more production and transportation of food and beverages. Taxation is another challenge that discourages the export business because the company has to meet the deadlines for paying taxes. Connecting the new markets is also a challenge since Victoria will be exporting to the new markets and therefore it will require more time for the new markets to familiarize with the products from Victoria. Victoria is rated the most profit making in Australia; however it has never been given the opportunity to expand their production and hence become the source of capital for Australia and thus it’s a challenge. 5. Conclusion and recommendation Victoria contributes the highest when it comes to economic development in Australia; therefore; the Export of food and beverages will influence agricultural practices and hence there will be enough supply. Opening up markets overseas is a step towards attracting global consumers, and this will fetch Australia high profits. It is recommended for Australian government to improve on infrastructure and commence land reform programs to enable more production; also, the rate of the dollar should be lowered to enable people of Victoria to be able to produce more food. Reference Kapoor, D. C. (2009). Export Management, 1E. Vikas Publishing House Pvt Ltd. Westwood, J. (2012). Building Your Business Through Export. Kogan Page Publishers. Zaharuddin, H. (2009). Business Plan Analysis for Export-Import. Dickson. Read More