International Marketing Strategies for Costa Group of Holdings Ltd

This report analyzes international marketing strategies and the process of implementing them for Costa Group of Holdings Ltd in Australia. It explores the opportunities present in the international market and recommends strategic directions for the company in Canada.

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STRATEGIC MANAGEMENT

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Executive Summary
The report aims at analysing international marketing strategies and the process of
implementing them. Therefore, the Costa Group of Holding Limited in Australia is selected.
The study starts with explaining the food-focused agribusiness industry of Australia. Then it
analyses the opportunities present in the international market for Costa. Using Porter's
diamond model, the suitability of Canada for business expansion is examined. Next, the best
entry mode for the company is selected that is exporting. The firm should not use licensing,
as it has several disadvantages such as loss of property rights. For the future, the firm should
consider building a strategic alliance with the most competitive agribusiness company of
Canada, so that it can better capture the marketplace and run the business more extensively.

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Table of Contents
Introduction................................................................................................................................4
Discussion on the Australian Food-focused Agribusiness sector-.............................................4
Identifying global opportunities for Costa group of holdings Ltd.............................................5
Discussing various international strategies appropriate for Costa-............................................8
Considering the most suitable and unsuitable entry mode to the international market for Costa
....................................................................................................................................................9
Providing recommendations for the impending strategic direction of Costa in Canada..........10
Conclusion................................................................................................................................10
References................................................................................................................................12

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Introduction
The focus of the report is to comprehend and appreciate the strategy application. Therefore,
the Costa group of holdings Ltd is chosen for identifying international business opportunities
for the company. First, the report carries out a discussion on the Australian focused
agribusiness industry and then applies the Michel Porter's diamond model for recognising
opportunities in global markets for Costa. Besides, the study confers various global strategies
suitable for the company while identifying the aptest and inept entry mode in the worldwide
market. Considering the findings of the analysis, recommendations are developed for future
strategic direction for the firm in the global market.
Discussion on the Australian Food-focused Agribusiness sector-
The food-focused Agribusiness industry is an essential contributor to the national economy of
Australia. The area influences the local economy by creating employment and offering
prospects for service and commerce. The Australian Government's Industry Innovation and
Competitiveness Agenda recognise the Agribusiness as a part of economic advantage for the
country. The agenda priorities the sector as a progress area by the Food and Agribusiness
Industry growth Centre. The industry includes agriculture production pertaining to foods,
food processing and the main input to these functions. The entire industry is classified into
two sub-industries. The food items contain food processing, beverage manufacturing and
central contributions to the subsector. On the other side, agribusiness includes all the
agriculture, which is linked directly to food production. The overall sector hired about
522000 employees in 2015 and near about 178500 business trading, were there in the
industry as of June 2015. The industry generated $53.9 billion as of 2014-15, that was
equivalent to 3.3% of the overall GDP. Food and Agribusiness grew at the speed of 1.0% per
year, and the labour productivity increased by 2.4% per year. Australia is a clear exporter of

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products of food and agribusiness. The country exports more than 50% of the agricultural
items. The worth of exports of these food items had been increasing at a 6.1% annual rate and
reached 40.8 billion in 2015 (Archive, 2019). Agribusiness in the country has always been
one of the industry supports. At the recent time, the business dialogues and political media
are focused again on the sector with trust that the food and agribusiness sector will be a
regular staple for the fortune of Australia. The growing attention has occurred from several
local and international market forces. Globally, the growth, especially in Asia, the middle-
class population and the demands for fibre and food are the primary drivers. Nationally, the
agribusiness industry has been transforming with higher consumer engagement, attachment
and interest to food and its manufacturing. Traders, retailers and processors have noticed
changes in the markets. Once the investors, who do not want to stand with the sector; now,
consider the industry as a feasible sector to collaborate. The growth prospect to the sector is
developing community optimism to new open markets, developing modern technologies and
creating jobs. The reintroduced interest confirms a new level of admiration and prospect that
may improve the agribusiness sector and its contributors (Agribusiness, 2019).
The Australian Trade and Investment Commission or Austrade facilitates organisations
around the world, identifying and accepting venture opportunities in the country and cradling
Australian products and services. The organisation offers an understanding of the capabilities
of the country, identifies the possible investment projects and tactical association partners and
helps to identify and connect to suppliers. It works with a sector and the government team
under the name 'Australia for Agriculture 4.0'. The organisation is displaying the competitive
advantage of Australia in food tech and agtech to an international audience and facilitating
connections (De Clercq et al. 2018). Thus, Australia has drawn the world’s attention
Identifying global opportunities for Costa group of holdings Ltd.

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Costa is a leading producer, packer and dealer of highest quality fresh vegetable and fruits in
Australia. From its leading position, the organisation works extremely hard for increasing the
quality of the harvests and services offered to the customers (Costagroup, 2019).
Using Michael Porter’s diamond model, the global opportunity for the organisation can be
identified. The model helps in identifying the competitiveness of an industry in a specific
international market. It advocates that the ability of any business to compete in the global
ground is based on an interconnected set of locality advantages that some specific industries
in different countries have shown in the following image (Riasi, 2015). The model can be
applied for analysing the regional advantage of Canadian fruit and vegetable or agribusiness
industry. The agribusiness sector in Canada has a provincial benefit, as it satisfies the four
significant aspects of the diamond model.
Figure 1: Michael Porter’s Diamond Model
(Source: Riasi, 2015)

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Firm strategy, structure and rivalry- Canada has a diverse marketplace for agribusiness,
especially fruits and vegetables, with the prospect for growth. Thee exports of fruits and
vegetables from Spain in the nations of North America grew by 35% in 2017. The trade
contract signed by Canada and the EU offers new business opportunities for different
markers. The rivalry among the agribusiness companies in Australia is believed to be intense.
The small-established organisations such as agriculture cooperatives in Canada, Agricore
United, Agrium, and so forth are linked to the rivalry who compete among themselves for
retail sales. Apart from that, there is rivalry among the international marketer, who export
agro-food product to Candida, including Spain, the US and other countries. The country has
an agribusiness market with a growing presence of Spanish vegetable and fruits exports that
have increased over the past five years, by approximately 150% (FruitAttraction, 2019).
Thus, the growth potential for Costa in this country is undoubtedly high.
Demand conditions- In Canada, there is a growing demand for fresh fruits and vegetables
meet standards of high certification. Hence, the necessity of using new technologies in the
agribusiness is crucial for improving sustainability, quality and tractability of farms.
Moreover, the increasing population in the country is increasing the demand for fruits and
vegetables that allows Costa to expand its business here and fulfil the unmet and growing
market (Schmaltz, 2019). Moreover, as per the Canadian surveys, seven among ten children
of 4-8 years and 59.6% adults eat less than five portions of fruits and vegetables advised by
Canada's Food Guide. It increases the chance of heart diseases, strokes, and gastrointestinal
cancer (Heartandstroke, 2019). Hence, the demand for vegetables and fruits high in the
country.
Related and supporting industries- Secondary industries like fertilisers such as phosphate,
nitrogen, potash and other are established in Canada. Fertilizer Canada is a company that

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communicates with the government on a verity of policy issues about the fertiliser industry
(FertilizerCanada, 2019). Hence, it can support the growth of Costa in Canada.
Factor conditions- The Canadian government supports importing agro-foods from
international locations, as the climate of the country limits the home production of fruits and
vegetables. Besides, the Canada Foundation for Innovation applies the Mapping Investments
to Impacts, which is a strategy to discover its role in the national research environment in the
agribusiness. The public sector bears the direct expense of research. The private sector plays
its part, too in the development of R&D in the agribusiness industry (Aic, 2019).
Government- The federal government, in collaboration with the territorial government,
makes agricultural policies and offers subsidies for increasing production and consumption of
vegetables and fruits. The government also invests in restructuring the research and
development.
Discussing various international strategies appropriate for Costa-
Globalisation has been influencing companies to expand their trading internationally, taking
advantage of improved communication, reduced tariffs and increased the mobility of capital.
Among the three different international strategies, including multi-domestic, global and
transformational, for Costa, the transformational approach seems most suitable. Unlike the
other two plans, a transformational strategy encourages company seeking a middle ground
between a global and multi-domestic strategy (Lasserre, 2017). Using this strategy, Costa can
maintain a balance between the wish for efficacy and the needs of the local people. For
example, although, Costa has its range of produces including berries, mushrooms, tomatoes,
citrus, bananas, avocados and grapes, the firm can add some fruits and vegetables are in high
demand among Canadians. These vegetables may include cauliflower, brinjal, and beans,
radish, and so on that are required for keeping Canadians healthy.

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Discussing the most suitable and unsuitable entry mode to the international market for
Costa
Indirect export seems to be the most applicable entry method for Costa into the Canadian
market, as it needs less investment comparing to other entry modes. As stated by Långbacka,
(2018), companies involved in indirect exporting by working with independent
intermediaries. The organisation does not need a global marketing network or firm for
entering into the market. Thus, it will be a less risky process for Costa. Moreover, Calegario
et al. (2015) commented that global marketing intermediaries, including home-based export
agents, merchants, cooperative companies, export-management organisations and
government export agencies, bring services and knowledge to the link. Hence, the seller
usually makes fewer mistakes.
Thus, Costa can engage in indirect exporting for reducing risks and costs of doing business
overseas. The company can gather marketing information from the export management firms.
Further, these firms also help in hiring sales executives within the importing country, in this
case, Canada. They are responsible for developing promotional strategies, handling export
documentation and organising shipping. Moreover, the Canadian government supports trade
liberalisation that makes it easier for Costa exporting the fruits and vegetable to the
intermediaries of the country and enjoying the profit.
Licensing seems to be the most inappropriate mode of entering into Canada for Costa.
According to Stoian et al. (2017), licensing enables a company, which has an intangible
property like trademark and copyright to permit another party the authority to use that
property for a definite period.
The licensing contract can restrict the future activities of Costa in Canada. Furthermore, it
also can disclose information to a potential prospective rival company. Moreover, Hollender

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et al. (2017) stated that licensing provides only a limited level of authority to the company,
and the licenses can turn into a competitor too. A chance of losing intellectual property is also
there. Also, inappropriate management of quality can affect the brand reputation in the
licensed territories. The period of the license is usually limited.
Hence, it may limit the international business activities of Costa in Canada after a certain
period. Thus, the company must not use licensing; the company may lose its intellectual
property and image in the foreign country for the wrong actions of the licensee.
Providing recommendations for the impending strategic direction of Costa in Canada
After exporting for a specific time and identifying the whole industry structure closely, Costa
can think about developing a strategic alliance in the Canadian agribusiness sector. In the
words of López-Duarte et al. (2016), a strategic partnership is developing when two or more
organisations collaborate for obtaining a strategic goal. Based on the goals, the alliance can
be created between a firm and its customers, suppliers or even its competitors for short-term,
medium-term or long-term periods.
Thus, Costa can develop a strategic alliance with the most potent competitor at that time. It
will double-up the strength and advantage of the company of doing business overseas.
Moreover, Costa can share the costs of doing business with the partner and utilise its
employee strengths as well. Apart from that, the company can use its customer base too for
selling its products. Costa can also obtain a competitive advantage by having access to the
capital, markets, and resources of its partner. It will speed up the business expansion of Costa
into the Canadian market.
Conclusion
Globalisation is the leading cause that encourages companies expanding their operations
overseas. Hence, Costa is suggested to grow its business in Canada, considering its location

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advantage. Exporting can be the most suitable process for entering as of now. In future, the
company make a strategic alliance with one of the competitors for better running its business
into the market.

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References
Agribusiness. 2019. Agribusiness Australia - Agribusiness Australia. [online] Available at:
https://www.agribusiness.asn.au/about-us/overview [Accessed 15 May 2019].
Aic. 2019. [online] Available at:
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[Accessed 15 May 2019].
Archive. 2019. About the Food Processing Industry. [online] Available at:
https://archive.industry.gov.au/industry/IndustrySectors/FoodManufacturingIndustry/Pages/
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Calegario, C.L.L., Houston, J.E. and Bruhn, N.C.P., 2015. Foreign Market Entry Strategies In
The United States/European Union Agribusiness Trade Context. International Journal of
Food and Agricultural Economics (IJFAEC), 3(1128-2016-92083), p.47.
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http://costagroup.com.au/about [Accessed 15 May 2019].
De Clercq, M., Vats, A. and Biel, A., 2018. Agriculture 4.0: The Future of Farming
Technology. Proceedings of the World Government Summit, Dubai, UAE, pp.11-13.
FertilizerCanada. 2019. Growing Stronger | Fertilizer Canada. [online] Available at:
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growth. [online] Available at: http://fruitattraction.com/en/market-research-canada-
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files/canada/2017-position-statements/vegetableand-fruit-consumption-ps-eng.ashx?

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Schmaltz, R. 2019. Changing Consumer Preferences Will Impact The Farm -
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