BUSN2019 - Agrifresh: Operational Impact of International Risks

This report provides an overview of Agrifresh, a family-owned citrus grower in Western Australia, and analyzes the operational risks the company faces when expanding internationally. It focuses on two key risks: cross-cultural risk and country risk. The analysis of cross-cultural risk highlights potential communication barriers and cultural differences that could hinder Agrifresh's operations. The report also examines country risks such as political unrest, trade wars, and regulatory hurdles that could negatively impact the business. By applying relevant theories and providing specific examples, the report offers insights into the challenges Agrifresh must address to succeed in the global market.

Running head: INTERNATIONAL BUSINESS OF AGRIFRESH
International Business of Agrifresh
Name of the student
Name of the University
Author note

1INTERNATIONAL BUSINESS OF AGRIFRESH
Company Overview
Agrifresh is the name of a family owned citrus grower within the Western Australia.
The company has established an integrated business that can help in the packaging along with
the marketing of the citrus of Western Australia that can help in meeting the local demand.
The company has packing facility along with the cool room facility that has helped it in
transforming the citrus business of Western Australia (Agrifresh.com.au 2019). The company
has applied the modern technology along with the management that has helped the company
in becoming model pertaining to controlled efficiency. The vision of the company is to
package high quality of the fresh fruits that has helped it in becoming preferred supplier to
the merchants along with the exporters within Australia and within the international markets.
The main priorities of Agrifresh are its values along with the community participation.
Risks in international business
Agrifresh in the event of international operations will face the cross-cultural risk.
Cross-cultural risk refers to the situation in which the cultural misunderstanding causes some
kind of the human value to be at the stake. The cultural diversity that Agrifresh has to face in
the event of the international operations can make the company face the operational related
challenges. Agrifresh may have to face obstacles in relation to learning the language of the
foreign country that can pave the path for problems for the company. The cultural dimensions
theory of Hofstede states that the culture of a society has an influence on the value of the
members. It has an effect on the attitude along with the mannerisms of a people belonging to
a particular country. The cultural training that is provided to the employees should take into
consideration the cultural norms of the new place that can help Agrifresh in getting
advantages after entering the international market. It would create operational risks as it
would become difficult for the employees of Agrifresh in understanding the pattern of

2INTERNATIONAL BUSINESS OF AGRIFRESH
communication of the foreign country (Gulanowski, Papadopoulos and Plante 2018). The
subtle communications that are non-verbal not being understood by Agrifresh would pave the
path for operational risks in the path of Agrifresh. There can be cultural differences
pertaining to sensitivity along with openness that can act as an obstacle for Agrifresh.
Formality in case of addressing the other business partners is different in different cultures
that can create the way for the operational risks in the case of expansion in the foreign
country.
Agrifresh in the event of international operations may have to face the country risks
that can hamper the business of the country. There are countries that are suffering from the
political unrest and it can create problems for Agrifresh. The trade wars with that of another
country can pose country risks for Agrifresh. The administrative along with the bureaucratic
procedures are different in the case of a foreign country and it can give rise to problems for
Agrifresh. The foreign central bank can alter the regulations that can play a role in reducing
value of that of foreign exchange contracts (Mohr and Batsakis 2018). Agrifresh may not be
able to accurately predict the changes in that of local economic environment that can create
the risks for the company. Agrifresh may not be able to deal with that of the economic shocks
of the foreign country that can give rise to operational problems for Agrifresh. The
government regulations in the foreign country can acts like a barrier in the path for growth of
Agrifresh in that of the foreign country (Midgley, Nicholson and Brennan 2017). Agrifresh
has to stay compliant with that of the regulations of the foreign country that can cause the
company to suffer penalties in the hands of the foreign country. There are a large number of
the permits along with the licenses that can help in making the company compliant with that
of the foreign country.

3INTERNATIONAL BUSINESS OF AGRIFRESH
References
Agrifresh.com.au (2019). ABOUT US | Agrifresh. [online] Agrifresh.com.au. Available at:
https://www.agrifresh.com.au/about-us [Accessed 16 Mar. 2019].
Gulanowski, D., Papadopoulos, N. and Plante, L., 2018. The role of knowledge in
international expansion: Toward an integration of competing models of
internationalization. Review of International Business and Strategy, 28(1), pp.35-60.
Midgley, G., Nicholson, J.D. and Brennan, R., 2017. Dealing with challenges to
methodological pluralism: The paradigm problem, psychological resistance and cultural
barriers. Industrial Marketing Management, 62, pp.150-159.
Mohr, A. and Batsakis, G., 2018. Firm resources, cultural distance and simultaneous
international expansion in the retail sector. International Business Review, 27(1), pp.113-124.