Export plan development and implementation strategies

Export Capability & Readiness

Business Profile

Nature Valley is a leading snack bar production and distribution company established in 1975 and now a subsidiary of General Mills. Nature Valley has gained a strong reputation within the industry and with consumers for the quality and consistency of its products (General Mills, 2012; Nature Valley, 2012).

Strategic fundamentals of your chosen product

"Natural" and healthy branding already presents a strong image. Nature Valley is the originator and in many ways the industry leader of the granola bar market, and this carries international clout and is seen as one of the best American examples of its class. Simply put, Nature Valley has strong brand identity that should be put to use.

Competitive SWOT analysis

Strength

Large amount of working capital and risk capacity.

High production capacity that is scalable and can support growth at any level/rate.

A healthy and creditable image has developed with consumers and suppliers.

Weakness

Lack of exporting experience.

Packaging costs are higher than for many similar products.

Opportunities

Lifestyle is changing, and consumers are far more helath conscious and "Earth-conscious" than even one short decade ago, meaning they will be more likely to buy a healthy and natural snack rather than a traditional junk food snack such as a chocolate bar or bag of crisps

Growing economic freedom and prosperity throughout much of Asia provides greater capability to buy packaged foods, but food quality in these countries is often still poor and exports are required to meet increasing demands

Threats

The current strong Australian dollar weakens the affordability of these products to consumers somewhat.

The Australian and American cultural image that Natrue Valley's brand identity represents might lead to backlash amongst some consumer elements

Reason for exporting

The push to export the product is simply that the opportunity to successfully export exists, with numerous benefits to the company and its shareholders: revenue and profits would directly increase as a result of increased sales (after an initial transition period in which costs must be absorbed, of course), and increases in production will lower the unit costs of production and thus increase profit margins overall.

Discussion of management commitment

A distribution center will definitely be needed in Hong Kong, with full-time management and a staff of at least 25. Contract transportation drivers can be used to bring product from the distribution center to retail locations. Financial needs will be somewhat substantial at first to carry out securing the distribution center, hiring and training staff, and marketing the product, however there is substantial capital available to support this venture (General Mills, 2012a).

2. Export market research, screening and selection

In the last few decades, rapid economic development has been seen in many countries in Asia, with China now standing as the second largest economy in the world and Asia as a whole is a larger economic unit than the Americas or the Eurozone (APO 2012).