Opportunities for Agribusiness in the International Market

This document discusses the opportunities for agribusiness in the international market and provides strategies for expanding business. It explores the agribusiness sector in Australia and its significant contribution to the economy. The document also covers international strategies and entry modes for agribusiness.

Running head: STRATEGIC MANAGEMENT
Strategic Management
.

STRATEGIC MANAGEMENT 2
Contents
Introduction.................................................................................................................................................3
Agribusiness in Australia..............................................................................................................................3
International Opportunities.........................................................................................................................4
International Strategies...............................................................................................................................4
Entry Mode..................................................................................................................................................6
Recommendations for future strategic direction:-......................................................................................7
Conclusion...................................................................................................................................................7
References...................................................................................................................................................9

STRATEGIC MANAGEMENT 3
Introduction
One of the leading organizations Fonterra deal with the agro related products in the global
market. The company is New Zealand based that make them competitive in the market. The
company was established in the year 2001 and now become of the largest dairy companies as
well as New Zealand dairy bureau cooperate. It has annual sale of $8 billion, it is New Zealand’s
largest companies. It is considered as one of the primary exporters of the dairy products as well
as liable for more than third of worldwide dairy trade. The company has extensive been
identified for producing excellent ice cream as well as other dairy products in today’s market.
The dairy industry also begins to integrate. The dairy industry in New Zealand began to
implement the market as well as the diversification of the product. Therefore, it can be the great
opportunity for the agro based companies to expand their business in international market.
In the following part there will be detailed analysis of the opportunities involved in the
international market and the way company can grab that opportunities.
Agribusiness in Australia
Food and agriculture are the fundamental to human survival. It is one of the primary sector in
which maximum number of people find their source of earnining. It was the birth of the
agriculture as well as farming that laid down the basis for the human civilization. The food and
Agribusiness sector play a vital role in the Australian economy as well as it make a significant
contribution to the economies of the regional areas through the employment, business and
service opportunities. The agribusiness in Australia has as well as will be one of the major pillars
for the country. The retailers, traders as well as processors have all seen the changes in such
market (Molina, Gómez, González-Díaz, & Esteban, 2015). The investors that may not normally
look towards such sector now see it as a viable industry to partner with. The current fragmented
approach of Australia enables the industry to be coherent association, that help the company to
command respect for the objective as well as evidence based platforms with the positions. The
sector has marked an outstanding performance in the farm production by 27.6% over the years.
In the last quarter of the year 2016, the agriculture has accounted 10 time of its average
contribution to the economy of Australia. The growth of the country is majorly depends on the
agro based sector (Newsome & Sheridan, 2018). Such sector helps to maintain a standard growth

STRATEGIC MANAGEMENT 4
rate for the economy. Depending on the agriculture the country successfully maintained a
positive growth rate. The current fragment approach of the Australia to agriculture as well as
agribusiness opportunities will lead to massive financial, cultural as well as emotional los that is
required for the government of the country to focus on it (Surdu, Mellahi, & Glaister, 2019)..
International Opportunities
As thinking in the minds and with the thoughts of the organisation named as Agribusiness which
has to expand its business of selling the agricultural produce and products to different countries
or say in the particular way to expand business line up to the new environment, country, politics,
etc. which in the form is New Zealand. There are loads of international opportunities for the
dairy products in the international market. Can be listed as:-
 Viability of cattle food and cattle in the place where the temperatures are low.
 Production increment in the foreign land.
 Economic growth
 Revenue increment
 National interests build up in the organisation.
 Political support from the government (Neubert, 2017).
International Strategies
As an organisation different strategies can be building up and thought upon by the firm in the
strategy making up. The strategy development and making is a very vital process for the
organisation as a whole because a stone unturned can lead to devastating losses in the home build
up. Strategy is being made before starting up of any project in any field of any business because
if the core or say the basic knowledge and data captured by the team are not being channelized
by the organisation as a whole team will lead to confusion and bad thoughts in the on-going
process of business start-up (Freel, & Robson, 2017). Any strategy wrongly made will also have
a devastating impact on the actual running of business which will question the profitability in
future and in present scenario also. The different Strategies which can be adopted by the
Agribusiness in expansion of its business on the international level are being explained below:- MULTI DOMESTIC

STRATEGIC MANAGEMENT 5
According to this strategy if a business say Agribusiness has to establish itself in the foreign
market has to first thought about the actual demand, needs, patterns of buying, prospective
consumer base, etc. to get the work started (Purves, Niblock, & Sloan, 2015). Actually first of
all the organisation has to first thought about the actual consumer base of their product in the
foreign market will there product be acceptable in the public demand or it will act as an stranger
in the lions cave and will come to an end. Proper investment should be made in the path of
establishing the actual presence in the foreign market so that the consumer get to know about
them and can get convinced to shift their regular preference to the new one in the future time and
there purchasing pattern should be judged in first phase of the actual establishment of their
product line in the foreign market (Clune, 2019). . Companies should get there offers, discounts,
reposition modified time to time as the need of the foreign prospective buyer changes because it
will be very hard for him to accept a product from the foreign land and surface. Cultural traits,
traditions of their culture should be learned to get into them. Company should set up there
subsidiary headquarters in the foreign country to get the faith of the foreign people so the
services and support to the consumer can be easily transferrable. This kind of strategy is more
often adopted by the company’s business offering food, beverages. So pre-study is must (Singla,
Ahuja, & Sethi, 2018).
 GLOBAL STRATEGY
In a pattern or say an initiative taken up the firm who wants to expand its business or say wants
to increase its reach and revenue at the same time or say the customer base or strength in the
mere future go global. It means that going beyond the territory of your geographical area or
entering into a foreign territory in the end. In this approach the organisation work on the
neutralisation or say putting down the actual product line to the new product and getting there
cost down and reach of the new product in the very easy way. Here the globalisation is the main
thought in the mind of the firm as it has to expand its term and reach only without thinking about
anything else in the matter of fact. Here the target is only the international audience how they can
be reach and touch down for the expansion phase. Here the tendency is to maintain the central
office in the country of origin and completing dozens of operations in international market
(Mathews, Bianchi, Perks, Healy, & Wickramasekera, 2016).

STRATEGIC MANAGEMENT 6
 TRANSNATIONAL
This kind of strategy is such a mixture of both the multi-domestic and global strategies. Here in
this strategy the company or the organisation keeps its headquarters in the country of its origin
also where the specific works are being compiled from all around the world and it also allows a
subsidiary or say a sub headquarters to be developed in the foreign country and continue its
operations very smoothly with maintaining the coordination with the actual central headquarters
reporting the domestic reports so any conclusions can be carried out. The decision making
process regarding any of the situation remains in the hands of the respective places of the
organisation no extra permission is being required the limit of the decision taking is being define
by the central organisation so that no confusion is being put up, research and development
departments work on how the consumer is being responsive and whatever it requires for him to
get into the product of the firm (Mehlhorn, Miles, Bonney, & Tewari, 2017).. The company
adopting such a strategy has to be very clear about the management work or say the strategies or
work actions utilised for achieving the positive replies or say the results in the economies of
scale and increased efficiency. Costs are being driven out by the foreign people or say the
investors which are putting down their money in the firm. This kind of strategy is very different
from other because here whatever has to be done is by you only as the pressure to reduce the
actual costs in making of the product is driven out by foreign legal advisors or the people in the
foreign market so that the cost can be maintained by hiring new employees, buying offices or say
renting them in the future which will be a very useful thought. It is a more complex and difficult
strategy to be developed and perform by the organisation as the revenue and cost are to be
maintained by the same party (Watson, Weaven, Perkins, Sardana & Palmatier, 2018).
Entry Mode
The most appropriate way to enter the international market will be by FRANCHISING YOUR
BRAND under this Agribusiness has to develop a brand of the agriculture produce which will be
launched in the market, allow business owners to open branches of the product, getting profits
and revenues sometimes. The main thing to be some here is put out the business plan in the
targeted market, find out the actual traders who can trade in the right way for your business and
get the deal done and go for the work performance (Reynolds, 2016). The bad thing in this is that
it is always a compromise in the end (Vaughan, 2016).

STRATEGIC MANAGEMENT 7
The most inappropriate way to enter is partnering up as you can’t partner any business firm in
the foreign market as they will not let you enter in their business place as the agriculture produce
will be different of different regions and profits will not be shared by them (Ghauri, Wang, Elg,
& Rosendo-Ríos, 2016).
Recommendations for future strategic direction:-
 Culture is the main attribute to think upon you should be culturally strong and into the
same cultural patterns and beliefs of the international or say foreign market consumer.
They will accept you understand you, respect you, trust you only if they feel that they
are in proper sink with organisation culturally.
 Legally you should be strong and effective in the legal frame work of the foreign land.
All barriers has to be worked upon whatever the legal formalities are conducted, the
rules, laws, ethics to be followed in doing business in the foreign land has to be
concluded with strong base to fight with any odds and cons.
 Government in the foreign state should be in full faith for your business activities to
perform and you will give them the actual result in the form of good revenue and
exposure to global market. Currency exchange rates should be watched upon correctly,
access to the needful resources and raw materials in the correct form, communication
and transportations problems to be solved in the regular marks, the government should
assist in the development programmes for the organisations also, affordable loans and
capitals to be provided in good form with keeping in minds of the immigration and
employment laws.
Conclusion
From the above analysis it can be concluded that agro based industry is one of the primary
sectors that grow in the market effectively. One of the leading companies Fonterra has also
enjoyed competitive advantage in New Zealand. The company has covered whole market of New
Zealand effectively. They can also expand their business in Australia as agro based is one of the
growing sector in Australia that can provide new opportunity to the company. The company can

STRATEGIC MANAGEMENT 8
adopt various marketing strategies to target their consumers as well as they can expand their
business through franchise and other modes of entry to achieve great success in the market.

STRATEGIC MANAGEMENT 9
References
Clune, T. (2019). Conceptualising Sustainable Development of Agribusiness in Australia (No.
2186-2019-1370).
Freel, M., & Robson, P. J. (2017). Appropriation strategies and open innovation in
SMEs. International Small Business Journal, 35(5), 578-596.
Ghauri, P., Wang, F., Elg, U., & Rosendo-Ríos, V. (2016). Market driving strategies: Beyond
localization. Journal of Business Research, 69(12), 5682-5693.
Mathews, S., Bianchi, C., Perks, K. J., Healy, M., & Wickramasekera, R. (2016). Internet
marketing capabilities and international market growth. International Business
Review, 25(4), 820-830.
Molina, A., Gómez, M., González-Díaz, B., & Esteban, Á. (2015). Market segmentation in wine
tourism: strategies for wineries and destinations in Spain. Journal of wine
research, 26(3), 192-224.
Neubert, M. (2017). International pricing strategies for born-global firms. Central European
Business Review, 6(3), 41-50.
Newsome, L., & Sheridan, A. (2018). Taking Stock: Identifying the Growing Agricultural
Service Sector in Australia. Australasian Agribusiness Review, 26(1673-2019-707), 1.
Purves, N., Niblock, S. J., & Sloan, K. (2015). On the relationship between financial and non-
financial factors: A case study analysis of financial failure predictors of agribusiness
firms in Australia. Agricultural Finance Review, 75(2), 282-300.
Singla, A., Ahuja, I. S., & Sethi, A. P. S. (2018). Validation of technology push strategies for
achieving sustainable development in manufacturing organizations through structural
equation modeling. World Journal of Science, Technology and Sustainable
Development, 15(1), 72-93.

STRATEGIC MANAGEMENT 10
Surdu, I., Mellahi, K., & Glaister, K. W. (2019). Once bitten, not necessarily shy? Determinants
of foreign market re-entry commitment strategies. Journal of International Business
Studies, 50(3), 393-422.
Vaughan, J. (2016). An evaluation of the international market selection strategies utilised by UK
companies. In Academy of Marketing Conference (AM2016): Radical Marketing.
Watson IV, G. F., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. W. (2018). International
market entry strategies: Relational, digital, and hybrid approaches. Journal of
International Marketing, 26(1), 30-60.
Mehlhorn, J. E., Miles, M., Bonney, L., & Tewari, R. (2017). Perceptions of entrepreneurship in
a university agribusiness program: developing a scale. International Journal of Food and
Agricultural Economics, 5(2), 27-33.
Reynolds, E. (2016). Regional roundup-South Australia. Australian and New Zealand
Grapegrower and Winemaker, (626), 15.