Managing In A Global Economy Fall 2021 Lesson 10 11 12 Final

Managing In A Global Economy Fall 2021lesson 10 11 12 Final Case

We have selected an industry, examined it from various perspectives, identified opportunities and challenges, and now we assume the role of a CEO of a company within that sector. The focus is on devising a viable international expansion plan to counter slow growth, utilizing limited foreign experience and an understanding of market dynamics. The plan must consider organizational structure, marketing strategy, financial needs, and entry mode, whether through exports, foreign direct investment (FDI), or joint ventures. The goal is to maximize opportunities and offset challenges to regain market share in a competitive and slow-growing environment.

Paper For Above instruction

Introduction

The industry selected for this case is the frozen poultry sector, which has experienced moderate growth globally. This industry is characterized by steady demand driven by increasing awareness of protein consumption and convenience foods. Despite its growth, the sector faces intense price competition, regulatory challenges, and fluctuating feed costs. These factors have led to slow growth rates, compelling companies to consider international expansion strategies to enhance market share and profitability. My company, a mid-sized frozen poultry producer, operates primarily domestically and lacks extensive foreign experience but recognizes the necessity of expanding abroad to remain competitive.

Discussion

As the CEO, the strategic focus is on expanding into international markets via a phased approach combining exports and foreign direct investment. Given our company's limited foreign experience and organizational simplicity, the initial phase will prioritize export operations aimed at testing foreign markets and understanding consumer preferences. This low-risk approach allows us to build market insights and establish distribution channels without significant capital commitments.

The key opportunity lies in rising global demand for affordable and convenient poultry products, especially in emerging markets with increasing urbanization and rising disposable incomes. Moreover, countries experiencing economic growth offer potential customer bases where our products can fill a supply gap, given the current global demand-supply imbalance in poultry. However, challenges include compliance with varying international standards, tariffs, and logistics complexities that could threaten profitability.

To capitalize on opportunities, the company will adopt a home replication strategy initially, selling products under its existing brand through international distributors. This model allows leveraging existing marketing and operational knowledge while minimizing costs and organizational complexity. As market understanding deepens, a move to establish local production facilities (FDI) will be planned to reduce logistics costs and increase responsiveness to local demand.

Organizationally, our current simple functional structure (sales, marketing, production, finance) will require modifications to effectively manage international activities. We will create an international division to oversee market development, compliance, and logistics. This division will coordinate with existing functions while focusing on developing local partnerships, managing international sales, and navigating local regulations. Such restructuring enhances focus and ensures agility in responding to diverse markets.

Financially, expansion necessitates additional resources. The company will explore funding options including reinvested earnings, bank loans, and potential investment from foreign partners or institutional investors. An initial phase involving export sales will require modest capital increases, but future FDI investments for production facilities will involve substantial capital and strategic planning. Risks include currency fluctuations, political instability, and market acceptance, which will be mitigated through hedging, diversification, and local partnership strategies.

Entry mode decisions will depend on market attractiveness and regulatory environment. Initially, exporting from our domestic plant is preferred, given our limited foreign experience and organizational capacity. As confidence and knowledge grow, we will consider joint ventures with mid-sized local firms, enabling market access, local insights, and shared risks. Partnering with firms possessing strong local market positions can provide better conditions and facilitate faster expansion.

Marketing strategy will adopt a hybrid approach—initially focusing on home replication by exporting under the existing brand, then evolving toward a global multi-product strategy as local markets mature. This phased approach aligns with our organizational capacity and risk appetite while maximizing global market potential. We will also adapt products and packaging to meet local preferences and regulations, ensuring relevance and compliance.

In conclusion, our strategic plan combines phased international expansion, organizational restructuring, and careful financial planning to capitalize on emerging opportunities while managing inherent risks. The initial export-focused approach minimizes exposure, allows learning, and lays the groundwork for future FDI and local manufacturing. The chosen strategy balances risk and reward, utilizing our limited foreign experience effectively and positioning the company for sustainable growth in a competitive global environment.

Conclusion

Our chosen strategy emphasizes an initial export-based expansion, complemented by organizational enhancements and strategic partnerships for deeper market penetration. This approach maximizes growth opportunities by leveraging emerging market demand while mitigating risks associated with limited foreign experience. The main risks include currency volatility and regulatory hurdles, which will be managed through hedging and local partnerships. This incremental method positions our company to develop a strong, adaptable international presence that supports long-term growth and competitiveness.

References

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  • Porter, M. E. (1986). Competition in Global Industries. Harvard Business Review, 64(2), 47-60.
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  • Contractor, F. J., & Kumar, V. (2009). The Multinational Firm and Its Global Expansion. Journal of International Business Studies, 40(2), 226–247.

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