International Expansion Opportunities for Australian Agricultural Company in Brazilian Market

Running Head: STRATEGIC MANAGEMENT 1
Strategic Management

STRATEGIC MANAGEMENT 2
Executive Summary
Agrifood business industry is one of the most growing businesses in Australia and it is one of
biggest contributor to country’s economy. There are various organizations which are supporting
this industry to grow. Australian Agricultural Company (AAC) is among them that is operating
its business as largest agro-food producer and exporter in Australia. This report purposes to
analyze the international opportunities while company is planning to expand its business in
Brazilian market. This report includes the international strategies which AAC can use in
Brazilian market. The company will use three international strategies i.e. transnational strategy,
multi-domestic and global strategy. There is the discussion about the market entry modes which
company will use while going to Brazilian market. In the last section, some recommendations are
provided for future strategic directions.

STRATEGIC MANAGEMENT 3
Table of Contents
Introduction.................................................................................................................................................4
Australian Food Agribusiness Sector...........................................................................................................4
International Opportunities for Australian Agricultural Company Limited..................................................5
Increased Consumption of beef products in Brazil..................................................................................5
Technology Advancement.......................................................................................................................6
Growth and Development Opportunities................................................................................................6
International Strategies...............................................................................................................................6
Multi-domestic Strategy..........................................................................................................................7
Transnational Strategy.............................................................................................................................7
Global Strategy........................................................................................................................................7
Modes of Entry............................................................................................................................................8
Most Appropriate modes........................................................................................................................8
Inappropriate Modes...............................................................................................................................8
Recommendations for Future Strategic Direction.......................................................................................9
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

STRATEGIC MANAGEMENT 4
Introduction
Business expansion is very important for the growth of every organization that wants to stay
competitive in developing market. Without this, an organization cannot increase its brand
presence in global business market. In this process, the organizations need to make most
appropriate decisions on the selection of perspective market and market entry modes (Robson,
2015). The major objective of this report is to discuss about international expansion opportunities
for the chosen organization i.e. Australian Agricultural Company.
Australian Agricultural Company (AAC) is an Australia based company which owns and runs
the feedlots and farms covering around 7 million hectares of land in Queensland and Northern,
approximately 1% of Australia’s land mass (Bloomberg, 2017). The company is operating its
business in Australia successfully so now it is planning to expand its business in another
international market i.e. Brazil. This report focuses on the international business opportunities
which the chosen organization can have in Brazilian market. It outlines the international
strategies which can be adopted by this company when expanding its business in foreign market.
Moreover, there is the discussion about both most suitable and inappropriate market entry modes
to the foreign market. At the end, recommendations are provided for the future strategic
directions of the Australian Agricultural Company.
Australian Food Agribusiness Sector
Australia is one of the largest agriculture products producers and exporters across the world.
Agri-business sector in Australia covers a large market share in this country. It can be stated that
this nation produces more than $155 bn per year from the food agri-business and related sectors
and it covers 12 percent of Australian GDP. In this country, farmers have 136,000 farms which
include 60% of country’s land. There is a mixture of dry land and irrigation agriculture
(Australian Trade and Investment Commission, 2018). Among all segments in agriculture sector,
beef segment is one of the chief sectors which Australian Agricultural Company belongs to.
Australia is among top three largest beef exporters all over the universe. Australian food-focused
agribusiness sector has a significant place in Australian economy. This sector has a sound
financial record in attracting global investment all over the supply chain of agricultural products.
It is a $256 bn dollar sector and it is growing very fast. As a basis of Australian industry,