International Business Management Report: Berton Vineyards Analysis

This report provides a comprehensive analysis of Berton Vineyards' international business strategies, focusing on the Russian and Brazilian markets. Section A delves into the management of exchange rates, highlighting the impact of financial contagion and foreign exchange reserves. It also explores key cultural values to be included in training packages for expatriates, emphasizing indulgence and orientation. Furthermore, the report examines Australia's national competitive advantage in wine production using Porter's theory, and analyzes international business decisions considering market benefits and corruption. Section B discusses international strategies, including multidomestic, global, and transnational approaches, and entry modes like exporting, based on Dunning's Eclectic theory. It also covers organizational structures, such as divisional structures, and the application of the 4Ps (Product, Price, Promotion, Place) for the Russian market. Finally, the report addresses global supply chain management, emphasizing the importance of software tools for demand forecasting and efficient export operations. The report offers insights into the challenges and opportunities of international business expansion.

INTERNATIONAL
BUSINESS MANAGEMENT

TABLE OF CONTENTS
Section A.........................................................................................................................................1
Question 1: management of exchange rates...............................................................................1
Question 2: key cultural values to be included in training package............................................1
Question 3: national competitive advantage in producing wine..................................................2
Question 4: International business decision................................................................................2
Section B..........................................................................................................................................3
Question 5: International strategy and entry mode......................................................................3
Question 6: Organizational structure, international decision making and international
marketing.....................................................................................................................................4
Question 7: Global supply chain..................................................................................................5
REFERENCES................................................................................................................................7

Section A
Question 1: management of exchange rates
Exchange rates plays avital role in business for management of business international and
for taking appropriate international business decisions. Exchange rates is also known as foreign
exchange rate. It basically helps in explaining value of one currency as compared to another
company. For organization that sell their products internationally, they are required to focus
more upon exchange rate of two trading companies as it a directly impact their business. In past
few years, trade and capital flow movement to countries like Russia, Brazil, India and China for
business as increased. There are various kinds of issues that can impact Berton Vineyard’s
decision making and in terms of internationalizing their business in Russia and Brazil. Some of
the main issues that can impact their business are: Russia has large foreign exchange reserve as
compared to Brazil. Foreign exchange reserve rate of Russia is approximately 3 times rate of
Brazil (Cherunilam, 2020). It is important for Berton Vineyards to focus upon this foreign
exchange rate of both the companies and it can impact their import and export of wines to both
Brazil and Russia. Both the countries have high history of financial contagion that can directly
impact business of Berton Vineyards. Both the issues can affect international business and
decision making of the company.
Question 2: key cultural values to be included in training package
Cultural training to expatriate working in other countries is extremely important without
proper and effective cultural training it becomes difficult for expatriate so that they can easily
adjust in the new country in different culture (Srivastava, Singh and Dhir, 2020). key cultural
values that are required to be included within training package for executives who will be
working as expatriate in Russia and Brazil are:
 Training related to indulgence is required to be included. It is important to train executives so
that they can understand level of indulgence of people for controlling their desires. This will
help them to understand thinking and mentality of people. For example; People of Russia has
low indulgence level i.e. they do not lay much emphasis upon leisure time and think they are
restricted by social norms of the society. People of Russia prefer more classical things.
Whereas, Indulgence level of people of Brazil is quite high i.e. they spending money,
enjoying and having fun. These people like all kinds of products or services that can provide
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them leisure. Focus upon this value in training program will make it easier for executives in
get involved with people of Russia and Brazil.
 They should also be provided training related to long and shorty term orientation. This will
help them in understanding mindset of people of Brazil and Russia. Like people of Russia
have high long- term orientation and pragmatic mindset and beliefs that truth depends upon
time and situation they easily accept traditional approach. Whereas people of Brazil
intermediate long- term orientation score. They can adapt themselves in traditional or modern
approaches depending upon time, context and situation. This cultural value training will help
executives to handle people in eery situation easily and overcome any kind of challenge or
issue.
Question 3: national competitive advantage in producing wine
Australia has a history of producing high quality and customer valued wine and is famous
for the same. In order to analyse competitive advantage of Austria in terms of in producing,
selling and exporting wine, Porter’s national competitive advantage theory can be used (Kharub
and Sharma, 2017). This theory has four main determinants that can help in analysing
competitive advantage of producing wine for Australia. These four main determinants are:
 Factor condition: Climate of Australia benefits in producing high quality of grapes which
makes availability of raw materials i.e. grapes for producing wines of high quality regardless
of the target population. So, availability of raw materials like grapes for wine production is
an advantage and a specialized resource for wine production.
 Demand Conditions: Output of wine in Australia is high and there is huge demand of wine in
Australia which is a kind of national competitive advantage for wine producers in Australia.
 Related and supporting industries: For transportation of grapes for wine production
Australian Government has construct railways and roads so that transportation of grapes for
wine production of any quantity and quality ca be done without any issue.
 Organization’ strategy, structure and rivalry: There are various top quality wine producers in
Australia due to which there is intense rivalry among wine producers.
Question 4: International business decision
Benefits: In both Russia and Brazil size of middle- class people are increasing rapidly and
they are highly receptive of brands especially in food and beverages sector (Na, Kang and Kim,
2018). Due to this it is an appropriate market of doing wine business in Russia and Brazil in
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terms of consumer market. But education and knowledge of consumers of Russian terms of wine
is much better as compared to Consumers of brazil. Due to this it is a benefit for Australian wine
industries for doing business in Russia. Corruption is one of the major problems of Brazil
because of which organizations doing business in Brazil can face various issues or problems.
However, it is the exact same problem in Russia as well but anti-corruption law in Russia are
much stricter as compared to laws of Brazil. So, it can be said that Russia is abetter and more
suitable country for entering and doing business.
Section B
Question 5: International strategy and entry mode
a) There are various kinds of international strategies that can be used by organizations for
entering into a chosen international market for exploring products and services in the chosen
market. There are three min types of international strategies thatcan be chosen by Berton
Vineyards for entering into market of Russia. First type of strategy is multidomestic strategy
in which a country develops their own marketing strategy based on needs of each country.
Global strategy is another strategy that focuses upon selling of standard products globally.
Lastly strategy is transnational strategy that focuses upon maintaining a perfect balance
between desire and need to adjust to local preferences within a country (Enkhtaivan and
Davaadorj, 2020). Berton Vineyards can use transnational strategy and develop a marketing
strategy on the basis of desire and need of local people of Russia because people of this
country are highly receptive of brands of food and beverages. Using this strategy, they can
maximize local responsiveness and gain many other benefits from global integration.
b) It is important for organizations to choose entry mode of entering into a new global market or
a country for doing business. Each of the entry mode has their own advantages and
disadvantages. There are various kinds of theories thatcan be selected and opted for choosing
an appropriate entry mode for entering into anew international market. One of the theories
for selecting appropriate entry mode is Dunning’s Eclectic theory. This theory can help in
choosing entry mode on the basis of ownership advantage and locational advantage.
 Ownership advantage: it focuses upon competitive advantage that a firm possess.
Berton Vineyards has high experience of operating in international market as their
operate in 28 countries worldwide, they have high experience of approximately 26
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years of producing different variety of wines. These advantages can make it much
easier for Berton Vineyards to export their wines in Russia.
 Locational advantage: they also have locational advantage as demand of their sales in
both domestic and international market is high. They have won variety of awards for
producing and seeing high quality of wines. They also have their own yards and
advance wine producing machinery because of which they have cost advantage of
producing wine domestically and export wine internationally.
On the basis of this analysis it can be said that exporting is one of the most appropriate
entry modes for entering into Russian market for selling wine. Some of the main advantage
exporting are: it is the fastest mode of entry and have lowest risk associated with it. But this
method also has a disadvantage i.e. company do not have full control of selling their products in
the chosen market.
Question 6: Organizational structure, international decision making and international marketing
1. There are various kinds of organizational structures that can be used by Berton Vineyards in
its Russian international market (Išoraitė, 2016). Berton vineyards can focus upon adopting
divisional structure. They can divide all of their activities among group within the
organization. These divisions can be created by them both structure and geographical
location. For this, Expo-documents against acceptancert Department international structure
can be chosen i.e. company can introduce export department under marketing and HR
department for management of all the exports, sales of products in a proper manner. It can
also be said that they can develop country wise organizational structure of management of all
of their sales and exports in different countries. For decision making they can use marketing
mix decision making approach so that all the decisions are taken with reference to foreign
customers and global marketing environment.
2. 4P’s for Berton Vineyards for Russian market is as follows:
 Product: they have large capacity of producing wines and products different varieties
of wines but specializes in producing different quality, quantity and types of grape
wines. They produce 4 main varies of wines that are: Shiraz, Chardonnay, Cabernet
Sauvignon and Sauvignon Blanc varieties. They have also won two Trophies, six
Double Gold Medals and 35 Gold Medals for producing excellent high quality and
different varies of wines.
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 Price: They have adopted premium pricing strategy for selling their wines both
domestically and internationally because they have high quality and widely
distributed wines. Most of the premium priced wines sold by them are elegant, high
flavoured, high quality. They also product one of the finest type of wines that are
available in the market in limited quantity.
 Promotion: they use different kinds of promotional strategies for promotion of their
wines produced and sold by them. They focus upon using digital medial doe
promotion of their wines including social networking sites. They offer
complementary glass of wines at top restaurants and hotels on launching of new
variety of wine.
 Place: They have both physical and virtual locations where customers can buy their
wines. They have physical stores where customers can walk in and buy wines as well
as they have their own application and website where customers can buy wine and
free home delivery is done to them. Their wines are available in wine shops, hotels
and restaurants.
Question 7: Global supply chain
International supply chain is a term used to refer activities and people that go into creating
and offering products and services and management of supply chain internationally (Bonadio and
et. al., 2020). It is important for organization to focus upon effectively managing their supply
chain internationally when they operate and sell their products internationally. Berton Vineyards
has adopted global organizational structure in which they have distributed their functions
geographical region wise like one department is of sales Asia and America, one department is of
export etc. their management team consist of managing director, chief winemaker, sales
manager, export manager, production and logistic manager, graphic design and marketing
manage etc. It is important for Berton Vineyards to focus upon their international supply chain
management so that as per the demand forecasting they can export their wines both domestically
and internationally. For supply chain management in Russia they can adopt a supply chain
management software as a business tool. This tool will help them to access every point of the
supply chain, from order fulfillment to compliance. This software will help them to check
shipping status, billing and order fulfillment, inventory management globally, warehouse
management at all the locations. Not only this, this tool will also help them in demand
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forecasting both domestic and internationally. This tool will help them in effective management
of supply chain as per the predicted demand. This business tool will also provide them with
security so that they can protect their data and manage their customers base.
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REFERENCES
Books and Journals
Cherunilam, F., 2020. International business. PHI Learning Pvt. Ltd..
Srivastava, S., Singh, S. and Dhir, S., 2020. Culture and International business research: A
review and research agenda. International Business Review, p.101709.
Kharub, M. and Sharma, R., 2017. Comparative analyses of competitive advantage using Porter
diamond model (the case of MSMEs in Himachal Pradesh). Competitiveness Review:
An International Business Journal.
Na, K., Kang, Y.H. and Kim, Y.S., 2018. The Effect of Corporate Governance on the Corruption
of Firms in BRICs (Brazil, Russia, India & China). Social Sciences. 7(6). p.85.
Enkhtaivan, B. and Davaadorj, Z., 2020. An integrated-dynamic mode of entry model: global
MNEs entering into emerging markets. Review of International Business and Strategy.
Išoraitė, M., 2016. Marketing mix theoretical aspects. International journal of research
granthaalayah. 4(6). pp.25-37.
Bonadio, B., and et. al., 2020. Global supply chains in the pandemic (No. w27224). National
Bureau of Economic Research.
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