Semester 1 2019: Blue River Dairy International Business Report

This report provides a comprehensive analysis of Blue River Dairy's international business operations, focusing on its market potential, particularly in Brazil. It begins with an introduction to the company, its history, and its product offerings, including sheep milk products and infant formula. The report then delves into the economic and cultural environments relevant to Blue River Dairy's expansion into Brazil, comparing and contrasting cultural dimensions between New Zealand and Brazil using Hofstede's cultural dimensions. The Heckscher-Ohlin model is also applied to assess trade balance. The report then highlights the profitability of sheep milk products for the company, and concludes with an assessment of the market potential of New Zealand's dairy products in Brazil, based on economic data and cultural considerations. The report also mentions the company's global presence, including manufacturing plants and its sister organization in Sardinia.

International Business
Blue River Dairy

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Table of Contents
Introduction.................................................................................................................................................2
Part A..........................................................................................................................................................3
Blue River Dairy.....................................................................................................................................3
Part B...........................................................................................................................................................4
i. Economic environment....................................................................................................................4
ii. Culture environment........................................................................................................................5
iii. Heckscher Ohlin Model...............................................................................................................8
Part C...........................................................................................................................................................9
Sheep milk (A profitable product for the company)................................................................................9
Part D........................................................................................................................................................11
Market potential of New Zealand’s dairy product in Brazil..................................................................11
Conclusion.................................................................................................................................................12
Bibliography..............................................................................................................................................13

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Introduction
In this report, it can be assessed that how Blue river dairy is picking up the upper hand in the
market and what procedure has been embraced by the Blue River organization through globalization.
Under the finding of this report the examination of Blue River dairy, its market potential, the procedure
of delivering the products and services and also its structure and tasks, history and items, quality, the
work environment can be assessed. Blue River plays an essential role in New Zealand's economy, its
sheep milk products have acquired a dominant position in the domestic and international market as well.
(Media release, 2018).
Apart from this, the report likewise examines how the Blue river dairy received the overall
quality administration, brand procedures, item repositioning, and inventory network in order to continue
its accomplishment to be in the long haul. Company's contribution to Brazil’s market and how to increase
its market potential by analyzing and comparing its cultural environment comparing to Brazil, also its
particular product which brings extra profit to the company can be examined.

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Part A
Blue River Dairy
Blue River established in Invercargill, New Zealand. The organization is the southern-most Infant
Formula maker on earth. Developed in 2002, the organization started its vocation while names, for
instance, Monowai, Blackmount, and Tussock Creek were puts fundamentally simply neighborhood
individuals thought about. In the mid of 2013, Blue River's award-winning cheese was making those spots
effectively perceived names. The organization had made a claim to fame feature that Southland was
happy for (River, 2014).
Blue River Dairy's potential was perceived globally while the company was obtained by the Chen
family from China in 2015. The association prospered and at the end of the year 2015 the company had
ended up being a pioneer, turning into the primary assembling plant on the planet to trade sheep milk and
baby child formula (Bloomberg, 2018).
By 2016, sheep milk details were on the ascent and Blue River set its branch on Sardinia, the
international’s biggest sheep whey makers. Blue River’s sister organization, Alimenta, situated in
Sardinia, gave support to this supply, guaranteeing that companies fixings and nourishing items would be
chosen from the planet’s most noteworthy quality fixings (Alimenta, 2016).

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Part B
i. Economic environment and its contribution to Brazil’s market
Amid the previous two years, the organization recorded a general income development rate of
938 percent. In a similar period, the business likewise had a 1058 percent development in fare income
(Scully, 2018).
In 2016, the organization sent out 400,000 jars of newborn child formula and this year it was on
track to achieve seven million jars. An objective of 15 million jars had been conjecture for 2019 (Scully,
2018).
The organization is building another generation line that would be finished by mid-2019 and
make another 20 employment. Recently, the organization grabbed the HSBC Corporate Recognition
Award at the 2018 Export Southland Recognition Awards. At the point when Blue River Dairy originally
began in Southland, it concentrated on Cheese produced using sheep milk. It at that point extended to
dessert, milk and milk powder produced using sheep. Newborn child recipe utilizing milk from sheep,
goats and dairy animals is its real fare item. The Blue River Dairy assemble now has manufacturing
plants in Italy and New Zealand and a head office in China (Nicoll, 2018).
Brazil is New Zealand’s 50th biggest export market. There is a critical New Zealand agribusiness
interest in Brazil. Private financial specialists and New Zealand corporates have put resources into dairy
ranches in the Goias and Bahia states (Prichard & Peterson, 2015).
In 2016 Brazil’s import for dairy products from New Zealand statistics was $52,414 which was
approximately 20 metric ton. In 2017 it was 1,729,800 around a 541metric ton and in 2018 it was around
$221,746 around 71 metric ton (Ming, 2018).
ii. Culture environment
Nestled in Invercargill, New Zealand’s southernmost cities, Blue River farm may be a world
category organic process formula manufacturer. Established in 2003, the company has grown from
making award-winning sheep milk cheeses into a world leader in organic process formula production and

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commercialism. A verified pioneer within the business, Blue River farm developed the world’s initial
baby formula mistreatment completely sheep milk macromolecule and nowadays is that the solely plant
within the world producing organic process formulas using milk from 3 totally different species—sheep,
goat, and cow (River, 2014).
Blue River’s innovative teams are centered on quality, nutrition, and compliance. It strictly
controlled production method begins with rigorous testing to pick out solely the best quality ingredients
from New Zealand and around the globe. Its process surroundings are rigorously controlled to make sure
the each will exceeds the number of the best compliance standards within the world
(River, 2014).
At the Blue river farm, the company is changing dynamically the face of New Zealand farm. The
company has a tendency to recognize that each baby has a totally different organic process and biological
process desires, and that company attempts to supply additional organic process selections for baby’s
happy and healthy development.
Export and import between New Zealand and Brazil are not far good as it involves many attitudes
and behavioral and cultural differences. To increase Blue River’s market potential in Brazil it is indeed to
understand its cultural environment and individual’s behavior, there are several Hofstede culture
dimension to understand Brazil's culture and also it's compared to NZ's culture
Brazil
New Zealand

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(Insights, 2018).
Power distance
On 22 NZ is at a very low scale with this dimension. Within affiliations, the dynamic
framework is set up for accessibility, professionals are broad-minded and chefs rely upon individual
agents and gatherings for their dominance (Hofstede-Insights, 2018). On 69, Brazil mirrors common
person that faiths pecking order ought to be considered and imbalances between individuals are worthy.
The diverse movement of intensity proves the way that control holders have a bigger number of
advantages than the less amazing in the public eye (Insights, 2018)
Individualism versus collectivism:
New Zealand, sits at the 79 on this dimension. This supports into a naturally twist community in
which the longing is that everyone deal with themselves and families. (Hofstede-Insights, 2018). Brazil
scored 38 that means in Brazil’s people since birth onwards are integrated into tough, cohesive groups
which continue caring their family in exchange for trustworthiness.
Masculinity versus femininity
New Zealand scores 58 with this dimension and considered a "Masculine" community. Lead in
school, college, office upon the common trends that people must "try to be just as can be normal be" and
that "the victor takes all" Brazil got 49 with this, an actually transitional score (Hofstede-Insights, 2018).
Uncertainty avoidance index

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NZ scored 49 in this estimation. At 76 Brazil scores well– and so do the minority of Latin
American areas. These communities express strong requirements for laws and intricate legal process in
the life cycle. The individuals require following these regulations. If it will not be followed, added laws
are added (Hofstede-Insights, 2018).
Long term orientation VS short term normative orientation
On the scale of 33, New Zealand is seemed, by all accounts, to be a regularizing country. The crowd in
such social requests has strong issues with structure up to the inside and out the truth, institutionalizing
with their thoughts. On 44, Brazil scores as transitional (Hofstede-Insights, 2018).
Indulgence versus restraint
NZ stands with a good score of 75 exhibits that its living style is one of Indulgence. Everyone in
social requests explained by a good score generally demonstrates an availability to comprehend their
main thrusts and prerequisites concerning getting a charge out of life and having a noteworthy time.
Brazil's high score of 59 marks it as an Indulgent society. People in social requests masterminded by a
high score in Indulgence overall demonstrate a status to comprehend their main impetuses and needs as
for getting a charge out of life and having some great occasions (Hofstede-Insights, 2018).
Other Work customs of Blue River with the sustenance wellbeing and quality worry at Blue
River, its solid guarantee to world-class measures of security, quality, and reliability. The organization
has totally consolidated creation arrange from the farm through to families everywhere. Blue stream's
nourishment Safety and Quality System ensures that wherever they are arranged on the planet, an
organization can pass on secured, astonishing things what's more, and organizations. The organization
does not leave anything to probability and test them to see the world through the customer and purchaser's
eyes, conveying the most secure, stunning dairy things and progressing to settle on better dairy sustenance
choices for tomorrow. (River, 2014).

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iii. Heckscher Ohlin Model
During the 1930s, the Swedish business analysts Eli Heckscher and Bertil Ohlin built up a
numerical model for global exchange. This model makes conceivable to discover the exchange balance
between the two nations. Every nation has its very own common assets and claims to fame in the territory
of creation. It explains basically the exchange of products and services between two countries of excess
and scarce of any products such as land capital labor. (Mukhar, 2018).
Compare and contrast
According to Heckscher Ohlin Comparative advantage theory if New Zealand has any excess in
its milk production or in labor or in the capital, or has scarce in such all these things can be exported and
imported from Brazil. The same theory can be implemented by Brazil. For instance, Brazil has over 350
million hectares of fertile land. Brazil's southern calm locales have a comparative atmosphere to New
Zealand's, so cultivates face comparative issues to New Zealand farmers. Brazil has a populace of in
excess of 210 million (Enterprises, 2018).
It is a noteworthy wellspring of meat and poultry generation what's more, is a major player in the
worldwide market for nourishment items. However, there are many challenges incurred with this theory
one of the issues with relative preferred standpoint is that it assumes that there are no trade barriers
measures or any vehicle costs. Truly, these two would add to or detract from the expense of exchanging,
subsequently making a flimsier/more grounded case for exchange. And when a company exports and
imports to another country they have to recognize the trade barriers and issues that only they can succeed.

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Part C
Sheep milk (A profitable product for the company)
Starting in 2003, Blue River has embraced over twelve years of research, ranch transformation in
Southland, dairy sheep reproducing and showcasing of honor winning sheep milk, new and powder,
cheese and frozen yogurt. Asia is its center market (Nicoll, 2018).
Products which made by using Sheep milk, brings extra profit to the company from the
international market. The organization has effectively changed over three Southland sheep ranches to
sheep dairying, creating around 1,000 tons of sheep milk powder every year from 20,000 ewes, which
Blue River needs to develop to 100,000 ewes throughout the following couple of years, in the end
delivering in excess of 5,000 tons of sheep milk powder.
“Blue River has a demonstrated record of giving sheep dairy items all year and currently need to
venture up to the following stage in our advancement,” Blue River originator executive Keith Neylon
says (Nicoll, 2018).
Mass sheep milk powder costs have risen over half in the course of recent years to $13,000 per
ton which features global market weights. The organization increases the value of the mass powder,
producing completed products that are perceived for its medical advantages by observing Asian families.
The organization moved to the previous So-Fresh Ice Cream working in Invercargill and began
delivering a scope of superb sheep milk cheese to the neighborhood and global markets including US,
Australia, and the Middle East. In 2006 the organization entered its cheeses in the NZ Cheese cheese
grants and won various awards. The organization additionally began trialing powdered sheep milk items
alongside frozen yogurt at the Invercargill plant (Nicoll, 2018).
Sheep milk is alluring for some seaward markets. An expected 50 percent of Asians are
narrowing minded of bovine's milk. There is an extreme interest for newborn child formula, mass milk
powder, and cheddar, and research is being completed into other sheep milk items, for example,
pharmaceuticals and makeup (Media release, 2018).

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Sheep milk is higher in all-out solids than dairy animals or goat milk and is said to contain up to twice the
same number of minerals, for example, calcium, phosphorus, iron, and zinc. It is likewise professed to
have a greater amount of the level of An, E, C, and B complex nutrients than dairy animals' milk. Blue
River has customarily changed over around 80 percent of its milk into powder for the fare.
In August 2015 the plant got its MPI and Chinese (CNCA) accreditation which implies Blue River Dairy
approaches into the Chinese market. They propelled their items there in September (Nicoll, 2018). GM
Robert Boekhout is the previous quality chief for Blue River and knows the business greatly. He says the
plant began making cheddar well once again 10 years prior. He calls attention to that the milk is costly
and instead of "playing in the product field" they constantly expected to investigate approaches to include
esteem. He says the interest is in newborn child recipe as that is the thing that they are focusing on.
They are creating between 25-35 tons of cheddar a year and the party goes into the recipe. Robert says the
historical backdrop of the business was topsy-turvy however with Chinese speculation and access to the
business sectors their proprietors give, they're hoping to push ahead with a level of certainty. Blue River
has as of late presented a sheep milk bistro and cheese tasting outlet as a component of an ongoing re-
opening however cheddar making has been a piece of what the organization has been accomplishing for
well over 10 years (Press Release, 2015).

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Part D
Market potential of New Zealand’s dairy product in Brazil and internet market as well
The population in Brazil is around 212mn (World population review, 2019). It is observed that
only 43.0% of the population reported consuming dairy products, which includes 21 % of milk consumers
only (Possa, 2017). Average use of dairy products is around 8Kg which is per capita per year (Lee-Jones,
2018), and the price of milk and other dairy product’s price in Brazil around 105.7$ per capita per person
(Lee-Jones, 2018).
Market potential of dairy and milk and dairy products in Brazil
Total Population in Brazil (P) 212392717
Proportion of (P) that consumes dairy products 43% (R) 91328868
Proportion of (P) that consumes fresh milk and Powder 21% (C) 44602470
Proportion of (R) that consumes cheese 22% (D) 46726397
Average number of Kg of cheese and milk consumed per capita/kg (E) 8.kg
Average price per Kg of milk and cheese (F) 105.7$
Market sales potential of dairy products in Brazil P*R*C*D*E*F 35 million

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Conclusion
The Vision and aim of Blue River are to expand its sheep milk industry to the international
market. The dairy results of New Zealand don't simply originate from cows. Extraordinary cheese can
likewise be produced using sheep's milk – and Blue River Dairy Products has the awards and the growth
in customer demand to prove it.
As the data of the past three years states that, the sheep dairy industry is ready to grow and could
work to turn into a billion dollar industry. Its sheep milk industry getting many awards, its one of the
achievement is the fastest growing industry across the globe.
The way to the accomplishment for the organization has been its nimbleness and development,
which had enabled the organization to fulfill the quality guidelines for the organization to get advertise
get to, he said. As the market for its items has developed impressively, both the sheep and goat items are
in twofold digit development, the organization has needed to swing to worldwide products providers.
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