As per Australia’s diverse climate rainfall pattern and temperature fluctuation Agribusiness leaves a major impact on the overall business economy of Australia. The geographic isolation of Australia has enabled the business experts in high quality of agricultural production. Rendering continuous innovation on in farm machinery, systematic plant and proper animal breeding program has made the Australian agribusiness world-class commodities to market. This very specific study has focused on Inghams Enterprises, one of the most recognizable poultry producers of the country. This particular brand is primarily owned by TPG capital which is constituted with 8000 employees within services (Inghams 2018). Along with 100 different locations this organizations has established their business process in the realm of both Australia and New Zealand.
Apart from poultry supply Australia is possessed with grain and oilseeds business, aquaculture and fisheries dairy technology and services, fruits and vegetables and so on. As per statistical scenario, Australia imports more than 90 fruits and vegetable items to other country which enormously enhances the economic growth of the country. It is observed that Australia’s vegetable industry generated around Aud$3.8 billion for the Australian economy and exported around Aud$248 million. Amongst all these, poultry business scope in the market of agribusiness industry has left a significant impact on the overall growth of the country. Therefore, Inghams Enterprise has aimed to expand their entire process in other geographical backgrounds as well.
The company delivers frozen chicken as well as turkey products in the market of Australia and New Zealand. Diestre, Rajagopalan and Dutta (2015) opined that after rendering a satisfactory capital in supplying poultry services the organization has focused on enhancing their revenue growth by expanding the entire business process in other geographic locations. Fresh whole chicken, fresh chicken breast bone, boneless chicken, chicken breast tenders, Fresh turkey mince, fresh turkey wings, drumsticks are the core products with which Inghams Enterprise is running their business methods. This company is already possessed with a big hold in the market of Australia and New Zealand. Therefore, Inghams Enterprise primarily aims to expand their business in the market of China as well for rendering more business profitability.
There are several ways based on which a company can place their brands or services in the international market. The ways include export or import, licensing, franchising and outsourcing. Laufs and Schwens (2014) opined that Licensing is the process of making contractual agreement between two companies. With the help of this process one company can use the brand name, identity and business property. In order to follow licensing strategy the organization does not have to form new business set up. If the business organization is not efficient enough in affording money for new business set up, the company can follow import export policy as well. With the help of import policy the organization can bring raw material in affordable price range. As a result, the business experts can reduce the product price that ultimately reflects on business success (De Villa, Rajwani and Lawton 2015). On the other hand, by exporting products in other geographic location the organization can get the scope of expanding their entire process of business in multi-national countries. Products can be introduced in the international market. Consequently, the number of target audience becomes high with the help of which organization can gain immense profit level.
As opined by Sleuwaegen and Onkelinx (2014), Franchise is the process that can be run under a certain brand name. After opening a franchise the business experts can gain instant brand name, recognition sufficient work force strength and so on. As a result, the new business set up does not have to face challenges in gaining new recognition of their brands. Sometimes, it is observed that business experts are not compatible enough to form a new market entry in business. In this kind of situation, the business experts prefers on taking Franchise based on which entire process of business can be expanded in abroad. As a result, the global customers can get the opportunity of purchasing brands and it services. Outsourcing is one of the most innovative processes of gaining international opportunity. Kang and Montoya (2014) stated that in quest of expanding the entire business process in other geographic areas, the business experts intend to focus on selecting third party for dealing the customer support system in terms of certain amount of money. As a result, the organization does not have to invest additional resources for expanding business. By giving responsibility to the third party, the business experts can get sufficient business set up, work force strength and company resources (Eriksson et al. 2015). With the help of specific skill and competency the third party can communicate with the customers and gain profit level.
Hunt (2015) opined that the overarching term international strategy primarily signifies the process that helps the brands and its services in the global market so that international customers tend to show their interest in purchasing products. Inghams Enterprise has already gained immense popularity in the market of Australia and New Zealand for their superior quality of products and fast service method. There are three major types of international strategies that include multi-domestic, global and transnational. Multi-domestic business strategy aims to distribute its product in the foreign market though the products and services are based on local customers. Weller, Kleer and Piller (2015) commented that the company is headquartered in the original country but the business experts can expand new business set up in different foreign regions. Global business set up implies that company while introducing the product in the international market is following global strategy. The products are designed and distributed by following these methods with the help of which global customers can purchase their brands and services. In case of following global business strategy the business experts have to focus on product diversification and market penetration (Powell 2014). As a result, customers from various psychological backgrounds and attitudes can easily purchase the brands.
Transnational business strategy is the combination of both global and multi-national strategy. With the help of an effective transnational policy business experts intend to follow product distribution method as per the current market demand. If the economic strength of the organization is not capable enough in launching the products in international market the business experts would like to follow multi-domestic strategy (Kim, Min and Chaiy 2015). As a result, the rate of product diversification will be decreased. Products and services will be made as per the needs and demands of local customers. On the other hand, if the economic strength of the company allows the professionals in rendering immense product diversity the business experts follows global strategy (Ruhl and Willis 2017). Based on the work force strength and economic set up of the organization would have to follow which particular international strategy they want to select for expanding the entire business process.
Among three major international strategies followed by the business organizations Inghams Enterprise tends to follow transnational strategy which is the combination of both global strategy and multi-domestic strategy. When the organization will focus on selling chicken and turkey the business experts can focus two regional markets primarily that are Australia and New Zealand. Hollender, Zapkau and Schwens (2017) stated that when the business experts focus on increasing their product diversity for drawing attention of the global customers the business experts follow global strategy.
As per business structure of Inghams Enterprise, the most appropriate market entry mode that the business experts should follow includes joint venture. Protsch and Solga (2015) commented that joint venture is one of the most effective parts of partnership with the help of which the organization builds a partnership with independently managed company. Two companies by accumulating their resources tend to work together in the international market. In order to make a new market entry as an individual Inghams Enterprise would have to face immense challenges in creating new brand image and identity. Joint Venture would enable the business experts of Inghams Enterprise in making partnership with an established company so that Inghams Enterprise does not have to face new market threat.
In addition, by using this market entry mode company can use their accumulated workforce strength. As a result, the customers can get an effective response from the service providers (Aguirregabiria and Suzuki 2014). On the other hand, Inghams Enterprise would be able to create their brand image by making partnership with company of China which already exists in the market. While choosing joint venture strategy Inghams Enterprise may have to face challenges in making strategic decision due to the cultural differences between two organizations. However, by implementing effective mitigation strategy and proper training and development session the business experts can overcome the challenges.
The most inappropriate market entry mode that Inghams Enterprise should not follow implies direct export. It is undeniable that by exporting products in other geographic location the organization can get the scope of expanding their entire process of business in multi-national countries. Melitz and Redding (2015) stated that products can be introduced in the international market. Consequently, the number of target audience becomes high with the help of which organization can gain immense profit level. However, in this case direct export method seems to be inappropriate due to several reasons. With the help of direct export method the organization do not get the opportunity to launch their brand in the other geographic boundary (Aguirregabiria and Suzuki 2014). As a result, this particular method is considered as ineffective for gaining image and recognition of Inghams Enterprise. In this kind of situation, it is however undeniable that the organization should follow such kind of market entry strategy with the help of which the business experts can get the opportunity to enhance brand image and identity.
After evaluating the entire study it can be observed that Inghams Enterprise has aimed to expand their entire process in other geographical backgrounds. After rendering a satisfactory capital in supplying poultry services the organization has focused on enhancing their revenue growth by expanding the entire business process in other geographic locations. Ruhl and Willis (2017) opined that by exporting products in other geographic location the organization can get the scope of expanding their entire process of business in multi-national countries. Inghams Enterprise has already gained immense popularity in the market of Australia and New Zealand for their superior quality of products and fast service method.
After making in-depth strategic evaluation some of the major recommendations can be provided:
Reference:
Aguirregabiria, V. and Suzuki, J., 2014. Identification and counterfactuals in dynamic models of market entry and exit. Quantitative Marketing and Economics, 12(3), pp.267-304.
De Villa, M.A., Rajwani, T. and Lawton, T., 2015. Market entry modes in a multipolar world: Untangling the moderating effect of the political environment. International Business Review, 24(3), pp.419-429.
Diestre, L., Rajagopalan, N. and Dutta, S., 2015. Constraints in acquiring and utilizing directors’ experience: An empirical study of new?market entry in the pharmaceutical industry. Strategic Management Journal, 36(3), pp.339-359.
Eriksson, K., Johanson, J., Majkgård, A. and Sharma, D.D., 2015. Experiential knowledge and cost in the internationalization process. In Knowledge, Networks and Power (pp. 41-63). Palgrave Macmillan, London.
Hollender, L., Zapkau, F.B. and Schwens, C., 2017. SME foreign market entry mode choice and foreign venture performance: The moderating effect of international experience and product adaptation. International Business Review, 26(2), pp.250-263.
Hunt, R.A., 2015. Contagion Entrepreneurship: Institutional Support, Strategic Incoherence, and the Social Costs of Over?Entry. Journal of Small Business Management, 53, pp.5-29.
Inghams. 2018. Our history [Online]. Available from https://inghams.com.au/corporate/our-history/ [Accessed as on 20th August 2018].
Kang, W. and Montoya, M., 2014. The impact of product portfolio strategy on financial performance: The roles of product development and market entry decisions. Journal of Product Innovation Management, 31(3), pp.516-534.
Kim, N., Min, S. and Chaiy, S., 2015. Why do firms enter a new product market? A two?dimensional framework for market entry motivation and behavior. Journal of Product Innovation Management, 32(2), pp.263-278.
Laufs, K. and Schwens, C., 2014. Foreign market entry mode choice of small and medium-sized enterprises: A systematic review and future research agenda. International Business Review, 23(6), pp.1109-1126.
Melitz, M.J. and Redding, S.J., 2015. New trade models, new welfare implications. American Economic Review, 105(3), pp.1105-46.
Powell, K.S., 2014. Profitability and speed of foreign market entry. Management International Review, 54(1), pp.31-45.
Protsch, P. and Solga, H., 2015. How employers use signals of cognitive and noncognitive skills at labour market entry: insights from field experiments. European Sociological Review, 31(5), pp.521-532.
Ruhl, K.J. and Willis, J.L., 2017. New exporter dynamics. International Economic Review, 58(3), pp.703-726.
Sleuwaegen, L. and Onkelinx, J., 2014. International commitment, post-entry growth and survival of international new ventures. Journal of Business Venturing, 29(1), pp.106-120.
Weller, C., Kleer, R. and Piller, F.T., 2015. Economic implications of 3D printing: Market structure models in light of additive manufacturing revisited. International Journal of Production Economics, 164, pp.43-56.
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