International Business: Export Strategy for Wesfarmers in the United States

This report discusses the export strategy of Wesfarmers, an Australian company, to enter the United States market. It covers the budget, market selection, and market positioning strategies, as well as the financial resources and staff requirements. The report highlights the potential of the US market and the company's plans to maximize profits and increase its customer base.

International business

Executive summary
In today’s business world this is important for the company to operate in the global business so
that they are able to capture the potential customers which are waiting for the products of the
company to enter into their country. The managers of the company have to decide the exporting
practice that helps them in increasing the objective of maximising the profits of the company.
The managers of Wesfarmers has identified the region where they desire to export the products
that are produced by them. This is also seen that the company wants to increase its customer base
through the process of entering into a new market. Also, the managers of the company have
critically analysed various entry modes and have also made a various analysis of the
requirements of the funds that are required by the company to plan international expansion in the
other country. While doing the analysis this is seen that company has made a budget through
which they would follow so as to enter into the new market and to analyse the market condition.
Various internal and external factors are analysed by the managers of the company which helped
them to achieve the objective of market research.

Contents
International business......................................................................................................................1
Executive summary.........................................................................................................................2
Contents...........................................................................................................................................3
Introduction......................................................................................................................................4
About the Company.........................................................................................................................5
Domestic business overview........................................................................................................5
Financial Resources.....................................................................................................................7
Marketing Budget....................................................................................................................7
Cash Flow to Fund orders.......................................................................................................7
Sustainability of export budget................................................................................................7
Staff..............................................................................................................................................8
Market Selection........................................................................................................................10
Target markets.......................................................................................................................10
Market positioning in target markets....................................................................................11
Competitor analysis...............................................................................................................11
Distribution methods.............................................................................................................12
Sales goals.............................................................................................................................12
Product.......................................................................................................................................12
Products/services for export..................................................................................................12
Changes to product/service required for export markets......................................................13
Production capacity...............................................................................................................13
Pricing Strategy.............................................................................................................................14
Market Entry..................................................................................................................................15
Promotional strategy......................................................................................................................16
Action Plan....................................................................................................................................18
Management Review and Follow Up............................................................................................19
References......................................................................................................................................20

Introduction
The international market is considered as the area which is always considered as the fantasy for
the company to capture. Every company which is working the domestic market wants to expand
its business in the international market so that they are able to capture the market place that is not
targeted by the other companies. The main aim of the company to increase business and to
perform the obligation internationally is due to the force that will help them to achieve maximum
profits (Beamish and Lupton, 2016). The company wants to enter the overseas market due to the
fact that it will help them to increase the customer base and would also help to increase the
overall profit of the firm. This also benefits the company in a manner that it allows lowering the
unit cost of the product that it produces as the amount of the product that it delivers increases.
The company is considering the plan to export the product that it offers in the domestic market to
the retail market of the United States. For exporting the product various analysis has been done
by the company which helps them to increase the profits and the turnover. This report specifies
the export report that Wesfarmers would consider to export the product into the other country
and the overseas strategy that is considered by the company gain maximum profits (Beugelsdijk,
Kostova and Roth, 2017). This report contains various budget and the financial requirements that
are required by the company to export their product to the international market. Also, the
segmentation strategies are described in this market that helps to achieve the objective of
positioning the product in the country. Also, the steps that are included analysing the competitors
of the company in the new overseas market are also considered in this report.

About the Company
Domestic business overview
Wesfarmers is the company that is formed in 1914 as a limited company.in 1925, it organised the
first public radio station in Western Australia. In 1942's its business incorporated with wheat and
general merchants and country dispensation for commonwealth oil refineries ltd. Skin, livestock
and wool, grain and fruits exporters obtain agent for wheat pool called Westralian farmers
limited, it had establishments in different areas within the Perth central business district.in 1950
Wes farmers acquired Ashburton transport which made decimation the following years and they
also acquired its major combatant Gascoyne trading and merge the activities of these two
companies to serve the northwest area of western Australian (Brannen, Piekkari and Tietze,
2017). A company with wool and mail they transfer bananas from Carnarvon to Perth and give
back to stores and mail from Perth to the realm with huge landing places, they formerly having
no road entrance. In Australian, it is the largest company by profit and it considers as the largest
private employer due to its large no of employees that is 220000 approximately. In 2016
financial year its profit was au$65.98 billion and overtaking the Woolworth and BHP. It is the
end of co-operative ownership (Cano-Kollmann and et. Al., 2016). In 2016, it introduced its
business as a department store into a single division named store and each brand continue to
operate its process. As like Kmart is a discount department store in Australia and New Zealand,
it provides automotive service through these stores, across 228 Kmart stores and 259 Kmart tyre
and auto service centres. Second is the target department store as the retailer store in Australia it
has 301 stores and more than 24000 staff employees. In August 2015 Wes farmers, declared for
the congregation of this three industrial business, chemical, energy and fertilizers resources and
industrial and safety into a single new industry.
Factors that are leads to the success of Wes farmers:-
 Rising of success and growth beginning- it has a submissive origination in 1915, it has
emerged as the largest listed company in Australian. For expanding its business through
any kinds of industries and also casing department stores, supermarkets, office supplies
and coal mining insurance, chemical and safety products. It has fascinated the
international market with its top class strategy and schemes for constant development. It
has become a prototype around the world through its sustained growth and evolution.

 Introduced best in supply and chain management:- exposition of its ingenious supply
chain Wes farmers initiate the Blackwood section of its activities to stand as unique
source of supply for all the products and services that are related to inventory. It became
the largest Australian trader for all industries, safety workplace. In present time it serves
all the business needs, technology, size and process. The management team of Wes
farmers has continuously excelled in its working and decisions that are supportive of their
long term business.

Financial Resources
Marketing Budget
The marketing budget of the company is considered to be the main budget that helps in analysing
the estimated amount of cost that would be required by the company to complete the marketing
of the products that it is going to sell (Child and et. Al., 2017). Hence for Wesfarmers to enter
into the market where they require a huge marketing budget which is determined below:
Particular Cost Amount
Overseas Market Visit $50,000
Advertisement $300,000
Promotion materials $150,000
Listing and regulation fees $80,000
Training for overseas employees of the company $25,000
Cash Flow to Fund orders
This is seen that company would be required a huge amount of cash flow before entering into the
market. As the quantity of the product that is required by the company is huge and the products
would not get sold at once. Hence for this, it is required by the company to manage the working
capital at a good amount so that they are able to achieve the objective of maximising the sales of
the company (Cravino and Levchenko, 2017). The orders that are generated for the products of
the company in the initial year is not so high hence does not requires high working capital. Also,
this is seen that the company would sometimes require a high amount of cash flow due to the
large potential orders. The company would manage the funds in this by using the domestic cash
flow.
Sustainability of export budget
The company would be able to sustain the export budget and would be able to cope up with the
expenditure as this is seen from the analysis that the products that the company would sell is in
huge demand and the market is aware of the brand. Hence this is seen that company would be
able to withstand the additional expenditure that happens in the export business of the company
(Cuervo-Cazurra, 2016). While this is also analysed that company would come in the profit

within 8 months of entry in the market and would be able to generate sustainability in the United
States market.
Staff
Every business organisation to be successful in the market requires to have a skilled and
knowledgeable staff which will help in contributing to the company’s overall objective of
maximising the sales. This is required so that they are able to understand the demand of the
customers and are able to provide a particular solution to them. They are the blood of the
organisation which are required to perform the function of the company. As the company is
planning to export and expand its business in the outside world hence this is required by the
company to have best employees who will help in achieving the objective of maximising their
goals (Cuervo-Cazurra and et. Al., 2016). In the present scenario, the company is having good
and the experienced staff which is able to understand the performance of the company and can
help in achieving the objective of the company. While this can also be seen that the management
of the company is very experienced as they are already managing overseas market hence they
will not face any issue in achieving the objective of maximising the profits and the expansion of
the business in the United States.
Hence for expanding the business company would require to have at least 7 directors which will
operate the functions of the different department in the United States. This is seen that the
minimum amount of experience that would be required for each director is 5 years through
which they would be considered (Cumming and Zahra, 2016). The company would require to
have a warehouse through which they will transport the product to the respective location and for
managing this they would require to have a various number of employees which would help in
nurturing the performance of the company. While this is seen that company is new in the market
of United States and hence they require to have a minimum of 1000 employees who will manage
the marketing of the company as they are hitting it hard to make the expansion in this type of
market (Di Giovanni, Levchenko and Mejean, 2018). The company would also require to have at
least a 200 sales executive who will operate the store of the company and would be in direct
contact with the customers of the company. Hence for achieving the objective maximising the
sales and to achieve the objective of exporting the business in United Stated Company would
require to have a good and skilled staff.

Market Selection
Target markets
The company is already working in various market in the world including the United Kingdom,
New Zealand, India etc. This is seen that the company has achieved the objective of capturing
the east, middle and the southern continent of the world. Now the company desires to expand its
reach to the western part as this is seen that it is the fast-growing market and has a big potential
to cover the objective of maximising the sales of the company. Hence this is seen that the
company has chosen to have the United States as the target market for exporting its products
(Doh and et. Al., 2017). The company desires to increase the production through this market as
this is seen that this is the world renounced market and the customer base for the product they
deal in is huge. This is seen that the United States is a well-established distributor of the products
for all types of product. This is also seen that the retail industry of the United States helps in
fostering strong business growth with the help of which they would be able to achieve a better
growth option. Total sales in the United States is nearly about 6 trillion dollars. The customer
base of the country is very good and it is considered to be the world's most retail service and the
product using country. This is also seen that the industry in the United States is expected to
increase by the around 3-4 per cent which is considered to be one of the big amounts for the
company to achieve the objective of maximising the sales. Also with the support of E-commerce,
the industry expected to increase by 7-8 per cent which is considered to be the greatest figure for
any company to enter into the retail market of the United States. The import in the US in the
current year was desired to be of around $3.1 Trillion of which the consumer goods amounted to
the around $648 billion which is considered to be of one of the greatest amount
(Hutzschenreuter, Kleindienst and Lange, 2016). As the company is already working with
various partners and the company is having the financial advantage hence this would not be
difficult for the company to achieve the objective maximising the sales. It is also considered that
the company is making the use of various exporting channel which would help them to achieve
the objective of maximising the sales.

Market positioning in target markets
The company is expecting to increase its production in the United States and hence they have
considered positioning their product this market through the process of analysing the market
positioning strategies. They would be using the strategy of the differentiation of their products
and would also consider the advantage of the cost leader as the product that they would offer to
the customers would be of lower cost as compared with the other products already prevailing in
the market (Kolk, 2016). The company would also consider the character of the customer benefit
as one of the processes that will help them to achieve the objective of maximising the sales of the
company.
The company would use the strategy to target the customers by providing them with the lowest
price good at the retail store that they will operate. The company would also consider proving the
customers with the different products that are helpful to the users and are also sustainable. As the
company would be providing them with the premium and different products hence they would be
able to generate maximum profits from the desired objectiveAs this is seen that it is a new
market for the company and hence requires to have an extended strategy to market the product in
the country. The company would require to have a greater market positioning strategy that would
help them to achieve the objective of maximising the sales and profits for the company.
Competitor analysis
This is considered to be one of the main parts of the company to analyse the factors that are
related to the company market situation. This is considered to be critical of the company's
marketing plan. The competitors of the company are having a high influence on the consumers as
they are serving the customers for long years (López‐Duarte and et. Al., 2016). It is considered
that the company requires to have a good performance indicator and have to process the
strategies that would help in achieving the objective of the company. This is seen that the main
competitor of the company in this market is Dow chemicals which are also providing the service
in the industry of conglomerate products. The company is functioning in the country since 1879
and has a market capitalization of around $59Bn which is a huge capital. Hence the manager of
the company has to form various policies which would help them to achieve the objective of
maximising the sales and the overruling the competitors in the market. The company has to

provide the best in class service and the products to compete with the rivals as they are big firms
which are having control over the products of the company.
Distribution methods
The distribution method is considered as one of the main methods that are required by the
company to analyse how the products would reach its customers and what are the various ways
which would help them to achieve the objective of maximising the sales. This is considered to be
part of the downstream process of the company (Picciotto and Mayne, 2016). It is seen that the
global supply chain method is considered to be a complex, diverse and dynamic method that is
required by the company to follow. Hence for making the product available to the consumers of
the country the company would open the retails stores for their product and would also consider
the channel of the wholesale supply so that their products are being more promoted in the
market. The company would make a supply chain process where they will provide the products
directly to their retail outlets. The company will use the traditional method where they will use
wholesalers and the retailers as the medium to increase the productivity of the company. Also,
the company would use the E-commerce as a tool that will help to increase the sales of the
company.
Sales goals
The sales goals of the company are considered to be one of the main objective of the company to
consider. This is the target that the company has to obtain so as to earn the minimum profit for
the year. As this is seen that the company is entering into the market where they have to perform
various tools and strategies hence this is seen that the sales target for the company in the current
year is around $10Mn as the company (Picciotto, 2017). The time for this sales figure to achieve
is around 6 months. This is considered to be the minimum sales figure that is required by the
company to achieve the objective of continuing sales.
Product
Products/services for export
The products that the company would offer to the customers are the chemicals, Energy and the
fertilizers which are used for the agriculture purpose of the company. The company would also

consider having a departmental store that would use to target the retail customers through the
products that include the apparels and the general merchandise product at a very low cost by the
company (Stahl and Tung, 2015). The company would price it lower than what it is offered by
other competitors. This would be considered that the company would distinguish their product
through the customer base that customer of the company can desire from the products.
Changes to product/service required for export markets
There would be little change that would be required to be performed by the company to export
the product to the desired market. As the current product of the company are being made
according to the eastern market and this is seen that the chemical and the fertilizers that they are
selling to the customer are according to the need of the soil of the eastern countries. Hence for
the western country, they have to change the method of producing the product and has to change
the ingredients in the product that they are selling. Also, this is seen that the fashion in the
Western market is different from that of the Eastern market hence they have to adapt the product
accordingly. There are little changes that the company would consider to change before
exporting the product to the United States.
Production capacity
The production capacity of the company and the plant of the company is very high. The
company is having a spare production capacity that it can utilise to sell the product to the outside
market. As the company is having low demand for their products in the rainy season. Hence in
this season, they are having plenty of capacity spare to produce their product. This is seen that in
the summer the need for the fertilizers increase and hence the company has to increase the
production. By analysing the industry this has been considered that the Customers in the United
States desires to have more fertilizers in the season of summer (Stahl and et. Al., 2016). So the
company has to increase its production capacity this year. While this is seen that the apparel
department of the company is in maximum demand in the winter season hence they have to
increase this production capacity in the winter season of the country.

Pricing Strategy
The company is considering to have a pricing strategy where they desire to achieve the objective
of maximising the goals. The company has taken feedback from the customers and analysed
what is the desire of the customer to purchase the products that are being promoted in the current
market situation. Hence the conclusion that is considered by the company from this is that they
are desiring to take the approach of low-cost products in the market which will fulfil the
customer desires and the objectives (Strange and Zucchella, 2017). This is also seen that as the
company is exporting the product there would be the difference in the currency and the
fluctuation would be there in the currency of the country which the company has to consider
before considering the price of the product. Also, the company is regularly analysing the
competitor price drop as they have to make the plan if the price of the competitor drop then they
will change their price as they are already working at very low margins.

Market Entry
The company is considering various ways through which they will enter into the market of the
United States. This is seen that company is making a warehouse in the country where they would
keep all of their products directly exported from the domestic market. The company is also
considering to open a retail store or a warehouse through which they will enable to have best in
class outlets that will offer the products under one roof (Vagts and et. Al., 2015). The company
would not follow the structure that they offer in the domestic market. This is also seen that the
company is considering to have a distributor so that they are able to achieve the objective of
maximising the turnover. While the company would also set managing to headquarter here
through which they will be able to achieve the objective of managing the distribution channel of
the company.

Promotional strategy
Promotion is an effort by retailers to notify, influence or prompt to customers to affect their
suggestion or obtain their retaliation. Many firms using different strategies for their stimulation
because they all are having different aims and perspective. The goal is to obtain a response from
customers and peoples or industries of the chosen market (Van Hoorn and Maseland, 2016).
There are a company Wes farmers that is the well profitable and largest firm in Australian and it
also has its promotional strategies in us, for promoting its products and many services it has also
apply many promotional strategies in us. Wesfarmers is a limited company and wanted to
promote itself in us by many strategies that are as given below:-
 Creating apprehension in market and industry: firms and companies go out because
customers and people in the market don't know about their products or existence in
market and customers don't having an idea about what they serve to people. Here Wes
farmers also have a strategy that it will promote by advertisement on social media,
through radio, newspapers and television, flyers and by many other ways that will help it
for build exposure in the market of us. It also uses slogan to generate its brand value in
the market. That slogan attracts many customers and industries towards its products and
services
 Attract customers to seek the products and services: - Wes farmers used their promotional
strategies in us, market to attract the customers to try their products and services and also
obtain those customers who are nonusers of that product (Zander, McDougall-Covin and
Rose, 2015.). Follow this type of strategy company attract the people towards their
products, it can follow to distribute free samples, coupons and trial size are also usual
manoeuvres to induce the people to try products. It can provide many other related
product and services to people to obtain their interest in buying these type of products.
 Available information in the market:- Wes farmers have also introduced itself in us
market to obtains potentiality and for this, it has to provides all information about its
existence and products, services in the market among customers. For Wes farmers, it is
very important to establish in us market that customers are well known about its products
and services because until people are not having knowledge about any new product and
its benefits, services that help them, they will not buy its products. Thus, a

communicative way of launching any business or its products is very helpful for Wes
farmers limited to introduce itself in us (Vernon, 2017).

Action Plan
Task BY WHO When
Market analysis Manager of the company and
the marketing director
Within 1 Month
Customer demand and
requirements
Marketing directors and the
subordinate staff of the
company.
Within 20 Days
Production requirement Production manager Within a Week
Supply chain Management Supply chain manager Within 15 Days
Legal compliance of export Legal manager of the
company
Within 7 days
Infrastructure for selling Manager of the company Within 3 months
Sales promotion and
advertisement
Marketing and the selling
manager
Within 20 Days

Management Review and Follow Up
The timing would be decided so as to review the action plan that is made by the managers of the
company. This is seen that managers would analyse regularly the action plan made by the
company to perform the obligation and to review the plan on time. The review would be taken on
the particular time which includes:
Task Timing for Review
Market analysis Within every 5 days by the managers and the
directors.
Customer demand and requirements Every 3 days by the Marketing managers
Production requirement Every day by the chief production manager
Supply chain Management Every 5 days by the directors
Legal compliance of export Every 2 Days by the chief legal manager
Infrastructure for selling Every 15 days by the directors of the company
Sales promotion and advertisement By the chief marketing and sales manager
within every 5 days

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