There is a rise of intense changes in the global agriculture business. This in turn has yield a new market reality which is more competitive and more complex than ever before. Over the last three decades, there has been an occurrence of dramatic structural changes in the agriculture sector worldwide. All this is because of economic liberalisation, increasingly shifting societies, globalisation, environmental regulation and the reduced protection of the agricultural markets. These changes have directed the emergence of the new customer bases and the consumption behaviour patterns for the agricultural supply manufacturers. In order to confront all these changes properly, a new perspective on the practices of the agribusiness and strategies is very important (Ang, Benischke and Doh 2015). It is to note that strategy refers to the potential of a company to position itself in the business market in a manner that best suits its competences and resources. However, the main aim of this report is to focus on the understanding of Strategy implementation process. The chosen corporation for this purpose is that of Grain Crop Company. It shall provide a brief discussion on this Australian Food focused Agribusiness sector and identify the international opportunities present for it in the chosen international market. The chosen market for this organisation is India. With the same, this report shall also discuss on the different international strategies that it could make use of to enter into the international markets. Furthermore, this paper shall also shed light on the most appropriate and inappropriate mode of entry to the international market for Grain Crop company. Lastly, it would provide few recommendations for its future strategic direction in the chosen international market.
India has huge opportunities to do agriculture business. The country is owned with a varied ago-climate that facilitates the production of tropical, sub-tropical and temperate agricultural commodities. It is also to note that there is an increasing demand for agricultural inputs such as fodder and feed, bio-fertilizers and inorganic fertilizers.
PESTLE analysis
a. Political analysis-
b. Economic analysis-
c. Socio-cultural analysis-
d. Technological analysis-
e. Legal analysis-
f. Environmental analysis-
It is to note that at the corporate level, companies choose one of the three global strategies to enter into international markets and they are of- multi-domestic strategy, global strategy and the transnational strategy. All these three strategies reflect the trade-offs in between the global efficiency and the local responsiveness. In order to gain a competitive edge, the companies have to devise strategies for taking the best advantage of the core competencies of theirs which are difficult for their competitors to copy in any way. However, the most suitable strategy for Grain Crop Company would be that of the transnational strategy. The transnational strategy combine the best of the global and the multi-domestic strategy in order to get local responsiveness and global efficiency (Wilkins and Huisman 2012). It is to mention that the global strategy is controlled and is centralised by the home office and it seeks to increase the global efficiency of the companies. On the other hand, the multi-domestic strategy increases the local responsiveness by providing a decentralising authority of decision-making to the local business units in every nation so that they could create the services and products that are optimised to the local markets.
The most appropriate mode of entry to the Indian market for the part of Grain Crop Company is of Partnering. Partnering is almost a necessity while entering into the foreign markets and some parts of the work such as Asian continents, it is very much required to expand the business in effective manner (De Villa, Rajwani and Lawton 2015). It could take many different forms from a simple co-marketing arrangement to a sophisticated strategic alliance for the manufacturing process. It is also to note that partnering is a very useful strategy in the markets like India’s where the culture, both social and business is comparatively different than that of one’s own because the local partners could bring the knowledge about the local market, the contacts and if in case chosen wisely, they could also bring local customers. India is the seventh largest country in the world in terms of Gross Domestic Progress (GDP) and also, it has a population of about 1.3 billion people (Tan et al. 2017). The Indian market is one of the most complex markets in the world for the best companies, both national and international ones. The businesses like Grain Crop Company that are with pre-determined mind-set along with less exposure to the international or overseas markets might find the culture of commerce in India intimidating (Ripolles and Blesa 2017). However, it is to note that it is very important for the company to identify a right partner for itself in order to successfully navigate all the prevailing complexities of the local business environment in India for new international entrants. These partner could give the business a valuable market insights on the competition, the Indian political regulation as well as the other important issues associated with any business (Marchi et al. 2014). With the same, these partners could also help Grain Crop to get introduced to the Indian networks with the reach to the target prospective clients present in India without much investment on the ground. However, it is also to mention in this context that for entraining into the Indian market, the firm has to choose relationship modes of entry because in this entry modes they have to make strategic alliances with other established firm in the area. In other words, this modes of entry also help the firm to readily know about the customers’ needs and demands concerning food types.
The most inappropriate mode of entry to the international market for Grain Crop Company is that of franchising. It is to note that franchising as a market entry mode refers to the mode where a company supplies that other companies with intangible property. This type of international market entry mode is basically useful for the companies that are with a repeatable business model such as the food outlets as these companies are very easily transferrable to the other markets. There is a very high need for being very cautious while going for franchising market entry strategy due to the fact that it could result in creating strong competition in the field of franchise.
a) India is a diverse nation that surrounds different languages, identities, religions and culture. It is very essential for Grain Crop Company to avoid making generalisation and assumptions because the consumer behaviour in India and the local practices might differ substantially from one religion to the other.
b) The company should take time to understand the industry and think very carefully regarding how it could compete with the already established local companies of same industry in Indian market.
c) The Human Resource department should be carefully make decisions in choosing their business partners and hiring people who world understand the Indian culture and the Indian market.
d) It is also very necessary to consider how the investment in India market would influence the different areas of the business, comprising of the company’s finances, supply chain, management and other areas.
e) The company should critically assess all the associated risks along with the anticipated benefits before entering the international market.
f) The company must gain the ability to understand the different strategies and market towards the specific regions as well as the income groups, i.e., the target segment.
g) The integration of the informal sector into the key business model that are followed by attaining access to the relevant networks is required.
h) Adapting their business model is very important for the Grain Crops Company to succeed in the international markets. By simply transplanting the prevailing business model to another nation has resulted in many problems for many organisations in the present era. Grain Crops should consider them as examples and must not direct itself to those paths.
i) The company should take a step to determine the method of investment that would work the best while entering into an international market like India.
j) It is to be recommended that the firm has to take care of their range and quality of products and also focus on their healthy products so that they can easily attract their targeted customers. Besides this, if they make the differentiation in the market with quality food at less cost which thus increases their customers base.
k) To increase their positioning, they have to focus on refining, enhancing and improving their investments in the field of promotion and advertising so that their vision can easily reach to the consumers.
Conclusion
From the above analysis it is to be concluded that partnering is the best mode of entry that can be used by the Grain Crop Agribusiness Company to enter into the Indian market. However, it is also to note that no one entry mode is regarded to be superior to the other ones. When a company is choosing to internationalise their operation, they would first require to decide its optimal level of commitment, control, risk, flexibility and presence. The process of choosing international market entry mode is quite difficult. The internal resources of the organisation as well as its capabilities are the other vital consideration while selecting the foreign mode of entry. Market of entry is one of the other important consideration for the company while planning to internationalise the operations. PESTLE analysis of the foreign market would help the company for gaining a better understanding of the international market environment in order to operate successfully in the market. Hence, this report has also used the PESTLE tool to assess the international business opportunities for Grain Crop in India. Lastly, there are few recommendations provided for the part of Grain Crop in order to enter into Indian market. It is to note that the scenario of Indian market has witnessed a significant and drastic change after the globalisation and the entry of the international organisations and businesses have made the customers the king who rule the market. Therefore, recommendations are made keeping this things in mind to ensure that the company is well-prepared to successfully rule over the current Indian market scenario.
References:
Altenbuchner, C., Vogel, S. and Larcher, M., 2017, October. Effects of organic farming on the empowerment of women: A case study on the perception of female farmers in Odisha, India. In Women’s Studies International Forum (Vol. 64, pp. 28-33). Pergamon.
Ang, S. H., Benischke, M. H. and Doh, J. P. 2015. The interactions of institutions on foreign market entry mode. Strategic Management Journal, 36(10), 1536-1553.
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), 419-429.
Islam, M.N., Bint-E-Naser, S.F. and Khan, M.S., 2017. Pesticide Food Laws and Regulations. In Pesticide Residue in Foods (pp. 37-51). Springer, Cham.
Marchi, G., Vignola, M., Facchinetti, G., and Mastroleo, G. 2014. International market selection for small firms: A fuzzy-based decision process. European Journal of Marketing, 48(11/12), 2198-2212.
Ripollés, M., & Blesa, A. (2017). Entry mode choices in the international new ventures context. A study from different theoretical perspectives. International Entrepreneurship and Management Journal, 13(2), 465-485.
Tan, K.G., Gopalan, S., Sharma, J. and Tan, K.Y., 2017. India as the World’s Fastest Growing Emerging Economy: How Singapore Can Be Part of This Narrative?. Prepared for presentation at the 10th India-Singapore Strategic Dialogue.
Wilkins, S. and Huisman, J., 2012. The international branch campus as transnational strategy in higher education. Higher education, 64(5), pp.627-645.
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