Barrett Farm Foods:A Small Firms International LaunchGroup 36Kim Sul-heeOh Sang-unChoi Min-cheol
Contents1. Food Industry2. About Barrett Farm3. Case Questions
Food Industry• Definitions ▫ The U.S. food system is a complex network. ▫ Links include makers. (such as providers of transportation and financial services) ▫ System includes the food marketing industries.
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 transform 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 element 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 Australia (for completing export orders)• Austin is enthusiastic about substantially expanding 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 countrys balance of trade would improve.• Austrade believes meat, cereal, sugar, dairy commodities, and marine products have the most potential for food processing.
1. Do you see any problems with Philip Austins plan forEuropean expansion? Do you support his entrepreneurialapproach to exporting? What should be the features of amore systematic approach to exporting?• Philip Austin could have two of the following issues 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 enjoys little popularity outside Australia.
2. Why did Barrett choose exporting as its entry strategy forEurope, as opposed to foreign direct investment or licensing?What advantages does exporting provide to Barrett? What arethe 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 forEurope, as opposed to foreign direct investment or licensing?What advantages does exporting provide to Barrett? What arethe 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 experiencing 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 toacquire 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 indirectexporting? What are the ideal characteristics of Europeanintermediaries for Barrett? Where can Barrett turn forfinaning 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 sellingprocessed foods in Europe. What can Barrett do tocompete 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 onexporting 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 countrys balance of trade would improve.• Austrade believes meat, cereal, sugar, dairy commodities, and marine products have the most potential for food processing.
1 International Business / PEARSON 2 en.wikipedia.org/wiki/Food_industry