Market Analysis And Entry Strategies For Select Harvest In The Austrian Market

Market Analysis

Question:

Discuss About The Towards New Countries Purpose Of Growth?

Australia is the largest consumer of natural foods and dry fruits as various foods producing companies use these materials to manufacture the breakfast as dry fruits are commonly included in cereals. Select harvest is the big manufacturer of the dry fruits and other related product and it is situated in Australia. While evaluating their market, including European countries, they have expanded their business in various parts of the globe and now the organization is planning to move towards new countries for the purpose of growth.   Austria has been chosen in across the globe by reviewing the demand of the nuts and its related products there. Hence, a certain analysis will be done under this report in order to gain the knowledge in relevance with the market condition of Austria. The International marketing plan will include various sections from the purpose of expansion in the Austrian country

According to the part one of the assignment, it was observed that Select Harvest is the biggest manufacturer of dry fruits across the globe and while conducting the market research, it was analysed that Austria is the largest consumer of dry fruits and related products. Hence, Select Harvest selected the Austrian market for the purpose of business expansion. Prior Austria was used to import the same products from US market. Rather importing goods, Austrian economy was capable enough in fulfilling their demands but after the Second World War, a condition of their economy gets adverse. And due to this, they started importing dry fruits and other goods from the international markets. While selecting the particular country for the purpose of expansion, various countries such as European countries, Turkey, Germany, and other countries are the major exporters of nuts in Austria. Due to drought conditions in the United States, they failed to fulfil the demand of the Austrian people. Hence, this could be the great advantage for Select Harvest of Australia in terms of setting up their market presence in Austria (Akaka, Vargo & Lusch, 2013).

For this, Select Harvest has conducted the strategies such as market research, situational analysis, etc. In order to attain the market position in the new market conditions, an organization will perform following steps:

• Global marketing objectives: Under this stage, appropriate organizational objectives are examined in terms of the expansion. According to the targets, objectives, and goals described by management, with the help of adequate set of strategies, perfect market will be chosen for Select Harvest. In this scenario, market is already selected in the previous assignment hence; available factors in the Austrian market will be determined in order to develop their policies according to present market factors (Andersson & Xiao, 2016).
• Factors of market selection: For the purpose of market selection, certain important factors such as environmental; political, legal, tax systems, etc. need to be analysed in order to meet the standards set up by the host country and to avoid any kind of glitch in the trading activities (Ang, Benischke & Doh, 2015).
• Initial Screening: Under this, marketing team of the Select Harvest needs to perform the activity in which all the irrelevant markets will be disqualified. For performing this function, certain quality measures and standards are built up by the management of the Select Harvest in order to choose the most appropriate and adequate market for the purpose of expansion and growth. That market which will not be able to meet the criteria developed by the organization will be disqualified from the process of market selection (Angeloska-Dichovska & Mirchevska, 2017).
• Shortlisting of market: Amongst the selected markets after performing the screening method, most adequate markets will be selected. According to this scenario, consumption of nuts and its related products will be the major source through which organization will be able to analyse an adequate market for the purpose of expansion of business in the international market (Armstrong, et. al., 2015).
• Assessment and Selection: Under this step of market selection, the market will be chosen which will fulfil all requirements; standards, benchmarks, etc. built up for the purpose of expansion in the international market (Atzori, Iera & Morabito, 2014).

Select Harvest is involved in the manufacturing and distribution of nuts across the Australia and other parts of the globe. To increase the profitability of the organization, certain analysis was performed in order to determine the most suitable market to expand the business of the organization in order to enhance their profitability. Hence, while reviewing the various parts of the globe, Austria was selected on the basis of highest consumption of nuts and its related products as well as its market conditions were meeting all the policies built up by the management of the organization (Bond & Saggi, 2014).

Entry Strategies

Select Harvest has adopted the policy of SMART objectives in order to meet the goals of the organization. The current goal of the organization is expanding in Austria in order to enhance their profitability and the presence in the international market. Following are the SMART objective developed by Sleet Harvest:

• S: The objectives developed for the purpose of expansion of the business in international market, objectives should be set up on the basis of organization’s capability (Burton & Cross, 2015).
• M: The objectives set up by the organization needs to be measurable enough so that, value could be analysed from those objectives. For instance, growth of 20% in the total revenues was expected by the effect of expansion in Austrian market for Select Harvest hence; objectives set up by the management needs to be capable enough to acquire the percentage of growth expected (Cavusgil, et. al., 2014).
• A: Objectives should meet the proficiency of the organization’s members which will help them to attain targets easily.
• R: Objectives are set up on the assumptions hence; the assumption should be made on the basis of realistic market conditions (Czinkota & Ronkainen, 2013).
• T: This aspect of setting up objectives for the organization requires that those should be achievable within the adequate time frame and adequate time should also be allocated for attaining certain objectives.

This is the method through which organisation could select the alternative market entry strategy apart from an adequate way to enter into the particular market. This option is set up with an assumption of failure of option one and in those conditions that alternative option could be adopted in order to avoid the disturbance in the activities of the organization (Demangeot, Broderick & Craig, 2015).

Following are the entry mode options available with Select Harvest in order to enter into Austrian market for expansion purpose:

• Licensing: This is the most appropriate market entry mode in terms of exposing the business in the international market. This mode helps the organization to enter into the particular market legally. Under this market entry mode, documentation part is necessary and along with the documentation, Select Harvest needs to submit all the details including their initial capital investment, number of employees exported from their country, etc. to the authorised body of Austria in order to maintain the transparency as well as to remove the disturbance in the trading activities (Eteokleous, Leonidou & Katsikeas, 2016).
• Direct Exporting: Under this mode of entry, Select Harvest can send their products as per the demand or the order in Austria. For this, they need to contract with a mediator or the firm involved in the same business as of Select Harvest.
• Franchising: This mode of entry requires adequate goodwill in the international market. This is trending entry mode in the international market. Mostly adopted by food chain industries and in this process, franchisees need to pay certain amount of money in the form of fees, royalty, etc. against the permit given by franchiser to use their trademarks, copyrights, etc. (Greckhamer & Gur, 2015).

As Austria has been selected amongst the various countries of globe for the purpose of expansion and to enhance the profitability of the organization, strategies such as SMART objectives and another set of marketing techniques need to be adopted for the purpose of expansion in the Austrian market.

For the purpose of taking entry in the Austrian market, the most suitable option will be licensing because it provides the organization official license to enter the market and for performing the trading activities. In certain situations such as Austrian government does not provide the permit to the organization to enter into their market. Hence, in such cases, organization needs to be ready with an alternative option and that alternative option will be direct exporting. This market entry option will require contacts in the host country in order to analyse the demand of the nuts and its related products and then as per the demand of the products produced by Select Harvest in the host country, exporting procedure will be conducted (Choi & Yeniyurt, 2015).

Under this step, Select harvest needs to adopt those strategies through which organization will be able to establish its market position. Apart from this, organization needs to adopt some effective promotional as well advertisement strategies in order to develop an efficient image in the Austrian market. There are certain approaches, through which organization will be able to set up its position in the new market conditions i.e. using product’s characteristics, price-quality approach, applications approach, product-user approach, product-class approach, cultural symbol approach and competitive approach (D. Banker, Mashruwala & Tripathy, 2014).

Amongst these approaches, Select Harvest can use price-quality, product’s characteristics approach and the competitive approach in their operations to set up their effective and efficient image in Austria.

Positioning Strategies

Focus, cost leadership and the differentiation are three approaches of generic strategies and these were invented by Michael Porter in 1985 with a view to gain some competitive advantage.

• Focus: According to this approach of generic strategy, organization needs to focus on the characteristics of the product to gain the competitive advantage. In other words, organization needs to analyse its competitor products’ specialties and as per that, more enhanced product should be manufactured in order to increase the demand for the products (Fletcher & Crawford, 2013).
• Differentiation: Providing something more or unique from the competitors helps the organization to gain competitive advantage. Adopting this approach, organization could provide some attractive offers and additional benefits on the same price will help the organization to gain competitive advantage.
• Cost leadership: According to Tanwar (2013), Select Harvest needs to reduce its manufacturing cost by adopting advanced techniques. There are two options available in this technique for increasing the sales and demand of the product by reducing the selling price by cutting their cost of the product or by reducing their profit margins. Adopting both these techniques will help the organization to gain competitive advantage in Austria.

As per the scenario of Select Harvest Company of Australia, it is recommended that they should enter into the Austrian market through official entry procedure i.e. licensing. From the perception of keeping the alternative market entry strategy, direct exporting has been recommended.

Through reviewing the political conditions and the other relevant factors including micro and macro environmental factors of Austria, it has been recommended that this country is economically strong, safe and free from political risk factors. Rather suffering from recession, economic conditions of Austria are not affected and being a member of European Union is the biggest advantage in terms of expanding their business.

After reviewing the conditions of Austrian market, it is suggested to Select Harvest that using product’s specifications and the price-quality approach of positioning strategy will be most adequate and result oriented in terms of setting up effective position in the Austrian market.

Austria is a well-developed nation and their economic conditions are going in positive way except recession conditions. Hence, recommendations for Select Harvest in terms of expanding their business in Austrian market will be done through adopting cost leadership and focus approach should be adopted in order to gain the competitive advantage.

Conclusion

In the limelight of aforesaid report, international marketing plan has been designed for Select Harvest for the purpose of expansion of their business Austria which is a member of European Union. They are involved in the prediction of nuts and its related products whereas Austria is the country with huge demand for nuts. Nuts and its related products are used in Austria for making cereals and breakfasts. In order to enhance the profitability of the organization through expanding in international markets, organization has adopted some effective marketing strategies. Additionally, entry modes were discussed in order to enter into Austrian markets, recommendations were also provided to the Select Harvest in terms of adaptation of the strategies for the purpose of expansion of the business in international market.

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