Closing Case Barrett Farm Food free essay sample

Do you see any problems with Mr. 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? Answer: Philip Austin could have two of the following issues in the European market. First, BBF had little experience in export. Secondly, BBF 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 for Europe, as opposed to foreign direct investment or licensing? What advantages does exporting provide to Barrett? What are the potential drawbacks/weaknesses of exporting for Barrett? Answer: Physical characteristics should be considered when developing an export-strategy. BBF sells nuts, cereal bars, garlic, ginger, dried fruits, and honey. (They do not goes bad easily). We will write a custom essay sample on Closing Case Barrett Farm Food or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page They weights less. BBF made the right choice in this respect. The export-strategy of BBF for entry into foreign markets may have several 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 to acquire to manage its export transactions? Answer: BBF has to consider packing, insurance, tariffs, taxes, storage and decide what profit margin they want. BBF needs to understand the foreign market. Comprehensive market data and insightful market analysis help BBF make informed, intelligent decisions. BBF 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 characteristics of European intermediaries for Barrett? Where can Barrett turn for financing its export sales? Answer: Indirect exporting could be better. BBF has little experience in exporting products. They have to learn how to selling goods overseas successfully. In the long run, BBF 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? Answer: BBF should modify its own products considering the European markets. BBF has focused on Australian markets. There is no guarantee that BBF could be a successful company in the European markets. They have to plan new marketing strategies for the European markets. The fact is that BBF have new competition to face in the European markets. BBF should build a long term relationship with the consumer. 6. Why does Austrade want Australian firms to focus on exporting processed foods? Why is exporting high value-added products good for Australia? Answer: Processed foods can create significant added value by creating jobs for Australians. Much of current exports are primarily raw foods, not processed foods. Just 10 percent value adding were done (The county’s balance of trade would improve). And Austrade believes meat, cereal, sugar, dairy commodities, and marine products have the most potential for food processing.