Australian Food Export Competitiveness

This assignment analyzes the price competitiveness of Australian food products exported to the UK market. It compares the prices of specific food items (eggs, ground coffee, white potato) in both countries, utilizing exchange rates to convert prices into a common currency (GBP). The analysis reveals that most Australian food products are not significantly cheaper than their UK counterparts, suggesting challenges for Australian exports in this market.

Running head: ENTRY STRATEGY
ENTRY STRATEGY
Name of the Student
Name of the University
Author Note

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EXECUTIVE SUMMARY
This report deals with the international marketing strategy that is considered by EU for it can
enter the United Kingdom market. The product will be food items as it is seen that it is
mostly imported from the European Union countries at a higher price. The establishment of
the companies in European Unions will help in buying the products at a cheaper price by the
consumers. This will help the company in expanding its reach on a global scale and increase
its profits. The companies in EU are required to evaluate the attractiveness of the market and
select the best entry mode that it can help in increasing revenues.

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Table of Contents
Step 1..........................................................................................................................................3
Step 2......................................................................................................................................5
Step 4......................................................................................................................................5
Step 5......................................................................................................................................6
Step 6..........................................................................................................................................7
Market research strategy........................................................................................................7
Step 7:.........................................................................................................................................8

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Step 1
The list of European Union countries are:
Belgium Denmark Bulgaria Croatia
Republic of Cyprus Czech Republic Australia Estonia
Finland Hungary France Greece
Germany Ireland Italy Latvia
Lithuania Luxembourg Malta Netherlands
Spain Portugal Romania Slovakia
Slovenia Poland Sweden and The United Kingdom
There are large numbers of products that are being exported every year from
European Union to United Kingdom. The highest amounts of products that are being
exported in the United Kingdom form European Union are the food products. The major food
and vegetable products that are exported in UK are potatoes, meat, eggs and coffee. Below is
a small list of food and vegetable products that are exported in the markets of UK;
i) Spain exports potato at a value of 13991000 USD
ii) France exports meat at a value of 3823000 USD
iii) Netherlands exports eggs at a value of 4024000 USD
iv) Germany exports coffee at a value of 8440000 USD.
Step 2
There are details of the retail price of the products, which are available in the London
Tesco market. The products are sold in different retail prices in the Tesco market. There is a

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huge difference in the price margins of the products in both the places. Given below are few
examples of the retail price of the products.
The pack of 12 eggs in Tesco supermarket costs £1.75
The 227 grams Italian blended ground coffee costs £2.29 at a Tesco supermarket.
The Beef Lean Steak, which contains 5 percent fat and is, packed in 500 grams pack costs
£4.00
A 2.5 kilogram Redmere Farms White potato costs £1.29
Step 3
On converting the values to AUD it can be seen as follows:
Meat will cost 6.8 AUD
Coffee will cost 3.893 AUD
Potato costs 2.193 AUD
Eggs will cost 2.975 AUD
Step 4
The details of the comparison of the price of the products in AUD currency has been
provided below (Abs.gov.au. 2017). A comparison of retail prices has been done between UK
and EU. It contains a detailed comparison with the Australian price.
The price of potato is AUD 4.90 for a pack of 1 kilogram
The price of meat is AUD 6.50 for 500 grams pack
The price of eggs is AUD 6.00 for a pack of 12

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The price of coffee is AUD 4.00 for 100 grams.
Step 5
(Source: www.afgc.org.au/wp-content/uploads/AFGC_State-of-the-Industry-2016, 2017)
(Source: Abs.gov.au, 2017)
The above figure contains the list of Australian processed food manufacturers. It also
contains the details of the list of the agricultural products that the Australia produces.

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Step 6
Market research strategy
The Woolworths Company was established in the year 1924 at the Imperial Arcade in
Sydney by Percy Christmas. The company sold large amount of products and was able to
open the chain of stores by the year 1927 in Brisbane. The company also opened the first
foreign brand in New Zealand in the year 1929 and by the year 1930, the company was able
to establish itself in variable parts in Australia. By 1959, the company came up with variety
of products in the Australian markets. The products that are offered by the company are given
at low and competitive prices, which make it difficult for other brands to survive in the
market. The company provides a wide range of products to the customers in reasonable price
(Akbar and Ahsan 2014).
The company has concentrated on the distribution of the potato in the markets of UK.
The company has planned the entry strategy of potatoes in a higher rate in the market of UK
(Chen and Miller 2015). The company has targeted most of the customers, as this particular
vegetable serves the purpose of most of the households that are present in Australia.
Moreover, the restaurants in the country also have a huge demand of this product, as most of
the dishes that are made by the restaurants require the product at some point of time (Barbara
et al. 2017).
The major supplier of potato in the Australian market has not been able to meet up to
the expectation of the customers, which has led to the loss of the company. The strategy that
has been taken up the company has helped them in generating increasing revenues for the
company. It is a highly demanded product and it is a daily requirement of the customers
therefore it has been able to increase the revenue of the product as it has been able to meet the
demand and needs of the customers (Boateng et al. 2014). The Woolworths Company will be

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able to market its product in a better manner in the UK market, which will help in increasing
the profits of the company. The use of the better technologies and the facilities, which is
already present in the company, acts as a positive aspect in the company. The increase in the
GDP of the country gives a hint that the buying condition of the customers is good which will
increase the revenue of the company. The vegetables if sold at a cheaper rate will increase the
sale of the products at an increasing pace (Bogomolova et al. 2015). This is the most striking
strategy of the company regarding the entry of the product in the markets of UK.
Step 7:
In order to find out whether Australian food products are competitive in UK market,
the price of the selected products in UK in EURO are divided by the price of the Australian
product after conduction of the conversion into GBP (Buckley and Ghauri 2015). We are
required to find out GBP/EURO
The information of the price levels and the conversion, calculations are presented in
the following table.
EU Products in UK Eggs (per
Dozen)
Ground Coffee (100
gm)
White Potato
(per Kg)
Beef Lean Steak
(500 gm)
Price in UK (in GBP) 1.75 1 0.516 4
Conversion of Price to
Euro
1.925 1.1 0.5676 4.4
Price in Australia (in
AUD)
6 4 4.9 6.5
Conversion of Price to
GBP
3.53 2.35 2.88 3.82
GBP/EURO 0.545325779 0.468085106 0.197083333 1.151832461
From the above table it can be concluded that for eggs the exchange rate should be

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GBP 1 = EURO 0.54
For ground coffee the exchange rate should be
GBP 1 = EURO 0.46
For white potato the exchange rate should be
GBP 1 = EURO 0.19
For beef lean steak the exchange rate should be
GBP 1 = EURO 1.51
For Australian food products to be more feasible in the UK market we require to find
out the GBP/AUD. Here we divide price of Australian products in AUD by the price of UK
products in GBP. The calculations are done below:
EU Products in UK Eggs (per Dozen) Ground Coffe (100 gm) White Potato
(per Kg)
Beef Lean Steak
(500 gm)
Price in UK (in GBP) 1.75 1 0.516 4
Price in Australia (in
AUD)
6 4 4.9 6.5
Conversion of Price to
GBP
3.53 2.35 2.88 3.82
GBP/AUD 3.428571429 4 9.496124031 1.625
The exchange rate for egg should be:

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GBP 1 = AUD 3.42
The exchange rate for ground coffee should be:
GBP 1 = AUD 4
The exchange rate for white potato should be:
GBP 1 = AUD 9.49
The exchange rate for white potato should be:
GBP 1 = AUD 1.625
It can be seen from the table all of the Australian food products except beef lean steak
are not at all cheaper rather greater than the prices prevailing in UK market this indicate the
food products exported by Australia in UK would not be competitive and feasible.

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REFERENCES
Abs.gov.au. (2017). 7503.0 - Value of Agricultural Commodities Produced, Australia, 2015-
16. [online] Available at: http://www.abs.gov.au/ausstats/abs@.nsf/mf/7503.0 [Accessed 13
Sep. 2017].
Akbar, S. and Ahsan, K., 2014. Analysis of corporate social disclosure practices of Australian
retail firms. International Journal of Managerial and Financial Accounting, 6(4), pp.375-
396.
Barbara, C., Cortis, D., Perotti, R., Sammut, C. and Vella, A., 2017. The European Insurance
Industry: A PEST analysis. International Journal of Financial Studies, 5(2), p.14.
Belch, G.E., Belch, M.A., Kerr, G.F. and Powell, I., 2014. Advertising: An integrated
marketing communication perspective. McGraw-Hill Education.
Boateng, A., Hua, X., Uddin, M. and Du, M., 2014. Home country macroeconomic factors on
outward cross-border mergers and acquisitions: Evidence from the UK. Research in
International Business and Finance, 30, pp.202-216.
Bogomolova, S., Dunn, S., Trinh, G., Taylor, J. and Volpe, R.J., 2015. Price promotion
landscape in the US and UK: Depicting retail practice to inform future research
agenda. Journal of Retailing and Consumer Services, 25, pp.1-11.
Buckley, P.J. and Ghauri, P.N. eds., 2015. International business strategy: theory and
practice. Routledge.
Chen, M.J. and Miller, D., 2015. Reconceptualizing competitive dynamics: A
multidimensional framework. Strategic Management Journal, 36(5), pp.758-775.

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