Entry Strategy for a canned food brand in UAE


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The presentation suggests how a Canned food brand can enter in UAE market

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Entry Strategy for a canned food brand in UAE

  1. 1.
  2. 2. Executive Summary<br /> Asian food factory, a leading trading and distribution hub based out of Singapore is looking to expand their flagship brand , Sonnamera by entering the UAE market. Some of the factors that go into building a good entry strategy would be selecting the best Emirate to start with, choice of distributors and retailers, Market positioning and the product portfolio to start with.<br />Recommendations<br /><ul><li>The best emirate to start operations would be Dubai.
  3. 3. Target two major hypermarkets like Lulu, Carrefour and one supermarket Spinneys.
  4. 4. A big distributor with a large product portfolio and catering to the above mentioned retailers.
  5. 5. Product portfolio to have pineapples, corn , mushrooms and green peas.
  6. 6. Market positioning as a premium brand. </li></li></ul><li>
  7. 7. <ul><li>Based in Singapore
  8. 8. Amajor trading and distribution hub
  9. 9. The Asian Food Factory is within easy access to the food processing and production facilities in Asia
  10. 10. Leading supplier of canned fruits and vegetables, under the Brand Sonnamera
  11. 11. Private label solutions company to both Retail and wholesale trade
  12. 12. Product Portfolio -Tomatoes and Gherkins from India, Pineapples and Sweet corn from Thailand, mushrooms from France and Olives from Spain.</li></li></ul><li>
  13. 13.
  14. 14. UAE as a market for Canned Food<br />
  15. 15. <ul><li>Estimated annual value of the canned food market is $2.5 billion.
  16. 16. Estimated average annual growth in canned food market is 5-10 percent.
  17. 17. Percent of imported consumer-ready products is 75-80
  18. 18. Percent of locally processed foods is 20-25
  19. 19. In UAE - Abu Dhabi, Dubai and Sharjah are home for nearly 75 percent of the population and retail development
  20. 20. All major chains except Carrefour import most</li></ul> products stocked. <br />
  21. 21. Porter’s 5 Forces<br />
  22. 22. Top 3 Entry Barriers<br />
  23. 23. Factors important For A New brand<br />
  24. 24.
  25. 25.
  26. 26. Evaluation of Options<br />
  27. 27. Emirate to Start With<br />Take a license from a smaller emirate and operate from Dubai<br />Setting up a facility in Dubai<br />Pros:<br /><ul><li>Biggest consumer market for canned food
  28. 28. Majority of the corporate offices of distributors and retailers are based out of Dubai
  29. 29. Reduces the replenishment time
  30. 30. Avoids inter emirate tax</li></ul>Cons:<br /><ul><li>High cost of renting
  31. 31. High cost of living for employees
  32. 32. License cost would be high</li></ul>Pros:<br /><ul><li>License fee of smaller emirate is less
  33. 33. Cost of operating also reduces</li></ul>Cons:<br /><ul><li>Transportation cost increases
  34. 34. More coordination needed between the 2 emirates</li></li></ul><li>Distributor<br />Small Distributor<br />Big Distributor<br />Pros:<br /><ul><li>Higher bargaining power with retailers
  35. 35. Faster penetration into the market
  36. 36. Get better visibility in shelves
  37. 37. Strong Distribution network</li></ul>Cons:<br /><ul><li>High Cost
  38. 38. Demand its terms and conditions in the contract</li></ul>Pros:<br /><ul><li>Smaller distribution network
  39. 39. Less Cost
  40. 40. May have a good hold in the market for canned food products</li></ul>Cons:<br /><ul><li>Slower penetration in the market
  41. 41. Buying power to retailers</li></li></ul><li>Retailer<br />Convenience Stores<br />Big Retailer<br />Pros:<br /><ul><li>Large Customer base
  42. 42. Better market penetration</li></ul>Cons:<br /><ul><li>High listing fee
  43. 43. Upfront marketing cost
  44. 44. Buying power of retailers</li></ul>Pros:<br /><ul><li>Lowerlisting fee
  45. 45. No upfront marketing and advertising cost</li></ul>Cons:<br /><ul><li>Small customer base
  46. 46. Too many to enter together</li></li></ul><li>Product Portfolio<br />All products existing in UAE<br />Products having the highest market share<br />Pros:<br /><ul><li>Top 20% of the products would be responsible for 80 % of the sales
  47. 47. Less cost of listing</li></ul>Cons:<br /><ul><li>Unavailability of brand for certain products</li></ul>Pros:<br /><ul><li>Availability for all products
  48. 48. Build brand loyalty</li></ul>Cons:<br /><ul><li>High initial cost
  49. 49. Large inventory</li></li></ul><li>Market Positioning<br />Super Premium Segment<br />Premium Segment<br />Pros:<br /><ul><li>Continue with previous brand image
  50. 50. Higher margins</li></ul>Cons:<br /><ul><li>Difficult to get innovators for the product
  51. 51. Narrows the customer base </li></ul>Pros:<br /><ul><li>Wide customer base
  52. 52. More sales
  53. 53. Faster penetration in market</li></ul>Cons:<br /><ul><li>Difficult to move to super premium later
  54. 54. Lower margins</li></li></ul><li>Costs Involved<br />
  55. 55. Best<br />Recommendations<br />
  56. 56.
  57. 57. The <br />Way Ahead<br />
  58. 58. Sarthy Vadnerkar<br />Shriti Chhajed<br />
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