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Export Strategy for Avocados Export Company

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Table of Contents

  • Brief Synopsis of the Issue
  • Recommendations
  • Background
  • Research on the Assessment Topic
  • Arguments in Support of the Recommendation(s)
  • Arguments Against the Recommendation(s)
  • Implementation of the Recommendations
  • References

Brief Synopsis of the Issue

Auspak Avocados, trading as Avocados Export Company (AEC) is one of the biggest exporters of fresh quality avocados to the international business markets. The company operates its business in various regions of the world and might tend to expand its business in Netherlands due to its stronger financial condition and also for raising need of nutritious fruits in the nation. AEC has been given several recommendations in order for it to be competitive in exporting avocados to the Dutch business markets. Furthermore, some challenges that the company could face when exporting the fruit have been depicted, especially in the Dutch business sector. It can be seen that if the above guidelines are followed to the letter, AEC would be able to export avocados to the Netherlands’ business markets with maximum viability and productivity.

Recommendations

AEC may wish to extend its operations in other parts of the world after demonstrating its ability and broad capture of the Middle and South-East Asian business sector. In a similar vein, an export strategy for the company’s plan to export avocado to a specific European country, such as the Netherlands, will be produced. The Netherlands is often regarded as one of the world’s wealthiest countries, with a higher per capita income. These factors combine to render the Netherlands an unattractive export destination, especially for health-related products such as avocado. Even comparison to other vegetables, avocado is unquestionably one of the most healthy. Considering that most countries search out nutritious food goods, the Netherlands may be an ideal location for the export of fresh avocados. The Dutch citizens are also known to be health-conscious, which has led to AEC’s support for exporting this commodity to the targeted European country of Netherlands. It seems that both countries have improved foreign trading relations, which would help in the export of the commodity to the desired country (CBI Market Information Database, n.d.).

Export Strategy for Avocados Export Company

Background

Auspak Avocados, a company based in Australia, was founded in 2009 with the goal of being a market leader, especially in the export of fresh avocados from Australia. Avocados Export Company (AEC) is based in Brisbane, Queensland, and is operated by a consortium of avocado producers, packers, and marketers from around Australia. In order to ensure greater consumer loyalty, the firm has been shown to recruit technology-driven suppliers and use new manufacturing facilities. The corporation prefers to establish and maintain effective corporate relationships built on mutual confidence and respect. With a focus on exporting fresh avocados to foreign business markets, the firm accounts for approximately 60% of Australian avocado supply. The AEC has established itself as a major player in Asia’s South and Middle East regions. Furthermore, in terms of production, cost, and availability of avocados to foreign customers, in the export market, the company has developed itself as a global pioneer. The high quality of Australian avocados indicates a high market for this fruit in all parts of the world. Avocados are also being exported from AEC to Singapore, Thailand, the United Arab Emirates (UAE), Malaysia, and Hong Kong. The company’s distribution infrastructure has helped it become a dependable year-round supplier of high-quality avocados. In order to guarantee the delivery of high-quality goods to consumers all around the globe, the organization employs effective tactics. Year-round supply, direct shipping of avocados from packers, labeling and packing the stock according to consumer desires, and introducing an automated supply chain protocol are among these techniques (Auspak Avocados, 2011).

Research on the Assessment Topic 

Arguments in Support of the Recommendation(s)

As previously mentioned, Netherlands is regarded as one of the richest nations throughout the globe due to its greater per-capita income and broader conduct of international trade. Specially mentioning, the nation possesses a prosperous and an open economy, relying largely upon performing foreign trades effectively. The economy of Netherlands has broadly been impacted by unchanging industrial relations, low employment and inflation (Central Intelligence Agency, 2013). It can be affirmed that all these significant factors eventually contribute in making the nation an idle place for conducting business and international trade (The World Bank, 2013). Based on the above analysis made regarding the economy of Netherlands, it can be concluded that through having a strong economy and high per capita income, the people belonging to Netherlands can afford in purchasing high quality and costly fruits like avocado. Also, the people of Netherlands are viewed to be health and nutrition conscious, which would eventually result in raising the demand of avocado in the respective business markets of the nation. According to the report published by the Ministry of Foreign Affairs of Netherlands, the public consumption of avocados in the year 2010 was 30 thousand tonnes, indicating a huge demand and market for this particular fruit. However, this consumption reduced in the years 2008 and 2009 and gradually increased in the year 2010 (CBI Market Information Database, n.d.).

Netherlands, being vastly reliant on foreign trade possesses a direct interest and a tendency to seek a stable international legal order. Both the countries are often found to exchange their values along with views and maintain a better affiliation with each other despite of facing wide assortment of global issues. Correspondingly, Australia and Netherlands have several common international trade policies. Thus, it can be affirmed that the above discussed facets would ultimately impose considerable impact upon AEC towards exporting avocado in diverse business markets of Netherlands (Department of Foreign Affairs and Trade, n.d.). 

Arguments Against the Recommendation(s)

As a result of the preceding debate, it can be affirmed that the financial standing of Netherlands would provide active support to AEC in exporting along with marketing avocados especially in the Dutch business markets. However, certain crucial concerns might hinder the company towards successfully exporting the fruit in the business markets of the respective region. In this regard, one of the imperative concerns is the price. It can be viewed in this similar concern that the price of avocados is kept on fluctuating in Netherlands. For example, the price of avocados in the year 2010 was amounted to € 1.41 per kilo. After this period, the price of avocados has increased every year by 2.8% per kilo. Based on the fluctuating price, the traders used to drop down their prices of avocados and clear the stocks that are made available in their respective stores. However, if AEC start exporting avocados to Netherlands, the fear of falling down in the prices of this fruit can affect the performance of the company. Moreover, if the price of avocados falls down extensively, AEC might face a huge loss. Therefore, the fluctuating price of the fruit can be duly considered as one of the major challenges that AEC might face while exporting the fruit to the business markets of Netherlands. Specially mentioning, apart from price, the significant concern of quality can also affect AEC in exporting avocados to Netherlands successfully. It can be said in this regard that any quality problem may prevent avocado suppliers and growers from continuing to export their product. The increased level of business market competition might also hinder AEC towards successfully exporting avocados in the business markets of Netherlands. As avocados are not produced in Netherlands, a huge number of importers are often observed to remain active in the nation. In Netherlands, avocados are often viewed to be sold by the retail chains. These chains can provide a tough competition to the external players like AEC. Thus, it can be affirmed that if AEC desire to penetrate into the Dutch market in the form of exporting avocados, the company require addressing along with mitigating the above discussed crucial factors by a considerable extent (CBI Market Information Database, n.d.).

Implementation of the Recommendations

As per the above analysis, it can be affirmed that AEC might face certain critical challenges while exporting avocados in the business markets of Netherlands. These challenges can be related to price, quality and most vitally intensified business market competition among others. As both the countries possess better trade relations and exchanges their own values along with beliefs, it is quite possible to mitigate the above identified challenges by a certain degree. As per the export strategy in relation to price, AEC can opt for penetration pricing strategy by taking into concern the fluctuating prices of avocados in the business markets of Netherlands. This particular strategy would eventually support the company towards exporting huge volume of avocados in the respective nation having low margins. With regard to export strategy linked with quality, AEC can opt for making ethical decisions by taking into concern any sort of ethical issue persisting in the process of exporting avocados in the business markets of Netherlands. In order to cope up with the challenge regarding intensified business market competition, the company can evaluate and analyse the financial, competitive and legal along with political conditions of the nation and formulate suitable strategies accordingly.  It is worth mentioning that AEC must form and develop effective logistics system, supply chain procedure along with performing cross-border collaboration with the intention of distributing avocados in the business markets of Netherlands effectively (Kumar, 2005).

References
  • Auspak Avocados, 2011. Our Company. Home. [Online] Available at: http://www.avozexports.com/index-1.html [Accessed December 17, 2013].
  • CBI Market Information Database, No Date. Fresh Avocados in The Netherlands. Ministery of Foreign Affairs of the Netherlands. [Online] Available at: http://www.cbi.eu/system/files/marketintel/2011_Fresh_avocados_in_The_Netherlands.pdf [Accessed December 17, 2013].
  • Central Intelligence Agency, 2013. The World Fact Book. Netherlands. [Online] Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/nl.html#Econ [Accessed December 17, 2013].
  • Department of Foreign Affairs and Trade, No Date. Netherlands Country Brief. Australian Government. [Online] Available at: http://www.dfat.gov.au/geo/netherlands/netherlands_country_brief.html/ [Accessed December 17, 2013].
  • Kumar, A., 2005. Export and Import Management. Excel Books India.\
  • The World Bank, 2013. Ease of Doing Business in Netherlands. International Finance Corporation. [Online] Available at: http://www.doingbusiness.org/data/exploreeconomies/netherlands/[Accessed December 17, 2013].

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