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Establish an International Business in Frontier Market - Research Paper Example

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Coffee has been grown in Kenya since the advent of the twentieth century and its one of the products listed in Kenya’s National Export Strategy that is aimed at improving the countries balance of payments (Cate, Condliff et al 15). Kenya is a relatively smaller player in the…
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Establish an International Business in Frontier Market
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Download file to see previous pages As it is, the value chain extends from the coffee growers at the extensive large scale farm and small scale farms, to the factory for drying and husking and to the millers who take over the grinding process. The unpacked coffee goes through the sorting process at the millers that is supervised by the coffee board of Kenya for quality and grading purposes. Marketing agents then take over the sales process. This is the likely scenario where the company can come in.
The selling is done through either direct sale by highly unregulated but established and networked brokers who then sell the coffee to the overseas buyers or through auctions at the Nairobi Coffee Exchange that are well regulated by the Kenya Coffee Traders Association. Coffee exporters in Kenya opt for the auction procedure because of its associated transparency in pricing. The company would also pursue this option as it seeks to break into the coffee export business in Kenya. Global coffee consumption is on the rise thus boosting demand. Global demand has also been increased by other increasing uses of coffee especially in the medical field that were previously unknown. The increasing global demand of the product provides an international business opportunity for the company.
Kenya is one of the fastest growing economies in Africa. Its strategic geographical location makes it a suitable location for conducting an export business. The country also has a relatively calm political environment compared to other frontier markets in Africa. Turbulence was experienced in the 2007 elections but a new constitution dispensation and the increased democratic space has seen the country claim the bragging rights as one of the most mature democracies in Africa. The prevailing stable political environment creates a favorable investment climate for international investors (Hill 214).
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