Barrett Farm Foods: A Small Firm's International Launch

Group 36Kim Sul-heeOh Sang-unChoi Min-cheol

Contents

1. Food Industry

2. About Barrett Farm

3. Case Questions

Food Indus-try

Food Industry

•Definitions

▫The U.S. food system is a complex network.

▫Links include makers.(such as providers of transportation and financial ser-vices)

▫System includes the food marketing indus-tries.

Food Industry

•Definitions

▫In the UK, the food industry is extensive.

▫The largest manufacturing sector in the UK.

Food Industry

•Food processing

▫The methods and techniques used to trans-form raw ingredients into food.

▫Takes clean, harvested or slaughtered and butchered components and uses them to produce marketable food products.

Food Industry

•Retail

▫Populations around the world concentrating in urban areas.

▫Food buying is increasingly removed from all aspects of food production.

▫The supermarket is the defining retail ele-ment of the food industry.

▫Restaurants, Cafes, Bakeries and Mobile trucks are also ways.

About Barrett Farm

Barrett Farm Foods• Sells nuts, cereal bars, garlic, ginger, dried

fruits, and honey throughout Australia.• a healthy rate of growth over the past decade• its sales reached USD $215 million last year. • well known in the domestic market

(international experience has been limited)• Barrett has relied on intermediaries in Aus-

tralia(for completing export orders)

• Austin is enthusiastic about substantially ex-panding the export business

Recognizing an Opportunity

•Austrade has highlighted the potential of Australian foodstuffs exports.=>Dilemma: Much of current exports are primarily raw foods, not processed foods.

• If just 10 percent of processed food value-adding were done in Australia, the country's balance of trade would improve.

•Austrade believes meat, cereal, sugar, dairy commodities, and marine products have the most potential for food processing.

Case Questions

1. Do you see any problems with Philip Austin's plan for European expansion? Do you support his entre-preneurial approach to exporting? What should be the features of a more systematic approach to ex-porting?• Philip Austin could have two of the following is-

sues in the European market.• First, BFF had little experience in export.• Secondly, BFF has to solve many export sector

problems. • Europe also has many differences in national

tastes, regulations, and market structures.• While Australians love Vegemite-a brown, salty

breakfast spread made from yeast-the product en-joys little popularity outside Australia.

2. Why did Barrett choose exporting as its entry strategy for Europe, as opposed to foreign direct investment or licens-ing? What advantages does exporting provide to Barrett? What are the potential drawbacks of exporting for Barrett?

• Physical characteristics should be considered when developing an export-strategy.

• BFF sells nuts, cereal bars, garlic, ginger, dried fruits, and honey.(They do not goes bad easily.)

• They weights less.

=>BFF made the right choice in this repect.

2. Why did Barrett choose exporting as its entry strategy for Europe, as opposed to foreign direct investment or licens-ing? What advantages does exporting provide to Barrett? What are the potential drawbacks of exporting for Barrett?

• The export-strategy of BFF for entry into foreign markets may have serveral problems.

• First, They have poor opportunity for experienc-ing local markets.

• Second, export-strategy is sensitive on the trade barriers such as tariffs or exchange rates.

3. What challenges can Barrett expect in its export drive? What types of new capabilities does the firm need to acquire to manage its export transaction?

• BFF has to consider packing, insurance, tariffs, taxes, storage and decide what profit margin they want.

• BFF needs to understand the foreign market.

• Comprehensive market data and insightful market analysis help BFF make informed, intelligent decisions.

• BFF might have to hire market research firm or Austrade to analyze the European markets.

4. How should Barrett choose between direct and indirect exporting? What are the ideal characteris-tics of European intermediaries for Barrett? Where can Barrett turn for finaning its export sales?

• Indirect exporting could be better.

• BFF has little experience in exporting products.

• They have to learn how to selling goods overseas successfully.

• In the long run, BFF should show its exporting competence such as exporting department.

5. There are already numerous companies selling processed foods in Europe. What can Barrett do to compete successfully against these firms?

• BFF should modify its own products considering the European markets.

• BFF has focused on Austrailian markets.• There is no guarantee that BFF could be a successful

company in  the European markets.• They have to plan new marketing strategies for the

European markets.• The fact is that BFF have new competition to face in

the European markets.• BFF should build a long-term relationship with the

consumer.

6. Why does Austrade want Australian firms to focus on exporting procesed foods? Why is exporting high value-added products good for Australia?

• Processed foods can create significant added value by creating jobs for Austrailians.

• Much of current exports are primarily raw foods, not processed foods.

• Just 10 percent value-adding were done=> The country's balance of trade would im-prove.

• Austrade believes meat, cereal, sugar, dairy commodities, and marine products have the most potential for food processing.

Reference

International Business / PEAR-SON1

en.wikipedia.org/wiki/Food_industry2

Thank You