Business Expansion Plan - Assignment
5 Pages4266 Words362 Views
Added on 2020-09-17
Business Expansion Plan - Assignment
Added on 2020-09-17
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Introduction The present business scenario is such that firms have to search for new ways by which they can focus onbusiness expansion on an international basis. An increased usage digital technology as well as reduction inentry barriers has made this task quite easier one than ever before. But still the firms are required to focuson a lot of areas before they think of making international expansion (Hamilton and Webster, 2015). Theseare inclusive of business environment of new nation, trade blocs, free trade agreements as well as tariff andnon-tariff barriers. The present report thus lays emphasis on the expansion plan for COOK which isspecialised in cooking and selling of frozen and easy made meals that are made with home taste. The firm isplanning to expand its business internationally by importing dried nuts for UK market and exporting driedmilk to Africa. The study has thus laid emphasis on assessing the business environment of Kenya andopportunities/ threats to be faced by the firm for global growth. Focus will also be given on examining thetrade agreements and its impact on overall operations of COOK company.
Advantages and disadvantages of the different types of exporting processes for exporting merchandising and services byCOOKMethods AdvantagesDisadvantagesDirect exporting No need to invest in overseas production facilityMaximum economies of scaleReduced dependence on existing markets.A direct understanding can be derived aboutneeds and preferences of the buyers whichallows for customising the product offerings. It is advantageous when some of the client preferdirect dealing than keeping an intermediary inbetween. Expensive on account of tariffs, marketing andtransport.Need to make consumer baseHard to overcome trade barriers (Gioeli, 2014). There is often a need to invest a lot of time, energyas well as money lIndirectexportingthroughintermediary Business dealings are easy as intermediary canact as translator and interpreter (Gikonyo, Berndtand Wadawi, 2015). Provides assistance with local travelarrangementsGuides with respect to government regulations The intermediaries tend to work with numerousbusinesses.They priorities clients on the basis of products,incentives as well as base pay. Use of an exportmanagementcompanyCarries out entire market research. Is ready to take ownership of goodsUtilizes existing foreign distributors or salesagents for putting the product in market. Increased competition due to other products offersby export company (Chege, Wachira, and Mwenda,2015).Profit margin of EMC increases selling prices andalso adds to cost. Piggybackexporting – it isthe techniquewhere establishedexport distributionsystem sells theproducts. No need to have a full-fledged internationalexperienceFaster entry into international marketLittle or no financial commitment (Marshall,Ockwell and Byrne, 2017). Very low level of control Recieving of inadequate market feedbacklower sales and brand erosion The best technique to be used by COOK for exporting dried milk in Kenya is through indirect exporting via intermediarysuch as foreign agent who can be hired for his knowledge about business practices; languages and culture of Kenyanmarket.
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