International Strategies and Entry Modes for Bellamy's Australia in Japan

The report discusses the expansion of Bellamy's Australia in the Japanese market and the international strategies and entry modes used by the company. It also provides recommendations for future strategic direction.

Running head Strategic management:

Strategic management
Executive summary
The scope of the agribusiness sector is wide and large in today’s globalization world. It plays a
major role in enhancing the economies of scale and profitability. This sector further generates
various growth opportunities and employment for people in Australia. The aim of this task is
portrayed various information about the agribusiness sector like Bellamy’s Australia. It further
discusses that how the company is functioning and how it expands its business in Japan. Several
international strategies and excellent entry mode that are used by the company while
implementing the business in Japan are briefly elaborated in the task. The entry modes are
needed to enter into the foreign market and uplift the profitability.
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Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
International growth opportunities in Japan.................................................................................................5
International strategies for Bellamy’s Australia..........................................................................................5
The most appropriate and inappropriate entry modes to the international market.......................................6
Appropriate entry modes.........................................................................................................................7
Inappropriate entry modes.......................................................................................................................7
Recommendations.......................................................................................................................................8
Conclusion...................................................................................................................................................9
References...................................................................................................................................................9
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Introduction
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.
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International growth opportunities in Japan
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,
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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).
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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.
Appropriate entry modes
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
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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
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).
Recommendations
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).
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 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.
Conclusion
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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References
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Business group affiliation, performance, context, and strategy: A meta-analysis. Academy of
Management Journal, 54(3), pp.437-460.
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Lin, B.B., 2011. Resilience in agriculture through crop diversification: adaptive management for
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