BBMM507: International Business Expansion in Guatemala and Zimbabwe

This report provides a comprehensive comparison between Guatemala and Zimbabwe for business expansion, focusing on Australian Fine Foods' potential entry into these markets. It begins with an executive summary, followed by an introduction to the company and its VRIO framework, assessing its resources and competitive advantages. The core of the report involves a detailed comparison of Guatemala and Zimbabwe, analyzing their economic, technological, legal, cultural, and religious environments to identify the best market for expansion. The report then recommends Guatemala as the preferred country, detailing an effective entry strategy, including the export of high-quality Australian products, and a two-year entry plan. It concludes by emphasizing the importance of these strategies for establishing a stable and profitable business in the new market. The report also examines the distinctive features of doing business and the risks identified for each country. The report also discusses the legal environment, cultural and religious beliefs in both countries.

1
International Business environment

2
Executive Summary
The project report deals with the comparison between Guatemala and Zimbabwe for business
expansion by Australian Find Foods which is based in Australia and provides great quality food
and ingredients across the globe. After a detailed comparison and identification of the risk
factors, an effective strategy has to be made in the choice of country and understanding how the
first two years of entry plan will work. The all-inclusive product range includes fresh meat,
seafood, dairy, beverages, and other grocery items. The main objective is to provide premium
quality products to the clients locally as well as the global level while offering competitive
prices.
The comparison shows why the target company was chosen for business expansion and an
effective entry plan in the new country keeping in mind the focus for the initial two years. The
conclusion represents the important factors of the entry strategies and plan will make sure that
the business becomes stable faster in the new country and starts acquiring better profits
gradually.

3
Table of Content
Introduction......................................................................................................................................4
Company..........................................................................................................................................4
VRIO Framework of Australian Find Foods...................................................................................4
Target Countries – distinctive features of doing business and the risks identified for each country
.........................................................................................................................................................7
Final Recommendation:...................................................................................................................9
Entry Strategy..................................................................................................................................9
Entry Plan......................................................................................................................................10
Conclusion:....................................................................................................................................13
References......................................................................................................................................14

4
Introduction
Australian Fine Foods is one of the leading food distribution companies and exporters. There is a
range of diverse products that include shelf table, confectionary and frozen foods that have a
high reputation. The company partners with some of the leading grocery companies in the
country like Masterfoods, Unilever, and Heinz. The brands are well recognized and provide
high-quality ingredients and food products. Australian Find Foods is able to establish
partnerships, and offer the client a huge variety of products for years. Additionally, the company
remains ahead in the distribution of products that developed and launched in recent times.
The main objective of this report is making a comparison between the two target countries for
the organization to expand its business in. Understanding the unique characteristics of the two
countries Zimbabwe and Guatemala and also assessing the risks that might be involved for
operating in individual countries.
The Company
Australian Find Foods has built its reputation for over twenty-five years. It was started initially
as a family business in Melbourne with one food product and numerous possibilities. Now the
business has expanded in more than 21 countries across the world. The buying power of the
company is a strong one, and there are presently over 150 suppliers that provide an entire range
of fresh and dry goods from all over Australia to cater to different divisions of the market. The
products are produced and grown in a manner that it reaches the clients keeping the freshness
intact (Hamiltonet al.2018).
VRIO Framework of Australian Find Foods
VRIO is one of the best ways of observing strategic analysis. Leaders of Australian Find Foods
will be able to make use of VRIO for making a sustainable and competitive benefit by observing
the importance of resources in the company and the overall business model. The VRIO analysis
of Australian Find Foods is an analysis based on resources with the use of details that have been

5
provided in consumer analytics at the company. This will also help the business to make over
average profits and prevent any kind of competitive pressures (Hamiltonet al.2018).
Resources Value Rare Imitation Organizatio
n
Competitiv
e benefit
 The right
implementation
of digital
strategies
Yes,
without an
all-
inclusive
digital
strategy
there will
be
difficulty
in
competing
.
No, almost
every firm
makes an
investment
in operation
digitalization
.
It can be
imitated by
the
competitors
in the same
field.
One of the
top players in
the field.
It is
important
for the field,
but won't
provide a
sustainable
advantage.
 Access to
important raw
material for
successful
completion.
Yes Yes,
competitors
will have to
be in line
with the
company’s
Yes, it can
be imitated.
Yes Will offer a
competitive
advantage
that will be
sustainable.

6
dominant
position in
the market.
 The track
record of team
leadership
Yes Yes Cannot be
imitated by
the
competitors
.
Yes Will offer a
strong
competitive
benefit.
 Channel
management
and sales
department
Yes No It can be
imitated by
the
competitors
.
Brilliant
sales
department
still provides
amazing
potential.
There is a
certain
potential
and can
offer a
competitive
advantage.
 Product cost
strategies
Yes No These
strategies
can be
imitated
easily.
Yes, the
company has
cost analytic
engine
Competitive
advantage
for some
time.
 Management
leadership for
next challenges
Yes No Cannot be
imitated.
Not on the
basis of
information
provided in
the situation.
Might lead
to a
competitive
advantage
that is
strong.
 Brand
extension
opportunity
Yes, the
company
can
expand to
more
Yes, not
many
competitors
are targeting
a specific
Yes, it can
be imitated
by the
competitors
in the
It will need
more budget
for marketing
and
expansion.
Will offer a
long term
competitive
advantage.

7
countries. area. future.
Target Countries – distinctive features of doing business and the risks identified for each
country
One of the most growing structures in the world today is business. There are specific
requirements that need to be fulfilled in order to set up the business in a new country for
maximum profits. But this requirement is fulfilled by very few of them. For the selection of the
specific country between Guatemala and Zimbabwe, a comparison has to be done on important
criteria's to expand the Australian Find Foods branches on different markets (Kolk, 2016).
 Economical comparison between Guatemala and Zimbabwe
Guatemala is amongst the most populous countries of the world, and the GDP it has is
one-third of Brazil. Distribution of income is also not equal, and over 12 percent of
people are below the poverty line. The private sector dominates the economy of the
country on a huge level, and this helps in overall development and growth of the country.
Around 85 percent of its GDP is generated, and the food processing mainly governs the
manufacturing processes. As per the statistics of the year 1992, the participation of
women as labor force was about 42 percent that has been on a constant rise. The main
reason behind this is that women understand better now the requirement of work for
providing good quality of life to the rest of the family. The Guatemala imports are largely
dominated by the UK that equals to around 36 percent (Picciottoet al.2016).
The present economic condition of Zimbabwe supports other businesses and needs higher
foreign investments. Because of the colonial and political past, the country was not able
to get any exposure to the outside business. Even after being at a profitable location the
country has a high number of people living in poverty and unemployment is high. Also,
the country requires more natural resources for supporting the local businesses, but the
initiatives taken by the local investors do not have a major effect on the trade. After the
year 2000, the white-owned farms were able to capture the market efficiently, and the
GDP is over $ 17 billion (Tian, 2016).

8
 Technological comparison between Guatemala and Zimbabwe:
In the department of technology, Guatemala is lagging behind. Only now has the
industrial revolution started. Between the year 2010 and 2014, the internet access of the
families in urban areas of the country went higher from 18% to 26.7%. Then in the year
2010, it was observed that the people living in the territorial area only had internet access
to 1.4 percent. This has changed much till now, and overall around 13% of people access
the web, and there is improvement being observed.
Zimbabwe is trying to focus more on technology in the field of Information technology
and communication. But because of the bad infrastructure, the optimization is not yet
achieved. Recently the government had also made a decision of allocating a minimum of
1 percent GDP for departments related to research and development. But high illiteracy
rates and a lack of workforce that is skilled does not support this idea (Picciotto, 2017).
 Comparison of the Legal environment between the two countries:
Guatemala has strict laws implemented in the country. It has a constitutional monarchy
and accepts the ICJ jurisdiction. The countries environment is very legal, and the
government does focus on any kind of illegal activities. The constitution of the country
has passed many acts, and the courts are well-informed and strict. So one can say the
legal ambiance overall in the country is great (Zellmer-Bruhnet al.2016).
On the other hand, the rules and regulations in Zimbabwe are not strict at all. The
political system along with the constitution observes constant change, and it is still a
developing place. Although there are not many strict rules of the business, there can be
aspects where the constant change in the regulations might poise issues constantly.
Mainly the problems that can be faced by the business include rigid rules on human rights
and the ownership of local mining companies (Cano-Kollmannet al.2016).
 Cultural and religious beliefs in Guatemala and Zimbabwe:

9
The main religion followed in Guatemala is Christianity, and the national language is Spanish.
Throughout the country, numerous churches can be found, and most of the people are Catholic.
There are other religions that the country has including Buddhism, Hinduism, and Islam. All of
the religious places related to these specific religions can also be easily seen in the country
(Cuervo-Cazurraet al.2016).
The cultural and religious beliefs in Zimbabwe, on the other hand, are very different from that of
Australia. Through National culture's reflection, the organizational structure is impacted. The
hierarchical organization system is given importance, and the employees that are elder are said to
be having more experience and efficiency for operating better designations. On the basis of
position in the society people are hired in an organization and the corruption levels is way higher
as compared to Guatemala. There will be issues faced while the company will try to hire
employees from the area. The culture and traditions need to be well respected in case any foreign
business wants to enter the market (Dohet al.2017).
Final Recommendation:
As it is clear from the information and comparisons made above, Guatemala will be the perfect
country for business expansion or setting a new office. The main reason being the economic,
technological and cultural conditions in Guatemala is presently way better when compared to
Zimbabwe, and there is a clear idea on the rules and regulations that need to be followed when
trying to operate in the new area. Also, the country highly supports the new business setups.
Without a doubt, Guatemala will be highly profitable got the business by Australian Find Foods.
Therefore, the final choice is Guatemala, and now a further effective entry strategy has to be
made (Beugelsdijket al.2017).
Entry Strategy
There is a welcome by the Guatemalan Government for the investment and business expansion
by foreign companies. Usually, there are few regulations or legal restriction by the government
for investors coming from outside. There is stability observed for the Australian companies and
apart from the fast food chains most of the restaurants and hotels but the products from various

10
distribution channels. There is a high demand for vegetables and fruits that are bought usually
from the local market. Apart from that, there is high reliability on the products that are imported
especially for hotels and restaurants that serve international cuisines. This includes fish, frozen
seafood, wines, and dry fruits or exotic frozen vegetables (Zanderet al.2015).
 Entry strategy for by Australian Find Foods by the export of the products:
The main entry strategy for getting successful in the Guatemalan market is initially
working towards providing higher quality Australian products while matching the local
prices. This is hugely important as the market is mainly price conscious. If Australian
Find Foods wants to enter the Guatemala market, they also have an option to connect
with the local importers, distributaries and various other agents as per the kind of product
that needs to be sold by the company (Richteret al.2016).
 Hiring distributors in Guatemala:
This will be the fastest, most efficient and easiest way of entering the market. Specifically
in the case of the distributor that was hired has already been involved in the supply of
other imported products for a long time. There is a complete list of the agencies that
present or distribute the products from Australia in Guatemala that can be received from
the Foreign Agricultural Service (FAS) office. There is also a record of the present
activities that are going on, and this will offer new opportunities to Australian Find Foods
for meeting the trade requirements. One thing that has to be kept in mind is the
compliance of local regulations on imported products in order to refrain from any issues
while the product gets imported there (Derudderet al.2016).
Entry Plan
The following overview shows the entry pan and the targets while the company’s initial
time period of two years. The main opportunities observed are in the hotels, restaurants
and the institutional markets. But before that, it is important to observe an effective
marketing structure for the company and how it will operate in Guatemala (Morschettet
al.2015).

11
 Market Structure for Australian Find Foods
 Target 1: Hotels
There are on an average 3000 hotels, motels and other bed and breakfasts that presently
operate in the country. They also provide accommodation to tourism and business sectors
alike. The hotel's chains that are international have a minimum of one restaurant that is
always open for the public, and then there is a minimum of two restaurants in total.
People that are traveling to the place for the business objectives stay from two to five
days and hence usually the restaurants provide complimentary breakfast and people also
prefer having their breakfast in the hotel while they go for dinner or lunch in the
restaurants near (Cumminget al.2016).
Mainly the Guatemala hotels buy products through the retailers and wholesalers and rely
completely on them for imported food products, and that is purchased by the distributors.

12
The closest tourism place to the city of Guatemala is Antigua, and there are over 200
hotels over which around 20 boutique hotels are present. Around 70 percent of the people
that travel Guatemala do visit Antigua (Childet al.2017).
 Target 2: Restaurants
As per the National Restaurant council, around twenty-five thousand presently operate in
Guatemala that also includes local cafes, formal dining restaurants serving international
cuisines and food franchise from other countries. There is a high requirement for the
quality of raw material and the specific ingredients for many preparations. There are
some local products involved, but majorly the products are imported internationally to
maintaining high-quality standards. The restaurants import these food products directly or
with the assistance of distributors. There can be benefits taken with the requirement of
international quality food products in the market by Australian Find Foods right here.
There is an opportunity for the company to provide the food products that they will
require to make the menu (Hutzschenreuteret al.2016).
 Target 3: Institutional Market:
These are the main sectors of the market that depend on the government for food product
acquisition. This includes:
 Social programs by the government.
 School meal programs in public schools.
 Public hospitals and
 Prison systems
There are regular contact basis requirements that are given by the government for the
purchase of food products and there is a high need by the government for bids from
international suppliers. This will be a great focus as it will be able to get into a stable