Market Trends of Agribusiness Sectors in Australia

This research paper analyzes the market trends of the Agribusiness sectors in Australia and explores the growth of a specific agribusiness company. It discusses the Australian Food focused Agribusiness Sectors, international opportunities, and recommends suitable international strategies. The paper also recommends the most appropriate and inappropriate entry modes for the Agribusiness in the international market.

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

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Executive Summary
The purpose of the research paper is to understand the market trends of the Agribusiness
sectors of Australia in international market. The paper will analyze the growth of an agribusiness
company in Australia. It will also identify. The agribusiness in Australia is a much sophisticated
and highly upgraded industry.
It has also been one of the most innovative and efficient industries of all times. The paper
will also discuss about the Australian Food focused Agribusiness Sectors. It will further discuss
the international opportunities of the chosen industry. It will also recommend the international
strategies which will be suitable for the business. The paper will recommend the most
appropriate and inappropriate entry mode for the Agribusiness in the international market.

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Table of Contents
1.0 Introduction...........................................................................................................................3
1.1.1 Background.........................................................................................................................3
1.1.2 Purpose...............................................................................................................................3
1.1.3 Scope...................................................................................................................................3
2.0 Industry Analysis.......................................................................................................................4
Porters five factor Model in America Agribusiness........................................................................5
Australia’s Competitive advantage over the agribusiness sector....................................................6
International opportunities for Graincorp Limited Australia (Rational for expanding)..................6
International Strategies which are suitable for Graincorp Limited.................................................8
Most appropriate mode of entry......................................................................................................9
Most inappropriate mode of entry...................................................................................................9
Recommendations for future strategic direction of Graincrop Limited in the international market.
.......................................................................................................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

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1.0 Introduction
1.1.1 Background
Food and agriculture is the fundamental need for the human beings to survive and it was
only the birth of the agriculture and farming which led to the basis for the human civilization in
the ancient world. The advancement in the agricultural industry of Australia is led by the growth
and development of the human civilization. Innovations and updated use of technology are the
two most important factors which has led the advancement of the farming and agricultural
industry of Australia. According to the authors Newsome and Sheridan (2018) The Green
Revolutions in the year 1952 has led an increase in the production of crop in Australia. The
average production of crop from 1.85 billion tones in the year 1974 to 6.53 billion tones in the
year 2017.
1.1.2 Purpose
The aim of the paper to identify the growth of an agribusiness company in Australia. It
will also identify. The agribusiness in Australia is a much sophisticated and highly upgraded
industry. It has also been one of the most innovative and efficient industries of all times. The
paper will also discuss about the Australian Food focused Agribusiness Sectors. It will further
discuss the international opportunities of the chosen industry. It will also recommend the
international strategies which will be suitable for the business. The paper will recommend the
most appropriate and inappropriate entry mode for the Agribusiness in the international market.
1.1.3 Scope
The competitive advantage of the Australian agribusiness sector arises from a range of
factors which includes proper utilization of the natural resources, climatic conditions, human

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resources and institutional behaviors (Wilso 2018). It is very difficult to compare the
agribusiness sectors internationally but with the success of the export market for the Australian
agribusiness sectors proves that Australia’s agribusiness sectors is not a weak one. The success
of the export sectors generally involves the extensive production of food rather than the use of
intensive production. Therefore this also suggest that the sun lit plains which are used for
growing and farming food will be a major advantage for the farmers in Australia and for its
agribusiness sectors. The water availability is also a major factor which has led the country to
stand out of the food service sector. Australia enjoys the most variable rainfall from most of the
major agricultural nations. Therefore for this the farmers also add fewer amounts of pesticides
and fertilizers to the crop.
2.0 Industry Analysis
The Australian food focused Agribusiness sector has the ability to adapt, form successful
collaboration with the companies and implement innovative ideas to grow its business in order to
support Australia with a prosperous and strong sustainability of food securities. The food focused
agribusiness sector in Australia is known as for exporting its food to the global food trade.
According to Soriano, Fleming and Battese (2019) Australia accounts for exporting 3% of the
foods exported to the food trade with an annual expense of $35 billion dollars. The sectors is also
known for implementing the latest technologies which will lead the industries to increase the
food production of the country. Few barriers which are presently faced by the sector are with the
limited land for production of food crops and effects of the changes in the climate. The
agribusiness sector in Australia has maintained their business and position even though it has
produced food in the driest condition and lowered quality of soil. The Research and

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Development capabilities of the industry have been the best in the world among its competitors
which has helped the sector to gain a competitive advantage over its competitors.
The Agribusiness sector in Australia lies within a huge scale of farming system where the
industries have fair skills in farming and agribusiness. In the present scenario the agribusiness in
Australia is facing an increase in the inefficiency of growing foods with an increase in the labor
cost coupled with a lower rate of innovations.
Porters five factor Model in America Agribusiness.
Fig 1. Porters five factor Model in America Agribusiness.

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Australia’s Competitive advantage over the agribusiness sector
Also the Australian tax payers are known for paying the lowest level of subsidies from
any other tax payers located worldwide regarding their agricultural sector. Therefore this means
that there is an indirect influence of decision making policy in the farms. The second major
factor for the success of the Australian agribusiness sector is with the business management
skills of the farmers and technological up gradation of the tools and methods used in the
industry. According to Newman (2018) the farmers in Australian agribusiness sectors are highly
skilled with their production of fibre and food. They are also known to be good managers of
work. The third major success of the agribusiness sector is with the innovativeness of the farmers
in Australia. According to a research which was proposed by Mariyon (2019) in the Australian
Farm Institute claims from his evidences that the average annual rate of the growth of the
productivity over the last twenty years has been recorded as the second highest from any sector
in the Australian Economy. With the growth of the telecommunication and adoption of the latest
innovations by the farmers are the key factors for achieving the increased rate of production.
International opportunities for Graincorp Limited Australia (Rational for expanding)
The main products which are manufactured by the Graincorp Limited Australia are bakery,
infant food products, fried foods, snacks and confectionaries. The international opportunities are
briefly described below.
 New market expansion leads to an extend in the product life cycle – The product life
cycle management leads to the succession of the strategies which are implemented by a
business institution as the products goes through the product life cycle. If Graincrop
Limited introduces its products into the international markets like America, with the

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expansion of the market the life of the product will extend also improving the product
quality. It will also reduce the prototyping cost of the products. It will also help the
company in identifying the potential sales opportunity in the outside market. To create
successful new products in the outside market the company should understand the
customers, competitors and market first.
 Gain access to materials and resources – According to Clay and Feene (2019) many
companies has disillusioned with their sales and operations in the international market as
because of the saturation of the old market in terms of the entry of the new ones. If
Graincorp emphasizes in customizing their items in order to offer globally standardized
products which are advanced, reliable and functional which are at low price. If the
company markets its products abroad it will have a bigger market to capture and explore
and attract consumers.
 Integration of operations on a global scale – Due to the establishment of market in a
global scale the company should be able to integrate its market with various factors
which will help in the successful operations in a large scale. Implementation of new
operational model and structure and the ability to execute the barriers. Graincrop should
also manage its supply chain management which will help it to expand in the global
market, give a good competition to the competitors and overcome the fluctuations in the
production and farming (Russell-Smith 2018).
 Better use of rapidly developing technologies – There will also be an opportunity to get
an access over the latest technologies which are used by agribusiness sectors worldwide.
With tillable land shrinking due to the rise in the population, the agribusiness company
will be able to find innovative ways to produce the foods. Through proper innovation,

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planning and stewardships of environment the company will be able to flourish in the
global market (Tripoli and Schmidhube 2018).
International Strategies based on the theories which are suitable for Graincorp Limited
The supply of raw materials to the agribusiness plant for processing and manufacturing
sector is the primary role of Graincrop in America. Access to lower rates of raw materials will
provide an advantage to the company (Bake 2018). Access to easy and proper transport and
logistics supply services are an essential part of the agribusiness. It will help Graincrop in
providing a link between the members of the agribusiness chain who are continuously involved
in a process of moving, handling, supplying, processing the raw materials and end products.
America is a country where the cost of the labor is pretty low. Easy access of lower rates of the
labor will also help the company in gaining a competitive advantage over others. This also
reduces the transaction cost of the company and the company will be earning a higher rate of
profit. The customers in America have a higher rate of income therefore the company will be
able to introduce higher priced and diverse products into the market.
Based on the strategies which are discussed above the supply of raw materials to the
agribusiness plant for the processing and manufacturing of the sector will be the most suitable
for the company Graincrop. It is the best strategy which can be implemented by Graincrop as
because the company will be able to easily supply the materials in the minimally processed or
unprocessed stages which involves the production of raw latex, crude oil and other fruits and
vegetable products.

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Theories for the mode of entry into the international market.
Licensing for the food products before entering into the market will facilitate the firm in
getting a better access to the customers and market expansion. Licencing for the export control
document is issued by the government agency which monitors the export of agribusiness
between America and Australia.
Strategic Alliance is an agreement between two countries which helps them to agree upon
the legal partnership of trade between them. This will help the company to gain a corporate
affiliate relationship between Australia and America.
In order to get an access in the new international market, Graincrop should have the
acquisition of management skills. Acquisition mode of entry into the market will also help the
firm to have a rapid cross border access to the international market.
Most appropriate mode of entry
After analyzing the market and mode of entry which are suitable for Graincrop Limited it
can be recommended that Exporting the goods and food products directly into the market of
America will be appropriate. The government in America is very strict whereas if the company
has to set up manufacturing plant in America it would not be feasible as because it will have to
pay a huge sum of money and get the manufacturing plant located. The company will also have
to make expense in manufacturing and development of the plant (Willer, Lernoud and Kemper
2018). However it will have to make more expenses in developing the machineries and pay high

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taxes to the government. Therefore it is recommended that exporting the goods and products
from Australia to American.
Most inappropriate mode of entry
The most inappropriate entry mode for Graincrop Limited in to the international market
will be the New wholly owned subsidiary mode. This mode of entry is the most complex method
which is also often very costly. According to Newsome and Sheridan (2018)new wholly owned
subsidiary method of entry into the international market is very time consuming as well as the
company has to bear a high risk. The managerial department of the company will also have to
pay high attention over the average return of the profits owned by the company.
Recommendations for future strategic direction of Graincrop Limited in the international
market.
Direct farming in the rural parts of America will encourage the farmers to undertake the
grading of the farm and drag produces the food which will be regulated to the international
market for sale. Direct market an export facility to America will help the company to economize
on the transportation and export facilities. This will also help the company by providing
incentives to large scale marketing to increase their purchasing direct from the areas where the
good is produced. Contract farming and merging with new and competitive firms in the
international market will be beneficial for the company in pooling the local available resources
and expertise the new and upcoming challenges faced by the company.

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Conclusion
In order to conclude the above research paper it can be said that Grainrop Limited will
have to face a very tough competition in the international market. The research paper has
discussed the about the Australian Food focused Agribusiness sector. It has also discussed the
opportunities which are open to the company if it globalize its products in the international
market of America. It ahs then focused its discussion into the most appropriate and inappropriate
mode of entry into the international market. It has in the end put forward its recommendations
for future strategic direction for Graincrop Limited in the international market.

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