Strategic Management Report: Graincorp's Strategic Management Analysis

This report provides a strategic management analysis of Graincorp, an Australian food-focused agribusiness. It examines the Australian agribusiness sector, identifying international opportunities and suitable strategies for global expansion. The report discusses appropriate and inappropriate modes of entry into international markets, such as Greenfield ventures and strategic partnerships. Furthermore, it offers recommendations for Graincorp's future strategic direction, emphasizing sustainable practices, adherence to foreign policies, and strategic partnerships. The report highlights the importance of adapting to local market conditions and identifies potential risks associated with different market entry strategies, such as acquisitions and franchising. The analysis underscores the need for Graincorp to navigate the complexities of global expansion effectively and efficiently.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Table of Contents
Introduction................................................................................................................................3
Australian food focused Agribusiness sector.............................................................................3
International opportunities for the food focused agribusiness...................................................5
International strategies suited for the agribusiness ensure expansion in the global arena and. .6
Appropriate and inappropriate mode of entry to the international market for Graincorp..........7
Recommendations for the future strategic direction..................................................................9
References................................................................................................................................10

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Introduction
The strategic management concept is the main focus of the report, which highlights
the effectiveness of formulating and implementation of the various goals and initiatives
undertaken by the organisation named Graincorp to sustain in the competitive business
environment. It is a management technique that can allow the business organisation to
develop a shared vision and mission, thereby develop long term strategies through proper
allocation of resources along with management of processes to strengthen the core
competencies. The report will provide an insight about how the Australian food focused
agribusiness sector has acquired the international scopes and opportunities and at the same
time, aim to enter the international market with much ease and efficiency (Ansoff et al.
2018). This will also allow the company to sustain in the future and move in the right
direction to achieve higher level of profit and competitive advantage in business.
Australian food focused Agribusiness sector
The food focused Agribusiness sector in Australia has been considered as effective
because of the extensive efforts put to enhance the agricultural and food production and at the
same time, ensure delivery of great solutions to deal with the global challenges and issues
experienced within the Agribusiness sector. The food focused Agribusiness sector has
managed to enable innovation for enhancing the productivity level and also deliver extensive
value and benefits for meeting demands and expectations of the customers largely
(Rothaermel 2013). The development in technology has enabled robotic technology as well
as facilitate the machine learning experience and remote sensing, which also favoured the
farming techniques and brought innovation in terms of food processing and management of
global food supply chains effectively too. Thus, the Australian food focused Agribusiness
sector has been benefited, which also creates scopes for business organisations like Graincorp

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in Australia to become more profitable, maintain a safe and environment friendly
environment too with constant flow of benefits and profit acquired through relationships with
the international partners and global market segments as well (David and David 2013).
The recent trend within this sector has been to seek the sustainable solutions on a
global scale for overcoming the negative impacts of climate change conditions and also
respond to the constantly changing demands and expectations of the consumers in different
market segments.
The business organisation selected here is the GrainCorp, which is a leading
international food ingredients and agribusiness company that has been associated with the
management of grain activities including the management of supply chains, origination and
manufacturing along with the processing and storage of these grains (Hill, Jones and
Schilling 2014). The company has managed its operations all across Australia, New Zealand,
North America, Europe and United Kingdom. Due to this, the company has managed 50
percent of the international export trade in terms of wheat, canola and barley production. The
major segments of the company are specialised in GrainCorp Grains, malt and oils as well
(Graincorp.com.au 2019).

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The vision of the organisation is to become one of the leading and most established
international agribusiness by becoming the first choice of customers. The integrated supply
chain of the organisation consists of various activities include storage facilities, marketing
activities, freight and transport activities along with the processing of malts and oils all over.
The organisational values and beliefs reflect the organisational culture about how things are
done in a collective manner, which has helped in benefiting the various stakeholders involved
(Eden and Ackermann 2013). This has also resulted in higher level of customer satisfaction
through management of safety standards and delivery of products and services to the
customers effectively and on time too.
International opportunities for the food focused agribusiness
Considering the fact that the food focused agribusiness has largely contributed to the
economic, social as well as environmental footprint, there has been increase in global
consumer spending as well as more employment scopes and opportunities and a higher
percentage of greenhouse gases emissions too. Though there has been various areas where
improved productivity have been experienced, feeding the global population has still emerged
as a great issue, which needs to be handled with properly for ensuring successful business
management (Moutinho and Vargas-Sanchez 2018). Based on the scopes and opportunities,
the financial as well as strategic investors or shareholders have managed to capture value and
benefits through technological innovation, which has also facilitated the agribusiness
activities (Graincorp.com.au 2019).
The international business opportunities also include export and import activities,
which could allow for purchasing goods and services and at the same time, sell the local
products and services in the international market. The licensing has been another opportunity
for the agribusiness to extend its network as well as involve in contractual agreements
through use of a brand name, image and patent that has already been owned by another

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organisation within the concerned sector (Noe et al. 2017). To facilitate the global business
management, there has also been opportunity to outsource the products and services,
furthermore, adapt to the external business environment by meeting up to the expectations of
people in the different international market segments with ease and effectiveness. There are
extensive opportunities as well that are related to need for investments and proper
understanding of the geographic areas, various crops planted and also the complex value
chains associated with the processing, production and retailing activities too (Kara and Fırat
2018).
Considering the major trends nowadays within the food and agribusiness sector, there
is need to fill the gap between the supply and demand, which incurs more resources
allocation and management, financial, human and technical resources. By expanding into the
international market such as in UK and India, the Australian agribusiness would be able to
manage trade relations with other nations, thereby, make sure to import as well as export
goods and services for benefits and profit. There would also be opportunities of licensing
agreement, which could allow for following the licensing laws, rules and guidelines to
manage business abroad (Oh and Contractor 2014). Thus, the legal aspects would be
considered by GrainCorp and the company would be able to sustain in the international
market much comprehensively. With the management of outsourcing activities, there would
be lower costs associated with the labour management and also during the manufacturing and
production processes.
International strategies suited for the agribusiness ensure expansion in the global arena
and
The strategic partnership could be the most suitable international expansion strategy
for GrainCorp to take advantage of the skills and expertise and leverage the experiences of
the global companies with which the partnership has been formed, while entering the foreign

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markets. Moreover, the strategic partnership strategy could also GrainCorp to take advantage
of the local brand equity and ensure introducing foreign goods and services with the built-in
credibility for the purpose of adapting to the local requirements of people in the global
marketplace (Peng 2016). With the help of this strategy, the company would also be able to
overcome the issues and challenges related to the managerial control between the two
organisations, thereby, facilitate better degree of operational control by leveraging the local
experiences and skills of the managers of the organisations too (Twarowska and Kąkol 2013).
The company could adopt the transnational strategy for implementing a planned set of
actions and make sure to manage the business operations and processes in the global market
with much ease and efficiency. The main objective of implementing the transnational strategy
is to expand the sales and produce the goods and services at a much lower cost, thereby
achieve greater economies of scale (Puffer et al. 2013). The transnational strategy could also
benefit GrainCorp by managing a decentralised organisational structure and maintain a
specific degree of control, which could assist in adapting to the foreign market conditions and
achieve the overall performance that has been desired within the agribusiness sector in
Australia (Graincorp.com.au 2019).
Appropriate and inappropriate mode of entry to the international market for
Graincorp
There are different modes of entry into the international markets for GrainCorp and
those are suited according to the needs of the organisation as well as on the basis of various
functions and processes managed while entering the global markets. There could be exporting
and importing activities, strategic alliances, acqusitions, licensing and franchising as well as
the Greenfield venture, which could allow the business to introduce a new and wholly owned
subsidiary while expanding into the international markets. The exporting strategy allows for
faster entry into the international market and has lesser chances of risks, which can allow

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GrainCorp, Australia to extend is network all over the world (Warner and Sullivan 2017).
Few of the disadvantages though could be the lower control over the business functions,
negative environmental impact and lack of knowledge and information about the external
environment consisting of the foreign markets (Graincorp.com.au 2019).
The licensing and franchising is another market entry model that allows for faster
entry into the market too with lower chances of risks and lower costs, though it also has some
disadvantages such as the emergence of legal and regulatory obligations, various laws, rules
and regulations that might hinder the successful global business management. The
acqusitions of another small business could also benefit GrainCorp to make an entry into the
foreign market though the costs of managing these operations and processes are much higher
when compared to the other modes of entry into the foreign market (Kaats and Opheij 2013).
The Greenfield Venture is another market entry mode that allows for acqusitions of
knowledge and information about the local market conditions where the business wants to set
up, furthermore, gain maximum control, though the costs are significantly higher and the
entry mode is slower as well.
The most appropriate market entry mode for GrainCorp could be the Greenfield
Venture and strategic partnerships, which should be beneficial for collaborative working with
another company, while at the same time, acquire knowledge about the global market
conditions much comprehensively, thereby, facilitate greater control over the business
functions and processes while entering the foreign market (Ioris 2016). The inappropriate
mode of entry might be the acquisition and the franchising, as it would make the company
acquire another company, which the company not have any knowledge about, thereby the
chances of risks are higher and the costs should also be much increased while making an
entry into the global market (Cáceres 2015). Not creating partnership with the global
companies, rather focus on expanding the operations through purchase of a new company as

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wholly owned subsidiary should incur a huge amount of cost, which might not be appropriate
for the organisation too (Graincorp.com.au 2019).
Recommendations for the future strategic direction
 Considering the focus of the organisation on managing international business
expansion, few recommendations for the future strategic direction are as follows:
 It is recommended for the organisation, i.e., GrainCorp in Australia to make sure that
sustainable and environment friendly approaches are being followed so as to create a
positive mind-set among the people in the foreign market, thereby, encourage them to
feel interested on making purchases from the organisation
 GrainCorp is also recommended to abide by the foreign policies and principles along
with the legal rules and obligations for ensuring that the company remains adaptable
to the foreign conditions and serve the marketplace efficiently
 Prior to the management of global expansion initiatives, the company should aim at
strategic partnership with the other big companies in the foreign marketplace to
promote agribusiness and identify the potential risks at the early stages
 The company has also been recommended to adopt the local culture and ensure
adaptation to the local market conditions for ensuring delivery of products and
services that can meet the needs of people furthermore
 It is also recommended for GrainCorp, Australia to manage outsourcing activities and
make sure to outsource the human resources as well as the business functions and
processes for adjusting to the external environment and serve the customers
effectively
 Aligning with the corporate social responsibility strategy or CSR is recommended too
for contributing towards the society as well as remain concerned about the
environmental image and awareness for maintaining a healthy and good environment

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References
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strategic management. Springer.
Cáceres, D.M., 2015. Accumulation by Dispossession and Socio‐Environmental Conflicts
Caused by the Expansion of Agribusiness in A rgentina. Journal of Agrarian Change, 15(1),
pp.116-147.
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[Accessed 26 Oct. 2019].
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