Going International: Barrett Farm Foods

Firms are tasked with making decisions regarding the direction they should take to increase their revenue and profitability levels. The focus of this paper is to identify the major considerations that firms should embrace when making decisions regarding international operations and expansion into the foreign markets. The paper describes the existing problem and identifies the major causes of the issue. It also elaborates on the alternative approaches of solving the problem. The paper evaluates the identified options regarding their advantages and their limitations.

It will also select various alternatives that should be integrated to solve the problem from the perspective of Barrett Farm Foods. The paper also describes the implementation and contingency plans that Barrett Farm Foods should utilize regarding the export program.

Understanding the Problem

Barret Farm Foods is the sixth biggest food company in Melbourne, Australia. Philips Austin is the company’s general manager. As a foodstuff firm, Barrett Farm Foods has in the previous years increased profits in terms of its chain distribution, which includes bulk agricultural products and processed foods.

Additionally, the firm focuses on the distribution of honey, dry fruits, macadamia nuts, garlic, and cereal bars. These products are majorly distributed in the Australian market, with none of them being exported. This means that the firm depends on export intermediaries such as sales agencies and distributors to undertake its operations. The reason for using these parties is that they are properly connected with the international market. However, this was a concern that was raised by the trade-promoting agency for the Australian government, Austrade.

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Austrade indicated that since the products in the foodstuff sector were appropriate, Barrett Farm Foods was capable of increasing its performance, especially if it ventured into the international market. The major reason was that as illustrated by the agency, most of the food firms in the Australian market dealt with raw and fresh food products, instead of processed foods, which have a higher potential for export in comparison to unprocessed food products. Further, Austrade indicated that even though this improved by only 10%, there would be significant improvements in Australia’s balance of trade. Hence, the agency suggested that food companies in Australia should process their food items prior to exporting them. For example, it suggested that raw grains should be processed to bread and other bakery products then export them to foreign markets, instead of exporting the as raw grains. Also, marine products, sugar, cereals, meat, and dairy products were identified as the products with the most potential to be exported. Based on this information, the problem was the inability of firms in Australia to export their products to the foreign markets, majorly because most of their products existed in raw form.

Multiple Causes of the Problems

As identified in the previous section, the problem is the inability of the foodstuff firm to effectively tap into the international market via exports. The issue has various triggers, which can be mitigated to help in improving the country’s balance of trade. A major cause of the problem is the nature of the firm’s food products. Precisely, the products are highly perishable, which makes it difficult for them to reach the foreign markets in consumable state. The other issue is that some of the managers at the company did not possess vital internal expertise needed to ensure that the export business would be a success. Organizations require excellent human resources and leadership to ensure that they succeed in the nature of their operations. The firm’s managers held that the export business needed the firm to be involved in certain formulated policies. The various processes would help in the facilitation of export operations, among the obtaining payment from overseas customers, documentation, and other techniques needed in shipping (Pickernell et al., 2016).

These were not present in the company, thereby making its wish to export the products almost impossible. They also indicated that the venture would mandate the firm to hire and train more human resources. As suggested by Chabowski et al. (2018), companies are mandated to ensure that they have outstanding personnel to be in charge of exportation processes. The other cause of the problem is the increased demand for labor. For Barrett Farm Foods and other relates firm to ensure that they provide adequate supply of products in the domestic and international market, labor force should be in adequate and constant supply. An increase in the firm’s demand in the labor market means that the firms need more capital for them to survive.

In addition, low prices in the international market is another reason why firms operating in the food industry are unable to succeed in exporting their products. Barrett Farm Foods and other firms in Australia require higher profits for them to sustain how they exist in the international market. Low prices are also a reason for the problem. The reason is that the provision of low prices discourages the firms from exporting their food products. Pricing is a major factor that affects how organizations create their business model (Lancaster & Massingham, 2017). The issue of currency fluctuations can be a cause for not engaging in the export business for foodstuff firms in the Australian perspective. The reason is that the currency rates in certain foreign countries might be lower than the expectations of the firm. This makes it challenging for organizations to venture in exporting their products.

Alternative Solutions for the Problems

The inability for Barrett Farm Foods and other food firms in Australia to export their products to the international market denies the organizations the opportunity to increase their products and distribute their products to the international market. Hence, it is necessary for such firms to identify appropriate solutions to the issues. This can be within the firm or through the use of government agencies and other institutions. Solving the issues is fundamental as it would ensure that the companies expand their markets and increase their revenue (Zhao et al., 2019). In the presented scenario, a major solution is evident in how the firm’s general manager attended the food industry fair in Germany after going through a report presented by Austrade. During the fair, the manager was able to learn various things that would be incorporated in the company.

Based on the aspect of attending the trade fair in Germany, a major solution is identifying potential partners to help the firm in its export venture. At the trade fair, Austin marketed the firm’s products and identified two potential clients who demonstrated interested in presenting the products in their countries (Standa and Fauchon). The firm also succeeded in identifying an individual who was willing to represent the organization at the European Union. Also, the manager for the company established a task force, which included three members from the top management. The task force played a crucial role in ensuring that export aspects of the firm were dealt with appropriately. Even though the task force had similar enthusiasm with the one depicted by the manager, lack of optimism prevented the plan from succeeding.

Another potential solution is the creation of appropriate policies to assist regulating the export and import sectors in Australia. The regulations would help improve the competitive nature of export products, thereby improving the export segment. The regulations include the use of a supply side and a deflationary fiscal policy. The former is vital in improving overall production, competitive and attractive of products from food companies in Australia. These actions would help in ensuring that the products are widely recognized and accepted in the international market perspective. The formulation of a deflationary fiscal policy would assist to decrease overall expenditure by the country, thereby reduce the government’s expenditure in the export market. The food production and processing firms, including Barrett Farm Foods, should ensure that the products they plan to export are appropriately marketed through the use of various marketing strategies. The rationale for this point of view is that marketing plays a fundamental role in creating awareness about certain products.

It also helps to inform potential customers about the benefits of using a particular product. Further, marketing of the products would help in ensuring that potential clients understand where to obtain the required products. With advancement of technology across the world, it has become relatively easy to market products through the use of different platforms. For instance, social media forums have become crucial in marketing interventions. They include Instagram, Twitter, and Facebook. The firms can also create websites to help in describing the nature of products they sell. This would help to attract large number of potential clients. Advertising through various media channels including print media, TV, and radio would enable the firm’s products to be sufficiently marketed (Felix et al., 2017). The companies can also identify potential market routes to sustain them in the international trade. The routes are necessary as they would identify how the export program for the firms will be undertaken. The route can be via the use of a joint venture in the foreign country, directly, or exporting through intermediaries in the form of sales agents and distributors.

Assessment of the Possible Solutions

Export is a major channel of revenue generation for different countries. Countries are tasked with the formulation of relevant strategies to ensure that their export sector is a success. As demonstrated in the problem analysis, Australia’s food industry segment has an issue when it comes to exporting their food products. The implementation of the various solutions necessitates that the firms should critically evaluate each solution and identify the most appropriate implementation approach. For instance, marketing is one of the approaches that can be used in improving the country’s exports associated with food products (Felix et al., 2017). Available media forums and social media can be applied in marketing. The reason for selecting social media marketing is that in the current era of digitization, many individuals utilize social media.

This increases the potential for social media advertisements to reach high numbers of people. Social media would be appropriate as it does not entail the use of huge amounts of finances. Getting loyal clients through social media is feasible because many individuals are familiar with how social media operates. There are certain issues associated with the use of social media in advertising. For instance, there are many companies that use social media to advertise their products. This means that Barrett Farm Foods and other companies in Australia will face stiff competition when attempting to lure potential customers. Social media platforms also require constant monitoring in terms of evaluation of progress. This implies that the firm has to commit a lot of resources, in terms of time and human resources.

As suggested, the creation of a task force is an appropriate approach for promoting exportation from Australia’s food sector. The reason is that the task force includes the management of Barrett Farm Foods and have outstanding experience. However, the major challenge associated with this approach is that the team members in the task force do not have the same vision as the management. This makes it challenging for the task force to succeed in its mission. There is a need to have a common vision between different teams and individuals in the achievement of formulated objectives. Other solutions identified include the formation of policies and quotas. This program is appropriate as it identifies necessary improvements that can be carried out in the firm and the entire Australian sector. The solution is beneficial as it would help in reducing the import expenditure and reduce inflation rates. However, the solutions related to policy formation are detrimental as they would imply that the firm have to possess the required internal expertise for handling the entire process, something that Barrett Farm Foods does not possess.

Selection of the Solutions to Integrate

Based on the evaluation of the various solutions, each of the foodstuff firms in Australia can identify a solution which is most suitable for their operations. In the context of Barrett Farm Foods, the firm does not have adequate internal human resources to help in handling the export program. This means that it has to obtain the relevant human resources for the task. A fundamentals strength is that most of the products are not found in abundance in the international market. Barrett Farm Foods should capitalize on this niche by ensuring that it hires the required personnel to facilitate the export program. Afterwards, it should focus on marketing their products through social media platforms. The company should also decide on the most suitable market route that it should use in the exportation program. The use of this combined solution would ensure that the firm creates a functional export program, thereby increasing its profitability.

Implementation and Contingency Plans

After identifying a problem, it is vital to create implementation plans and a contingency plan to help in dealing with issues that may occur in the course of implementation. In the case of Barrett Farm Foods, the implementation should start by obtaining individuals with the required levels of expertise to deal with the export program that the firm decides to undertake. The firm should survey the potential markets for its products and identify the markets with the largest possibility to work out properly. It should also consider the legal aspects and policies on the export of identified food products. There should be created a task force including the firm’s management and other human resources. The task force will help in evaluating the various policies and hiring talented personnel to help in the implementation of the exports program. A suitable market route will be identified and evaluation of direct selling as it will ensure that the firm obtains maximum profitability.

A contingency plan serves as an optional plan that can be used in case the main plan does not go as planned (Rezaei Soufi et al., 2019). A contingency plan for Barrett Farm Foods will be to seek help from the government and other trade agencies in Australia, including Austrade. This will play a role in ensuring that the firm obtains relevant recommendations on the major concerns. An alternative contingency plan is the creation of a joint venture with other food firms. This would help in ensuring that the firms’ management teams collaborate to identify how the export program can optimally be accomplished (Harrigan, 2017).

Conclusion

The process of deciding how to enter the international market is complex. It requires firms to analyze why they have not been able to penetrate the market in the past. It also requires companies to identify the market route they should use when entering the foreign market. Firms should also embrace appropriate marketing interventions to enter the international market. Barrett Farm Foods would succeed in the market if it increases the capacity of its human resources. It should also seek the opinions of experts in the international business. When planning to implement the export program, it is imperative for Barrett Farm Foods to have an appropriate contingency plan to utilize in case the preferred alternative does not work out as expected.

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