Closing Case: Barrett Farm Foods Essay Example

to, or they can also increase its operations in certain country after “experimenting” with exporting, and then investing in foreign direct investment. Some of the disadvantages of exporting are that the company would be very sensitive to tariffs and other trade barrier, would also be sensitive to exchange rate fluctuations, and it is harder to adapt the products to different consumer needs, since the company will not be fully immerged in the foreign country.

The challenges involved in exporting are the same of any other international operation; there are commercial risks, political risks, cultural risks and currency risks. In order to be prepared to face these risks the company would indeed need to invest and create an export team, hiring and training employees in international operations. The team will require skills in areas such as product development, logistics, finance, currency management, foreign languages and cross-cultural skills.

First of all Barrett needs to think on how much they are willing to invest in this European expansion; how much risk do they want to take?; and maybe most important, how much control of their products do they want to have? After answering these questions Barrett would be able to decide between direct or indirect exporting. In my opinion, Barrett should start its European operations by indirect exporting, so they can first measure the degree of receptivity that their products have there.

Then, according to performance, they could invest even more or give up. There are important characteristics that Barrett should consider while deciding which intermediaries to choose. First of all it needs to be someone or some company that they trust; trust is the

most fundamental thing in a business partnership. Also Barrett should consider organizational strengths; their reputation among consumers and if they have important connections with influential people in the country and with the government. Also the intermediary knowledge about the products is very important, and how well can they sell it? And also another important factor to analyze is if the intermediary also sells competitors’ products and if they are willing to have exclusivity with Barrett Foods in the food business.

In terms of financing, the best way to perform international transactions like that is by hiring an international bank services to manage the financial operations, so they can make sure that they get paid by their products. The payment transaction should be made through a letter of credit between Barrett’s bank and the importer’s bank.

In order to compete successfully, Barrett should come into each country in Europe prepared to win, outworking the competition and gaining market share. In order to do so, first of all they need to make sure they choose the right partner; the one that is influential and will open the market for Barrett’s products in the country. Also Barrett needs to make sure that their products is compatible in terms of price and quality, and at the same time adapted to Europeans’ needs, tastes and preferences.

The food industry in Australia has great significance in terms of its contribution to the national economy, its crucial importance in regional development and its place in our history and culture. Australia’s food processing sector is a particularly important part of Australia’s overall food production. It has been growing at a

very healthy rate over the last decade, and today trade in processed food products is growing at twice the rate of bulk commodities, making up 20 per cent of the manufacturing industry. The sector also accounts for around 18 per cent of employment in the manufacturing sector.