Expansion into international market: solutions and strategies.
The organic farming has the wind in one’s sails since several years: market and superficies growing. In Wales, an organic milk product company was created since a few years. Before, producing organic milk, this company had produced traditional milk; this willingness has chosen to be good for the health by developing the nutritional benefits. It was the beginning of a new line of conduct for the company. DAIONI is very present on the Welsh and British market. Today, DAIONI Company wants to expand into an International Market. First of all, DAIONI choose to export in the Netherland because it is a country which is in development for the consummation in organic products. Johanson and Vahlne (1997) discussed that “the lack of knowledge is an important obstacle to the development of international operations”. Therefore, this report analyzes DAIONI’s capabilities and also global and business environment of the Netherlands using appropriated frameworks.
The Country chosen
Firstly, the company has to choose a good country to expand their market, to determine their objectives and expectations. The Netherlands is an interesting market because the organic products represent only 3% of Netherlands foodstuffs market. The production can’t follow the demand to supply the shop and come up to an export’s expectation.
Lots of products know a fast-growing even if they have a weak market share. It means that the Netherlands’ market offers of interesting business opportunities in years coming.
As the local production cannot answer to the country’s demand, therefore it is necessary to complete the supply with importations.
The organic market in Netherlands is more or less new, so there are still lots of things to do. Some organic products which come from overseas market can find interesting outlets on Netherlands’ market.
The Global Environment
As a starting point, this report introduces the trend map to have a global vision of the world’s environment. This vision allows to the objectives that need a company to expand in the international market.
Aftermath of this global vision, this report will consider the PESTEL analysis for the Netherlands because there are many factors that will affect the decisions of all organizations. Political, Economic, Social, Technological, Environmental and legal factors have to be considerate by the company.
Political: the European Union has established some courses of action, purpose-build the organic production development based on information, States aid effectiveness, improvement and reinforcement of community norms applicable to organic production, importation and inspection requirements.
Economic: The Netherlands are noted as a stable economy (industrial relations, moderate unemployment and inflation). In 2010 its Gross domestic product (real growth rate) has increased by 1.7% while in 2009 it has decreased by 3.9%. Between 2008 and 2009, GDP per capita has sharply reduced ($41,600= £35,763.52 to $39,800= £34,216.06) but in 2010 this indicator level has increased to $40,300 (£34,645.9100). The agriculture sector represents a small proportion in the domestic market only 2% contrarily to services sector. The budget was $358.5 billion for the revenues and $400 billion (£343.88 billion) for the expenditures. The country owns 27 airport in 2010 and
Social: Netherlands there is a total of 16,847,007 people in July 2011. The majority age bracket is 15-64 years old, the second is 0-14 years and the last one is 65 years and over. The Netherlands’ population is in the majority women with 50.50% against 49.50% for men. The population rate is 0.371% for 2011. The health conscious was taken with European...
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