The report helps in the analysis of the Agribusiness which is Nestle along with the identification of international opportunities for the food focused agribusiness. Furthermore, the different kinds of international strategies are required to be identified which will be suitable for Nestle. The different kinds of inappropriate and appropriate mode of entry are required to be analyzed by Nestle to enter the international market. Lastly, proper recommendations are required to be provided to Nestle for the future strategic direction of the Nestle Australia in the chosen international market which is Bhutan.
Australia is one of the agricultural exporters along with producer wherein more than 325300 employees are employed in Agriculture. The agriculture along with different other closely related sectors earn more than $155 billion per year and they gain more than 12% share of the Gross Domestic Product as well. The different farmers and the graziers of Australia own more than 135997 farms wherein this is covering more than 61% of the landmass of Australia as well (Schaltegger, Burrittand Petersen 2017).
Moreover, more than 64% of the farms in all over Australia belong to the state and there is a complete mix of the dry land farming along with dairy production of the different items in Australia as well. The federal policy of the government for the scientific research in Australia named CSIRO has tried in forecasting that that the change in the climate will help in decreasing precipitation over Australia and this helps in improving the overall quality of the agriculture as well (Hitt and Duane Ireland 2017).
There are major agricultural products which are being sold by Australia are inclusive of fruits, vegetables, nuts along with calves and cattle as well. The different kinds of dairy products of Australian economy are the fourth most valuable product which is the agricultural export. The market of the domestic milk was highly regulated till the year 1980s and this milk was used for the domestic fresh milk sales and revenues as well. However, there are different kinds of issues which are being faced by the agriculture of Australia which is inclusive of political values, technical, economic and environmental issues which is affecting the overall efficiency of the firm in an ineffective manner.
Nestle is one of the agribusiness which is the fully owned subsidiary of food and beverages company which is situated in New Zealand and Australia. There are different kinds of business units of Nestle which is inclusive of manufacturing, marketing and sales and the technological advancements are effective in nature as well. There are different kinds of products which are being sold by Nestle is inclusive of snacks, coffee, chocolate along with cereals and this is effective in nature in managing the different kinds of aspects in an efficient manner.
There are different kinds of opportunities for Nestle while expanding their business in Bhutan. The most appropriate international opportunity which can be adopted by Nestle is Joint Venture with Wabthang Company which is one of the largest agricultural and dairy firms in Bhutan is Joint Venture aspect which will be helpful in managing their operations in the international market. The joint venture is the easiest manner of combining the different resources and expertise f the two unrelated kind of companies. There are different kinds of advantages of joint venture; there are different kinds of certain risks which is complex in nature (Jarzabkowski and Kaplan 2017).
The main advantage which can be gained by Nestle in internationally expanding their business is that Nestle will be getting a proper overview of the different new markets along with the distribution network of the agricultural business in Bhutan. This will be a completely new venture which helped in gaining new insights along with expertise of the market in an efficient manner. Furthermore, there will be sharing of the risks along with costs with the partner company in the market of Bhutan (Frynas and Mellahi 2015). In case of the joint venture business, if the joint venture fails, then both the companies in the market will be bearing the costs along with expenses and they will be supporting the losses in an effective manner (Lasserre 2017).
However, there are different kinds of disadvantages of joint venture aspect which can be faced by Nestle wherein this can be seen that the flexibility will be reduced and this will be a suffering for Nestle as there will be no such opinion of the other company in the entire process of Joint Venture.
There are different international strategies which can be adopted by Nestle while internationally expanding their market which will be helpful in managing the different kinds of aspects in an effective manner. While expanding their operations, this is essential for Nestle to diversify their product range and services in Bhutan with the implementation of Joint Venture effectively. The development of new products in the market of Bhutan can be an efficient technique which can be helpful in the growth of the firm in such kind of environment effectively (Hill, Jones and Schilling 2014).
With the implementation of global strategy, Nestle tries to sell the different kinds of products and services in the market with the help of the local purchasing power of the different individuals in the Bhutan market (Helfat and Martin 2015). While using the global strategy in the operation of the business in Bhutan, the proper survey is required to be done by them in order to understand the demand for the different dairy and other agriculture-based products used by the customers in the respective market. By analysing the political, economic, legal, environmental, social and technological aspects which are required to be addressed by Nestle in Bhutan market to gain more competitive advantage in the entire market (Meyer, Neckand Meeks 2017).
The most appropriate mode of entry which is suitable for Nestle in expanding their operations in Bhutan is the Joint Venture Strategy in an effective manner. Joint Venture is one particular kind of partnership aspect which helps in involvement of the creation of the third independently managed company in an efficient manner. While Nestle will be expanding their business operations in Bhutan, this is essential in nature for the company to understand and analyse the various kinds of operations which will help them in generating success and gain more competitiveness (Rothaermel 2015).
In this respective kind of approach, the different risks and profits are normally being shared and this will be helpful in managing the different kinds of aspects in an effective manner. The joint venture is flexible in nature as this will help in providing Nestle an opportunity to gain new kind of capacity along with expertise which will be beneficial in succeeding in the different kinds of operations (Bromiley et al. 2015).
Furthermore, with implementation of the joint venture technique, this will allow Nestle in analysing the different tastes and preferences of the customers in the market and try to gain knowledge on the technological advancements and preferences of the company effectively as well. Moreover, this can be noticed that with proper implementation of Joint Venture, this will help in providing proper access to the greater resources which is inclusive of the specialised staffs and technology which will be helpful in managing the overall effectiveness in the overall market which is competitive in nature (Galliers and Leidner 2014).
On the other hand, the most inappropriate mode of entry which can affect the sales of Nestle in the overall market is franchising strategy which can lead to the overall failure of the business in the entire competitive market of Bhutan. It can be seen that buying a franchise can a quick kind of step which will help in setting the business, however there are different kinds of disadvantages which can impact the overall profitability of the firm in a negative manner (Helfat and Martin 2015).
As from the above scenario, this can be seen and analysed that there are different kinds of presence of Nestle in all over the world; however, there are different kinds of disadvantages which can be faced by Nestle when they will be incorporating the franchising strategy in the expansion of their business in Bhutan (Meyer, Neckand Meeks 2017). Firstly, there will be differences in the cost as the cost is higher in nature than the joint venture and there can be loss to the entire company franchise which is bearable by the respective organization itself.
Furthermore, this can be seen that the franchise agreement is inclusive of the different kinds of rules and regulations along with restrictions which can be difficult for Nestle to set up their franchise in the Bhutan market (Jenkins, Ambrosini and Collier, N 2016). Secondly, there will be inclusion of capital investment in which this will be difficult for Nestle to invest huge capital along with the preparation of the legal documents can be difficult for the company in becoming more effective in franchising strategy in the entire market (Rothaermel 2015).
On the other hand, there are various kinds of regulations which is required to be adopted by Nestle in expanding their business in Bhutan and this can be difficult for them to continue their business in such a manner which will be difficult for them to be successful. Moreover, this can be seen and analyzed that there are various types of training and other related activities which will be difficult for them to support the business activities successfully ((Bromiley et al. 2015).
From the above, this can be analyzed that there are different kinds of strategies which are required to be followed in order to become more profitable in the Bhutan market. This can be seen that Nestle needs to take into consideration the different tactics which will be helpful in becoming more effective in their operations in Bhutan market as like the other markets.
References
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