Australian Horticulture industry is mainly comprised of fruit, vegetables, turf, nuts, flowers and nursery products. The horticulture industry of Australia has enjoyed a great reputation by being a sustainable producer of premium safe food. The horticulture industry has contributed a prosperous life to Australians, both living in rural and regional areas. The Australian farmers that are belonging to horticulture industry tries to adjust to their operations and adopt new technologies for responding to the challenges and opportunities of the agricultural production in Australia.
Australia is having a significant tropical horticultural industry which consists of large irrigation schemes in Western Australia and Burdekin River in Queensland. The horticultural production or growing areas in Australia are norther Tasmania, Southwestern Australia, Goulburn Valley of Victoria and many more. The nursery production is quite close to the regional cities where the tropical nursery plants are set nearby the cities.
This report is based on Costa Group Holdings who is the leader of horticulture business in Australia. This company includes growing, packaging and marketing of the horticultural products, including fruits and vegetables. Currently, the organization is having 4500 hectares of land and 30 hectares of glasshouses which come under nurseries. This company is biggest exporter of Asia, North America and Europe. Out of the horticultural products, the main fruits and vegetables includes berries, avocadoes, banana, tomatoes and mushrooms etc. The headquarters of the company are at Ravenhall Australia. The major source of revenue of the company is from the sales of goods, including fruits and vegetables. It was $970, 297 in 2018.
International Business Opportunities and Different International Strategies Suitable for Costa Holdings
When the business has good local sales, then for making a global entry there is a need of making market research so that it can be analyzed that how business can expand across the globe. Firstly, the international business opportunity comes in the way of export and import of goods. Purchasing the good overseas and then selling it in the domestic markets is one of the oldest way of doing international business. This type of business needs lot of preparation and need firm international business strategies for running the business. In this type of international business opportunity, the success depends on ability of company in setting up the business and keeping within the trade guidelines of the country in which it is trying to enter.
In context to Costa Holdings, the company is having good international business opportunity. As the land for farming in Australia is limited and costly as well, so it has an opportunity to invest in the foreign land. For an example, in some of the Asian countries, it has tropical environment similar to Australian. Also, the land rates are cheaper as well. So, the company is having an opportunity of expanding globally.
International business strategy is known to be a plan that provides guidance for the commercial transactions taking placing in various countries. The international business strategy gives a list of actions that are to be carried out while making a global entry. For Costa Holdings, global strategy is suitable one as the product and services of the company is largely hidden from the consumers.
Appropriate and Inappropriate Mode of Entry to the International Market
Foreign market entry modes mainly differ on the basis of degree or extent that is associated with it. Mainly there are two type of international market entry modes, equity and non-equity modes. In the equity modes, it includes joint ventures and wholly owned subsidiaries and in the case of non-equity modes, it consists of export and contractual agreements.
For Costa Holdings, the Greenfield investment is the suitable one and appropriate mode of entry. This mode belongs to wholly owned subsidiary. Though it is costly but it provides a complete control to the firm. Also, this mode is having the potential of getting more than average return. This international mode is preferred where there is not close contact with the end customers. Also, it is attractive when there is less number of competitor and its power is less. It requires the firm to gain knowledge and expertise of existing market from the third parties. However, franchising is the most inappropriate mode of international market entry. It is strategy where franchising agreements are made with domestic parties. The party is responsible for initial training, operation manual and managerial systems as well.
Recommendations for Future Strategic Direction
Future strategic planning is a process that is used for developing a plan for implementing the values that will deliver success to the company. Mainly, strategic planning consists of the stakeholders in an organization who shares their vision about strengths and weakness that is associated with the strategy and critical factors associated with the strategy.
In context of Costa Holdings, it is recommended to invest on unmanned aerial vehicles, i.e. drones for taking care of their fruits and vegetables. This strategy of technology changes in caring and nurturing of food crop would lead to better yields and outputs. Also, it would lead to more profits for the company. Under the same strategy, it can invest on the yield boosting algorithms that is based on machine learning. It will allow the farmers to analyze that how they can control the pest and weed. Thus this strategy will help the company in generating profits.