International Business Management: Fidani Chocolate Company Report

This report provides an in-depth analysis of Fidani Chocolate Company's international business strategy, specifically focusing on its entry into the Australian market. The report explores the chosen entry modes of joint venture and direct exporting, highlighting their benefits in terms of communication, globalization, and risk minimization. It details the advantages of a joint venture with Haigh's Premium Milk Chocolate Company, emphasizing the potential for market share gains and resource sharing. The report also discusses the benefits of direct exporting, such as increased control and customer feedback. Furthermore, it examines rejected entry modes like franchising and licensing, explaining their incompatibility with Fidani's business model. The report also analyzes Fidani's internal strengths, including competitive pricing, product quality, and qualified sales service, which contribute to its success. Finally, it outlines operational strategies, corporate objectives, and capital considerations for the company's expansion in the Australian market, providing a comprehensive overview of its international business approach.

Running head: INTERNATIONAL BUSINESS MANAGEMENT
International Business Management
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Executive Summary
The report has thrown light on analyzing the different entry mode strategies which will be
beneficial for the entire success of the Fidani Chocolate Company in the Australian market.
There are different kinds of entry modes which are beneficial for the company, however on
the other hand, there are different other entry mode strategies which are rejected as this will
not help the company in gaining competitive advantage. Furthermore, this can be seen that
the scope of the operations along with the corporate strategies have been taken into
consideration which provided a brief overview on the various aspects which are essential for
the success of the firm in the respective market.

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Table of Contents
Introduction................................................................................................................................3
Chosen Mode of Entry...............................................................................................................3
Joint Venture and Direct Exporting.......................................................................................3
Rejected Mode of Entry.............................................................................................................7
Reasons for Achievement and Core Competencies...................................................................8
Weaknesses................................................................................................................................9
Operational Strategies and Corporate Objectives....................................................................10
Scope of Expansion..................................................................................................................11
Capital Considerations.............................................................................................................13
Policy of Staffing.....................................................................................................................14
Conclusion................................................................................................................................15
References................................................................................................................................17

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Introduction
The respective report will help in analysing the entry mode of the Fidani Chocolate
Company in Australian market. The expansion in the market of Australia will be done
through the help of Joint venture along with exporting technique with the Haigh's Premium
Milk Chocolate Company. On the other hand, the rejected mode of entry for Fidani
Chocolates in the Australian market is Foreign Direct Investment as this will be incompatible
in nature in comparison to the other entry modes which have been selected. Furthermore, the
different internal strengths along with weaknesses of the company is required to be analysed
which will help in analysing the different kinds of reason for achievement along with
analysing the core competencies in an effective manner.
Additionally, this has been seen that the operational strategies along with the process
which will be used in order to become more effective in nature. With the proper incorporation
of the different kinds of SMART principles, this will be effective in nature in taking the
entire organization to a right direction in an efficient manner. The course of action will be
discussed which will be helpful in understanding the course of action in the next few years
effectively. The policy of staffing should be analysed in an efficient manner which will be
beneficial for the growth of the Fidani Chocolates in the Australian market.
Chosen Mode of Entry
Joint Venture and Direct Exporting
Joint Venture
Fidani Chocolates can use the joint venture along with exporting technique for the
entry into the Australian market in an efficient manner. Both the entry mode strategies help in
enhancing the overall communication along with globalizing the different kinds of operations

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in an efficient and operative manner. Furthermore, with the joint venture and exporting
technique, this will be beneficial for the minimizing the different kinds of risks in an
appropriate manner. Additionally, this has been noticed that because of the business nature of
Fidani Chocolates, this can be noticed that joint venture is one of the strategically effective
methods to expand their business in Australian economy (Bai, Krishna & Ma, 2017).
Joint Ventures are the respective form of the partnership which is inclusive of the
creation of the third kind of independently managed organization. The joint venture process is
1+1=3 aspect in which this can be used by Fidani Chocolates and Haigh's Premium Milk
Chocolate company in order to become more competent in nature. In order to enhance the
different mutual interests of the organization, this is essential in nature to share to the
different profits along with risks in an efficient manner. The respective mode of entry will be
beneficial and this will help in enhancing the greater share in the market which will be
helpful in acquiring greater market share (Klier et al., 2017).
With the implementation of the Joint venture aspect by both the companies namely
Haigh's Premium Milk Chocolate company and the Fidani chocolates company, this will be
helpful for them in creating value for the different stakeholders and acquire great amount of
profit in a distinctive manner. The different stakeholders will be gaining huge market share
wherein both the partners will be able to learn different aspects from one another which will
be beneficial for the success of the firm.
Additionally, the Fidani Chocolate Company will be able to share the different
resources from Haigh's Premium Milk Chocolate Company as this will be helpful in become
more competitive in nature. There are different instances wherein this has been noticed that
there are different organizations such as Amazon along with Google which used different
SEO in their companies by creating joint venture with other companies as this provided the

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connections through social networks with the different customers or individuals in the
market.
Similarly, Fidani Chocolates have to analyse their effectiveness through inclusion of
the different kinds of agreements with other chocolate companies such as through proper
advertisements along with offering various discounts to the different customers on their first
purchase which will be beneficial for the overall success of the firm in a positive manner.
With such promotional strategies, this will be effective for both the companies in gaining
competitive advantage in the respective aspect and this will be beneficial in attracting the
customers in the market as well (Webster & Hume, 2018).
Moreover, with the implementation of the joint venture strategy, Fidani Chocolates
Company can gain knowledge on the various availability of the resources in the Australian
market for the chocolate companies as this will be helpful for them to gain trust on the
different suppliers of chocolate dealers in the market and gain competitive advantage in the
Australian market. On the other hand, there are different other obstacles in the market which
can be faced by the respective company in a negative manner. There can be restrictions in the
flexibility regarding the following of the joint venture aspect (Tulung, 2015).
There can be clash of the two different cultures of both the chocolate companies
which can create ineffectiveness in the organizations. The great imbalance can be created as
the two different companies working together can create great imbalance between the
different assets along with the investment as well. This will be the other negative impact of
the Joint Venture on the Fidani Chocolate Company as they are expanding their business in
the respective market.

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Direct Exporting
Additionally, with the implementation of the direct exporting strategy, this will be
beneficial for the Fidani Chocolates Company to expand their presence in the market in an
effective and appropriate manner. There will be gain of potential profits as there will be
elimination of the different intermediaries in a negative manner. As Fidani Chocolate
Company is expanding their business operations in the Australian market, this will have
greater control on the different transaction aspects and they will have the power to deal with
the different kinds of manufacturers or the local distributors of the chocolates in the
respective country as well.
For exporting the business in Australia, Fidani Chocolates will be helpful in fully
engaged along with committed towards the process of export and this will be helpful in
becoming more competitive in nature. Furthermore, there will be increase in the receiving
faster feedback from the different customers about the different products which will be sold
by them into the market in an efficient manner (Webster & Hume, 2015). Fidani Chocolates
will be receiving and creating sense of satisfaction in the side of the customers as the
company will be gaining huge interaction and the direct contact with the customers.
However, there are few disadvantages of direct exporting technique which is being
applied by Fidani Chocolates in order to enter the Australian market. There can be
involvement of additional kind of expenses which cannot be able to cope over time by the
company. Furthermore, the Fidani Chocolate Company will require to put in different and
huge effort in order to become more competitive in nature. These are different disadvantages
of the direct exporting strategy which will be required to be efficient in nature in order to
expand their business operations appropriately.

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Rejected Mode of Entry
The rejected mode of entry for Fidani Chocolates Company is the Franchising
technique along with Licencing Technique. From the different researches, this has been seen
and analysed that the Fidani Chocolate company is not suitable for any other kinds of entry
mode strategies for the expansion of the business.
Licensing Technique
The licencing kind of technique is the one wherein the licence is permitting the
organization in the target market in order to utilize the property of the licensor. The different
property is inclusive of the different kinds of intangible aspects such as patents, trademarks
along with production techniques. There are few merits of the respective technique which is
inclusive of the low risk of financial aspects along with there is low cost of the research and
development.
There can be financial commitment for the licensee which can affect the overall
profitability of Fidani Chocolates in the market in a negative manner. There can be
dependence on the technology which will be affecting the licence agreements in a negative
manner. There can be different kinds of issues related to hacking and this can affect the
overall profitability of the company in a negative manner.
Franchising Technique
On the other hand, there is licencing technique which cannot be applied by Fidani
Chocolates is the franchising technique in the expansion of their business in Australian
economy (Daszkiewicz & Wach, 2014). The franchising is basically the technique in which
two parties are involved which is inclusive of franchisor and franchisee. There are certain
benefits of the franchising technique in which this can be seen that the risk of the failure is

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reduced by franchising (Bernard, Grazzi & Tomasi, 2015). The franchisor will help in giving
support and this will help in making the financing of the business in a better manner as well.
However, there are different kinds of disadvantages of the franchising technique in which this
can be seen that the costs are higher in nature and this is inclusive of the different kinds of
restrictions along with this is difficult for selling the different products to franchisee (Wei et
al., 2014).
Reasons for Achievement and Core Competencies
Competitive kind of pricing technique is the first aspect which can be applied by the
Fidani Chocolate Company as this will be beneficial for the overall success of the firm in the
Australian market. With the help of the research, this has been noticed that there are different
kinds of other chocolate companies which are popular in nature and offers similar kinds of
chocolates which are home made and low in cholesterol to the different customers in the
market as well. Fidani Chocolate Company tries to offer the similar kinds of chocolates in a
competitive price which will be beneficial for the direct exporting of the products in the
entire country (Hollender, Zapkau & Schwens, 2017).
Quality of the Product is the other aspect which is being applied by Fidani Chocolate
Company in an effective manner in the Australian market.The company tries to offer the
sugar free and the home made vanilla based chocolates which will be helpful in the joint
venture aspect and this assisted the company in gaining huge competitiveness in the market
effectively as well. There has been creation of a separate division wherein the chocolate
testing has been done in order to attract a large base of customers in the entire market in an
appropriate manner (Hennart, Sheng & Pimenta, 2015).
Practiced and Qualified Sales Service Workforces are the other aspect in which this
can be seen that this will be helpful for the company in gaining their presence in the market in

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a proper manner (Hill, 2017). With the different experiences staffs in the organization, this
can be seen that the in-house department of tasting the different chocolates is required to be
done by the specialists in the market which will be helpful for the company in becoming
more competitive and help the different individuals in tasting the chocolate flavours and
select from them (Varadarajan, 2018).
Weaknesses
Weak positioning of the market is the first aspect wherein this can be seen that as
Fidani Chocolate Company is not an Australian brand and this affects their overall
positioning in a negative manner. Furthermore, the weak positioning can affect the overall
sales of the company as there are other chocolate companies which are using the innovations
in the technological aspects which will be different from the other competitors in the market
(Swoboda, Elsner & Olejnik, 2015).
There can be issues in the labelling of the product in the Australian market wherein
this can be seen that there are different famous brands in the entire market such as Cadbury
and other companies which affects the overall effectiveness of the product in a negative
manner (Solberg et al., 2018). While expanding their business in the market, this can be seen
that there will be different individuals in the market who will be preferring the premium
brand chocolates which are famous in Australia and this can affect the brand image of the
organization in a negative manner as well (Sutiksno et al., 2017).
Operational Strategies and Corporate Objectives
Design of the Product along with Development is the first strategy which can be
applied by Fidani Chocolate in the Australian market. The department of the research and
development will be helpful in nature in gaining competitive advantage in the market and this

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will be beneficial for the overall success of the firm and this will help them in managing the
needs of the individuals successfully in Australia (Tulung, 2017).
Aspects of the locality is the other strategy which will be helpful for Fidani Chocolate
Company to expand their business operations and attract more customers in the market. The
South and western Australia are the two major regions wherein Fidani can expand their
presence as with the help of survey, this has been analysed that the population is high for the
children along with the young generation and this will be beneficial for the business of Fidani
Chocolates (Picot-Coupey, Burt & Cliquet, 2014).
Proper human resource aspects are required to be taken into consideration as this
will be helpful in hiring the right and suitable employees for handling the different kinds of
activities in an appropriate manner. With the implementation of the marketing departments,
this will be helpful in gaining competitive advantage in the Australian market as well (De
Villa, Rajwani & Lawton, 2015).
Corporate Objectives with Usage of SMART Aspects
The popularity of the brand is one of the major corporate objectives which is specific
in nature as this will help them in increasing the sales of the chocolates.
Secondly, the sales percentage will be increased to more than 30% within two years
and this will be beneficial for the overall success of the firm in an appropriate manner.
Thirdly, the tome frame should not exceed two years by the company as this will help
them in increasing their presence in different other parts of Australia as well.

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Lastly, to achieve the market penetration rate to more than 20%, this is necessary for
the company to expand their business in different other regions of Australia as to gain more
competitiveness in the market efficiently.
Scope of Expansion
Fidani Chocolate Company will be expanding their business operations in different
parts of Australia through the different usage of the entry modes such as direct exporting is
the most prevalent one. The Fidani Company tried in choosing Australian economy as there
are huge scope of the growth of the chocolates in such market and this will be beneficial for
the overall growth of the company (David, David & David, 2017).
Figure 1: Different Central Locations in Australia
(Source: Fong, Lee & Du, 2014)