Going International With Local Product Case Study

Length: 5 pages Subject: Literature - African Type: Case Study Paper: #47681859 Related Topics: Nigeria, Food Labeling, Pest Analysis, Genetically Modified Food
Excerpt from Case Study :

Nigerian Cocoa

The Risks and Payoffs of Entering into the British Marketplace

As organic and high quality products are becoming more and more desired, it is clear that exporting Nigerian cocoa to international markets, like the UK will prove a successful endeavor. There has been a large production of cocoa in Nigeria since 1910 (Oyedele 2011). It has a long and steady history of quality cocoa production and Nigeria is now the world's 5th largest producer of cocoa in the world. It is now also increasing its production of organic cocoa and local manufacturing of cocoa products, rather than solely raw cocoa beans as the major export. This makes it an appropriate move to introduce Nigerian cocoa into a UK marketplace. England has recently been increasing its desire for organic products and is often willing to pay more for higher quality. Additionally, England, along with much of the rest of Europe, is moving much of its production overseas, thus making the already available process of manufacturing cocoa locally in Nigeria a major plus. With the research forecasting 300,000 MT for the 2011-2012-year, it will be crucial to make the introduction into the UK market soon (Nicely, David & Nzeka 2011).

Industry Analysis

Threat of New Entrants. The cocoa market has recently "increased international competition," (Jansson 2005 p 3). Other Latin American countries trying to emulate the Dominican Republic are well on their way of increasing cocoa production. Latin American nations are opt to step into produce large volumes of organic cocoa, threatening Nigeria's market share. In the UK, there are also strict requirements to be able to sell foods labeled organic. Producers of cocoa looking to gain the right to label their products organic will have to meet a long list of demands forcing such producers to utilize sustainable practices and limited use of chemicals within the grow period (Barrett 2002). This may prove difficult to do for many smaller cocoa producers who do not have the strong support from government many Nigerian farmers to in terms of building sustainability productive practices.



Unfortunately, Nigerian cocoa is still suffering in terms of quality. In fact, although Nigerian cocoa has increased in quality recently, it is still well under the quality it was in the 1980s (Nicely, David & Nzeka 2011). This creates a situation where Nigerian cocoa can easily be replaced with substitutes from the Dominican Republic or Ivory Coast. Moreover, organic cocoa being introduced into the UK market may be easily replaced with substitutes from other organic producers, who meet the requirements of organic certification, without sacrificing quality.

Bargaining Power of Suppliers. There are many UK suppliers are looking to move production of cocoa over seas to save costs. This would mean that Nigerian suppliers, fitted with brand new processing facilities, would be able to have a stronger presence within the negotiation process involving English buyers. However, high UK tariffs can tend to have an impact on doing business in England.

Bargaining Power of Buyers. The power of buyers is increasing because of the more liberalized process of exporting cocoa out of Nigeria (Ajetomobi 2011). Where at one time English buyers would have had to deal with a single government agency and much more rigid prices, the more liberalized process now allows those buyer to go to a number of different suppliers looking for the best deal.

Competitive Rivalry within the Industry. International competition in the cocoa producing industry is high. According to the research, "The rapid growth of emerging country markets and their integration into the world economy is drastically re-arranging the competitive forces for firms and economies," (Jansson 2005 p 1). As more and more countries become open to working within the international community, the potential increase for competitive rivals increases. Yet, there has been some leeway made for Nigeria. First, Ivory Coast is experiencing social dilemmas which has its production capacities at risk. Secondly, Latin American cocoa is widely available, but may not be as practical for English buyers than Nigerian cocoa. Yes, the Dominican Republic is the largest producer of organic cocoa (Koekoek 2003). However, its proximity to the United States could be a major threat if the product was taken to the United States. Thus, it would be more productive to keep Nigerian cocoa closer than across the Atlantic, in regions like the UK.


Political. Federal…

Sources Used in Documents:

Legal. Since the product is meant to be edible, there are a number of legal restrictions that are governed over by the UK Food Standards Industry. Nigerian cocoa entering into the UK marketplace must meet all requirements to be allowed for sale within English borders. Issues can further be complicated when dealing with introducing cocoa into the UK that is labeled as organic. Most nations have legislation that dictates what foods can be labeled as organic, normally pertaining to recorded information about producers including utilizing green production practices, no chemical pesticides, and energy efficient manufacturing processes. Across all of the European Union, organic foods are governed by EU Eco Regulation, but the UK has taken an extra step further and established the Department for Environment, Food and Rural Affairs (Barrett 2002).


Strengths. In Nigeria, government programs and subsidies have focused on increasing not only

Cite this Document:

"Going International With Local Product" (2011, October 18) Retrieved August 5, 2021, from

"Going International With Local Product" 18 October 2011. Web.5 August. 2021. <

"Going International With Local Product", 18 October 2011, Accessed.5 August. 2021,

Related Documents
International Marketing
Words: 2113 Length: 7 Pages Topic: Business - Advertising Paper #: 21831812

International Marketing In many ways, domestic marketing and international marketing are similar. They are based on the same fundamental principles of using price, product, place and promotion to craft appeals to customers that will enhance sales. There are certain facets of international marketing, however, that are slightly different. Marketers need to be aware of what these similarities and differences are. In terms of similarities, the fundamental things that a company must pay

International Expansion Is One of the Growth
Words: 4255 Length: 16 Pages Topic: Business Paper #: 75935597

International expansion is one of the growth strategies that are embraced by companies in order to improve their bottom-line/profitability. In this paper, we present an elaborate international marketing strategy for Red Bull energy drink. The marketing plan begins with an introduction into the concept of international expansion and marketing and a brief overview of the company. A review of the main conclusions and recommendations is then presented. This is then

International Business Competitive Strategy Is the Bedrock
Words: 6174 Length: 18 Pages Topic: Business Paper #: 46966256

International Business Competitive strategy is the bedrock on which companies base business decisions to reach their targets and achieve profitability. Formulating and implementing strategies in international business is much more complicated and difficult task than doing so in home or familiar markets. Competitive strategy deals with the development of abilities by a firm to keep ahead of competitors in the fields in which it operates. Firms develop competitive edge in global

International Business Three Company Profiles:
Words: 1437 Length: 4 Pages Topic: Business - Advertising Paper #: 46961033

That's proving a business opportunity for Krispy Kreme, McDonald's and other American fast-food chains. For Krispy Kreme, Japan is part of its overseas expansion -- a crucial element of its revival plan announced earlier this year. The chain, based in Winston-Salem, N.C., saw its stock collapse two years ago under the weight of overexpansion in the U.S., an accounting investigation and the low-carb diet craze...[Now a] Japanese man carries

International Expansion and Globalisation on
Words: 1539 Length: 5 Pages Topic: Business Paper #: 62872670

By offshoring tasks, companies can also focus on their core business, allowing them to grow more rapidly, increase organizational value, and complexity. In an increasingly competitive world, these benefits can mean the difference between success and failure. Conclusion: Globalisation and international expansion are two driving forces in organizational change, in today's world and likely will continue to be of increasing importance as the world becomes more competitive. As such, corporate strategies

International Marketing There Are Several Blunders That
Words: 1509 Length: 5 Pages Topic: Business Paper #: 11521340

International Marketing There are several blunders that have occurred with respect to international marketing. Some come under the category of basic linguistic misunderstanding, but others are more catastrophic in nature, causing offense in addition to costing the company sales. In some cases, the blunder gets back to the home market and does damage there, as was the experience that Nestle had in Africa. This report will outline some of the blunders