Barrett Farm Foods (BFF) is an Australian company that sells nuts, dried fruits, and other foods domestically. It is considering expanding exports to Europe. While BFF has experienced domestic growth, it has limited international experience relying on intermediaries. BFF's owner is enthusiastic about substantially growing exports. However, directly exporting to new international markets like Europe presents challenges as BFF will need to acquire new capabilities to manage exports and understand foreign regulations, tastes, and market structures. Choosing the right entry strategy and intermediaries will be important for BFF to compete against other processed food companies in Europe.

1. Barrett Farm Foods:
A Small Firm's International Launch
Group 36
Kim Sul-hee
Oh Sang-un
Choi Min-cheol

2. Contents
1. Food Industry
2. About Barrett Farm
3. Case Questions

3. Food Industry

4. 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.

5. Food Industry
• Definitions
▫ In the UK, the food industry is extensive.
▫ The largest manufacturing sector in the UK.

6. 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.

7. 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.

8. About Barrett Farm

9. 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

10. 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.

11. Case Questions

12. 1. Do you see any problems with Philip Austin's plan for
European expansion? Do you support his entrepreneurial
approach to exporting? What should be the features of a
more 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.

13. 2. Why did Barrett choose exporting as its entry strategy for
Europe, as opposed to foreign direct investment or licensing?
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.

14. 2. Why did Barrett choose exporting as its entry strategy for
Europe, as opposed to foreign direct investment or licensing?
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 experiencing local
markets.
• Second, export-strategy is sensitive on the trade barriers
such as tariffs or exchange rates.

15. 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.

16. 4. How should Barrett choose between direct and indirect
exporting? What are the ideal characteristics 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.

17. 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.

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

19. International Business / PEARSON1
en.wikipedia.org/wiki/Food_industry2

20. Thank You