FarmCo: International Agribusiness
FarmCo: International Agribusiness Essay
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Updated: Jul 15th, 2022
Among the various economic sectors in the US, Agribusiness has remained a major contributor towards the countrys economy. It works as an important economic stimulus through creation of jobs as well as earning government revenue. Currently, agribusiness in U.S has taken international perspective. Many companies are involving themselves with exportation of farm produce to international market.
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FarmCo, has been very instrumental in this context. Currently, if has shifted its focus from domestic market where it has done very well and is now looking forward to expanding its market to China.
FarmCo is a private agribusiness company in U.S, based in Texas. The company deals with production of fruits and vegetables and it has over the past few years grown enormously. The company enjoys local market share but has currently decided to expand its market a little larger into the international platform. In this regard, the company has decided to venture into Chinas market where the companys management has deemed an inevitably potential market for its produce.
FarmCo has set up objectives that need to be achieved during the current financial year. These include financial and non-financial objectives. Financial objectives include increase in sales revenue, growth in profit margin and securing a marker share internationally.
Non-financial objectives of the company are environmental sustainability and customer loyalty.
To achieve the above-mentioned objectives, the company requires vibrant management and subordinate staff. In this regard, George Stall who has been the CEO of FarmCo continues to work as the head of the company. Edward Davis will serve as the companys vice president to assist the CEO to see the implementation of policies developed by the company.
The company will also require subordinates who will work effectively towards realization of the companys goals and objectives.
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To achieve its objectives, FarmCo will require a well laid growth strategy. In so doing, marketing comes first. Intensive marketing through internet and mass media will inform potential consumers about the availability of FarmCo products in the market. The company will first engage agencies in their exports but later on when the future becomes clear, the company may embark on direct export of its produce to China.
Foreign trade policy
China is one of the countrys where is well formulated to attract investors across the world. The infrastructure is as well structured and managed and this is one of the factors that promote business success. The ever rising Chinese economy allows investors to effectively do business in China with realization of increased profit margins and overall business returns. Entrepreneurial privatization is another factor that promotes foreign investment in China. Private sector enjoys free trade and more open trading platforms.
Low commodity standards and regulations
Government controlled economic system
Despite the fact that China has encouraged international investors into the country for trading purposes, there are weakness that somehow discourage investors. Corruption takes a center stage in discouraging foreign investors in any given country. China has been associated with substantiated corruption elements which may threaten investors. There is also unavailability of government body to check on the standards of commodities. This means that cheaply produced sub-standard commodities always find their way into the market. Such commodities will enjoy a larger market share because it is obvious their prices are going to be extremely low.
The fact that Chinese government controls the countrys economic system means that investors may not have a say in policy development and interpretation. This means that policies formulated by the government are those that may not favor an investor. Poverty lines in China may also discourage foreign investor who may be interested in market availability.
Improved economic infrastructure
Effective transport and communication systems
Openness to foreign trade
Improved infrastructure in China both in terms of business infrastructure, transport and communication systems offers an opportunity to local and foreign investors to effectively do business. Transportation of goods within the country makes market accessibility easy.
The government has made China open to foreign investors through policies that encourage foreign investors. This is an opportunity that FarmCo needs to utilize to enjoy the Chinese market.
There are threats that FarmCo may face by doing business in China. One of these is that there is intense competition in the market from locally produced fruits and vegetables as well as those that are produced in other countries but find their way into the Chinese market.
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Another threat that FarmCo may face is social unrest that has recently been common in China. This could be a major blow to international businesses as this usually disrupts business activities and therefore rendering big losses to enterprises.
This paper has looked into the process of international marketing and devising of marketing strategies that FarmCo Company may require as it advances its interest into the global market in China. A SWOT analyses has been derived in regard to FarmCos interest in China
It has as well looked into the features of international market as well as how objectives can be met as pertaining to Farmco Company and Chinas fruit and vegetables market.
Hill, C.W. International Business. New York: Business and Economics Publishers, 2010. Print.
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