Grain Corporation: Strategic Management for Expansion in Chinese Market

The report discusses the role of agribusiness sector in the global market with Grain Corporation as an example to explain the role of agribusiness in Chinese market. International strategies and entry modes are also presented in the task that helps the firm in implementing the business activities in China. The report concludes with recommendations for improvement and expansion in Chinese market.

Running head: Strategic management
Grain Corporation
Strategic
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Strategic management
Executive summary
The main object of this report is to discuss about the role and significance of agri-business sector
in the global market. Grain Corporation has been chosen in the report as an example to explain
and outline the role of agribusiness in Chinese market. International strategies and entry modes
are also presented in the task that helps the firm in implementing the business activities in China.
At the end, some recommendations for improvement and expansion in Chinese market also have
been discussed briefly.
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Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
International opportunities for Grain Corporation Limited in China...........................................................5
International strategies for expansion business in China.............................................................................5
Transnational strategy.............................................................................................................................6
International strategy..............................................................................................................................6
Multi-domestic strategy..........................................................................................................................6
Entry modes to the international market......................................................................................................7
Appropriate entry modes.........................................................................................................................7
Foreign direct investment....................................................................................................................7
Strategic alliance.....................................................................................................................................7
Inappropriate entry mode.............................................................................................................................8
Joint venture........................................................................................................................................8
Franchising..........................................................................................................................................8
Recommendations for future strategic direction of Grain Corporation........................................................8
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10
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Introduction
Agribusiness sector is significant and play a vital role in every country to uplift profitability and
maximize GDP. Growth opportunities and employment are created through agribusiness sector.
Grain Corporation has been taken in the task to explain and outline the significance of agrifood
business sector in the global market. It is an Australian food company who renders innovative
grain services for the customers internationally. Various planning are done by the company to
enter into the foreign market. The paper portrays that how the Grain Corporation uses
international strategies to enter into the Chinese market. Chinese market will help the company
in providing various innovative opportunities in the marketplace. Along with this, appropriate
and inappropriate entry modes that can be implemented by the firm have been discussed in the
paper. More detail of the task is elucidated below.
Grain corporation limited is a public company listed on the Australia securities exchange in
Australia. The main business of the firm is the storage and receivable of grain and related other
communities. Also, it renders logistics and markets these commodities. The company was
incorporated in 1917as a New South Wales public sector agency (Graincorp, 2018). The unique
businesses, integrated and unique mix of assets permit people to render high quality of assurance,
scale, competitive prices and confidence of supply. The vision of the company is to be a leader in
agribusiness sector. The firm is responsible for actions, decisions and results. The aim of the
company is to achieve high outcomes, celebrate progress and learn from ample of mistakes. The
organization establishes good and strong relationship with producers and buyers in the
competitive market. In today’s competitive world, the company is proud to be a leading and
growing international agribusiness with diversified and effective operations and activities that
span four continents and international food supply chain. Grain marketing and handling services
are being rendered by the firm in today’s globalization world. Grain Corp. was listed on the
Australian stock exchange in 1998 which shows strong and dynamic growth of the firm through
acquisition. Safety, security, dignity, respect, customer satisfaction and accountability are
included in the core values of Grain Corp (Graincorp, 2018).
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International opportunities for Grain Corporation Limited in China
China remains one of the biggest growth and innovative markets in the agrifood business sector.
The market of the agrifood business sector is also producing and making an effective and
favorable image in the global market. Thus, Grain Corporation limited could take ample of
benefits in Chinese market while initiating the business functions (Scoones et al, 2016). The
reason behind this is lie in current technical upgrades and modernizations in the agribusiness
sector that is being supported by the Chinese market (Scott et al, 2014). Moreover, the claim is to
be found regarding the quantity and quality of food maximizing in the Chinese middle class.
Therefore, Grain Corp. can ultimately beat the rivalries in the global market. It is reported from
the various facts that China is the fourth largest and unique customer of agribusiness food import
and export products. It has been elucidated that Chinese market is fundamental and dynamic for
agribusiness food sector (Hoffmann, 2016).
China is a fastest and biggest growing market in Asia in the agribusiness food sector. Apart from
this, the market is large and further growth and success is estimated effectively and efficiently.
The agribusiness food industries are securing an excellent position in the Chinese market through
their advanced leadership and technology. With dynamic leadership and advanced technology,
Grain Corporation limited can build and improve brand image and financial position in the
Chinese market. This further leads in productivity, precious, energy efficiency and durability is
promoted and appreciated by Chinese customers in a large extent (Pereira, Teixeira and Raszap-
Skorbiansky, 2010).
International strategies for expansion business in China
International strategies are needed to beat the competitors and expand business internationally.
No firm can grow and strive with competitors without using international strategies widely
(Banalieva and Dhanaraj, 2013). There are various international strategies such as transnational
strategy, multi-domestic strategy, and global strategy which used by the Grain Corporation when
entering into the Chinese market. The international strategies for expansions and development
have been elucidated below.
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Transnational strategy
Grain Corporation can use this strategy to seek a middle ground between a global and multi-
domestic strategy. By implementing this strategy, the company tries to balance the needs,
requirements and wants for efficiency with the desires to adjust to local choices and preferences
in different countries (Doole and Lowe, 2008). This strategy helps in creating more growth
opportunities in the Chinese market. The difficulty is that adjusting the global strategy and multi-
domestic strategy is hard to do because it needs attaining or fulfilling the dual goals and
objectives of coordination and flexibility. Thus, the company should balance opposing global
and local goals. On the positive side, Grain Corporation can easily implement transnational
strategy to overcome the rivalries in the competitive market as it also helps in enhancing the
business functions and actions globally. If Grain Corporation pursues this strategy then the
chances of capture the foreign market are increased in a large extent. By using this strategy, the
firm further can identify and measure the choices and actual needs of the customers in China
(Libraries, 2018).
International strategy
In compare and contrast to a multi-domestic strategy, a global strategy is centralized and
managed by the home office and seeks to increase and enhance the international effectiveness
and efficiency. Using this strategy, goods are much more likely to be standardized than tailored
to local markets. By using this strategy, Grain Corporation can enhance and maximize sale of the
same products and services in the similar way in enormous countries. The global strategy creates
ample of growth opportunities and encourages economies of scale in the global market. Pursuing
a unique and effective global strategy reduces the risks for the company. This strategy further
helps in increasing awareness among the customers internationally. There is no need to make any
changes in the products and services while offering the products in foreign market. However, if
Grain Corporation wants to make few changes in the products then it can do easily and smoothly
(Quickmba, 2018).
Multi-domestic strategy
This strategy is suitable to beat the rivalries in the Chinese market. By using this strategy, the
organization can easily understand and evaluate the choices, wants, and preferences of the
specific country and according to this, they can produce and introduce the products in the global
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market (Hill, 2008). For the introduction of new food products in the Chinese market, Grain
Corporation needs to understand and analyze the tastes, choices and interests of the Chinese
effectively and efficiently (Hill, 2008). By initiating the multi-domestic strategy, Grain
Corporation may further modify its products and services to fulfill the needs, preferences and
choices of people in China. In this way, the organization can capture entire target audience in
such country as it can also maximize profit margin and outcomes (Bbamantra, 2018).
Entry modes to the international market
The decision of how to enter a foreign market may have a significant and vital impact on the
outcomes. Expansion into the foreign market could be attained by using various entry modes
(Hryckiewicz and Kowalewski, 2010). Some of the appropriate and inappropriate entry modes
for Grain Corporation are described below.
Appropriate entry modes
Some of the appropriate entry modes for expansion and development have been discussed below.
Foreign direct investment
It is one of the significant and empirical entry modes that can be used by Grain Corporation for
expansion and development. It is an effective and unique mode of entering foreign market
through innovative investment. Investment can be done indirectly and directly through FDI and
some other financial institutions (Canabal and White III, 2008). FDI affects investment pattern of
the economy and provides support to maximize whole development and expansion. The extent to
which FDI is permitted in a nation is related to the government rules and regulations of that
country. It might be possible by buying the share of a firm, assets and property. It is noted from
the various facts that Grain Corporation can use this entry mode for growth and expansion. It is
an easy and suitable mode of entry and further modification or change could be done at point of
time. Thus, the organization can implement foreign direct investment entry mode to maximize
revenue in the Chinese market.
Strategic alliance
Strategic alliance is a unique and dynamic entry mode to initiate business activities and
operations in foreign market. Strategic alliance is a deliberate agreement between two
organizations to their pool and utilizes their resources to attain a common set of goals, targets
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and objectives while remaining independent entities (Ripollés, Blesa and Monferrer, 2012). This
strategy is mainly used or implemented to expand and flourish the production capacity, business
and maximize market share for a product and service. Grain Corporation can use this entry mode
to minimize risks and challenges and to uplift market share in Chinese market. Alliances strategy
helps in developing and improving new and innovative technologies, resources and utilizing
brand position and market knowledge of both the organizations (Quickmba, 2018).
Inappropriate entry mode
There are ample of entry mode that not suitable for Grain Corporation, some of the inappropriate
entry modes are detailed below.
Joint venture
Joint venture entry mode can also be exercised by the company when implementing or starting
business in China. This strategy is not suitable and perfect for the company because it is costly
method and conflicts may occur in this entry mode (Lee and Lieberman, 2010). The political and
cultural stability can pose a threat and risk to successful and effective operations. There is a
conflict in management always existed in this entry mode. This entry mode is suitable for two or
more companies who want to attain common objectives and goals. It is recommended that the
company should use this entry mode for entering into the Chinese market (Mbaknol, 2018).
Franchising
Franchising is also not appropriate for Grain Corporation for initiating the business in China.
Franchising is a system or framework in which semi independent business owners pay royalty
and fees to a parent corporation to sell products and services internationally (Morschett,
Schramm-Klein and Swoboda, 2010). It is very risky entry mode and sometimes franchise may
become a biggest competitor. Along with this, wrong franchise may destroy the company’s
goodwill and image in the foreign market (Deng, 2009).
Recommendations for future strategic direction of Grain Corporation
There are ample of suggestions that help in improving brand image in near future. Some of the
recommendations have been elucidated below.
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 It is stated that Grain Corporation must use pestle analysis, SWOT analysis and porter
five forces analysis to compete rivalries and to determine future challenges, barriers and
threats in the Chinese market. By using SWOT analysis, Grain Corp. can easily evaluate
and analyze the internal strengths and weaknesses. Further it will also help to identify the
opportunities and threats of the foreign market.
 Ansoff matrix shall be derived by the company while starting or implementing business
operations in China. This strategy helps to distinguish its food products from the
competitors in the international market. Diversification strategy one of the good choices
that can be used by the firm when initiating the functions and operations in foreign
market.
 Purchasing power, income level and choices of the consumers shall be analyzed and
identified before implementing the business in china. For this purpose, a brief market
research and survey must be conducted by the company in the competitive market.
 Along with this, business level strategies must be used to satisfy the needs and
expectations of the Chinese globally. A sustainable human resource management shall be
maintained by the company to appoint people in China. Without sustainable HRM, the
company cannot conduct business activities and functions in Chinese market. It will
further help to provide training and development coaching to the workers internationally.
Conclusion
It is evaluated from the above discussion that Grain Corporation is expanding and maximizing its
profitability by exploring the business globally. Grain Corporation is a public company which
provides grain marketing and handling services to the customers across the globe. To attain
success and expand business in China, the company focuses on the various international
strategies such as transnational strategy, multi-domestic strategy and global strategy. These
strategies help in making easy to international expansion and development. Along with this,
entry modes are also essential to flourish the business in China. The company uses appropriate
entry modes like strategic alliance and foreign direct investment method.
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References
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