The Middle East, India, Russia, Zimbabwe, or elsewhere? Place and Entry Method

Developed and developing countries are modern classifications that refer to the level and effectiveness of industrialization rate, individual income, and human indicators, such as life expectancy, child mortality rate, and literacy rate. Basically, countries with a high level of industrialization, high level of income per capita, high life expectancy, low child mortality rate, and high level of educational attainment are considered developed, and the opposite is true about developing countries. However, the relationship between the aforementioned factors is not linear. For example, in 2015, Brazil had a higher income per capita than China, but China had a higher literacy rate, higher life expectancy, and a lower child mortality rate than Brazil for the same year. Although developed economies tend to be more attractive to multinational corporations and foreign investors due to their reliable legal and financial systems as well as their high income, developed markets tend to be saturated, and there is little room for growth. Developing economies, on the other hand, might lack solid and reliable legal and/or financial systems, but they have much wider space for growth as they typically have a large young population, more low-skilled labor (low labor cost), and a population with an appetite for new commodities. Your job here is to help a multinational corporation decide where and how to invest. Help them pick a region or a country, and then tell them what the best method of entry is based on the characteristics of that region or country. Assignment Description Organic Valley, which is an organic food brand and independent cooperative of organic farmers based in La Farge, Wisconsin, United States. Founded in 1988, Organic Valley is the nation’s largest farmer-owned organic cooperative and one of the world's largest organic consumer brands. The organization is interested in expanding their international market for lactose free products, primarily yogurt and milk (Organic Valley, n.d.). The company has approached you to help them select one region or country to expand to and the method of entry to that region or country. Their target regions and countries (just pick one) are the Middle East, South America, Russia, India, Zimbabwe, Netherland, Japan, Iraq, Qatar, Kazakhstan, and Romania. They need to know which region or country has a higher potential for market growth for lactose free dairies and why and also the best approach to enter the market—export products there, build production facilities in the region or country, or build production facilities somewhere near the region or country, and how to manage logistics based on the region's or country's characteristics. The following are useful sources for obtaining data income and demographic by country. Economic, Development, and Demographic data Sources To review these sources, copy and paste the following links into a new web browser. • https://datatopics.worldbank.org/world-development-indicators/the-world-by-income-and-region.html • https://data.worldbank.org/indicator/SP.POP.TOTL • https://ourworldindata.org/human-development-index • https://www.theglobaleconomy.com/rankings/wb_political_stability/ Writing Style (APA) and Page Number Requirements • Font Type: Times New Roman or Arial • Font Size: 12 • Spacing: Double • Number of Pages: Two to three pages, not counting the separate Title page and the separate References page. Content Structure and Requirements • Title Page o Title of the paper (your choice) o Name of the author (your name) o Email address of the author o Class name o Professor's name o Date • Content Structure o Introduction:  Briefly state the name of the region or country that you have selected for the company to enter, its population size, its average household income level, its political and legal index, and the size of the dairy industry there.  Briefly discuss export and import restrictions in that country. o Country and Dairy Data and Analysis:  Use graphs, data, or tables to show the growth pattern of the dairy industry in that country and state whether the industry is growing or declining.  Use data to show the size of the lactose free dairy market there. Does it exist? Is it growing? o Recommendations:  State the name of the region or country that Organic Valley could enter to sell its lactose free, and list the reasons that make the country most suitable for their lactose free products.  State the best method of entry (export or manufacture) and why. What makes that country attractive (or unattractive) for dairy production?

Organic Valley's International Expansion: A Focus on the Middle East (Qatar)

Introduction:

This report recommends that Organic Valley expand its international market for lactose-free dairy products, specifically yogurt and milk, to the Middle East, focusing initially on Qatar. Qatar, with a population of approximately 2.8 million (World Bank, n.d.-b), boasts a high average household income level, reflecting its strong economy driven by natural gas reserves. While the political and legal landscape requires careful navigation, Qatar has made strides in improving its business environment. The dairy industry in Qatar, while growing, is still relatively small, presenting an opportunity for Organic Valley to establish a significant presence. Qatar imports a significant portion of its food, making it reliant on external sources, which may present an opportunity for Organic Valley. However, it is vital to research any specific import/export restrictions or tariffs that Qatar may have on dairy products.

Qatar and Dairy Data and Analysis:

(Insert Graph Here: Growth Pattern of Dairy Industry in Qatar)

Data Source: [Insert specific source for dairy industry data in Qatar. This may require market research reports or industry publications. General economic data isn't sufficient for this point.]

The graph above illustrates the growth pattern of the dairy industry in Qatar. (Describe the trend shown in the graph. Is it growing? If so, how rapidly?) This growth is driven by increasing urbanization, rising disposable incomes, and a growing awareness of health and wellness.

(Insert Data Table Here: Size of the Lactose-Free Dairy Market in Qatar)

Data Source: [Insert specific source for lactose-free dairy market data in Qatar. This is crucial for your analysis. Market research firms specializing in food and beverage are the best source. If no specific data is available, explain the assumptions you are making to estimate market size.]

The table above illustrates the size of the lactose-free dairy market in Qatar. (Describe the data. Does it exist? Is it growing? If no data is available, explain what assumptions you are making. For example, you could estimate based on regional trends in lactose-free product consumption or the prevalence of lactose intolerance in the population. Be clear about your assumptions.) The growing health consciousness in Qatar, coupled with a significant expatriate population (who may be more familiar with lactose-free options), suggests a potential market for these products.

Recommendations:

Organic Valley should enter the Qatari market with its lactose-free yogurt and milk products. Qatar presents a compelling opportunity due to several factors:

High Purchasing Power: Qatar's high average household income makes it an attractive market for premium organic products.
Growing Dairy Market: The expanding dairy sector indicates a growing consumer demand for dairy products.
Potential Lactose-Free Market: The presence of a health-conscious population and a large expatriate community suggests a viable market for lactose-free options.
Strategic Location: Qatar's geographic location in the Middle East can serve as a hub for future expansion into the broader region.

Method of Entry:

The recommended method of entry is exporting products to Qatar initially. While establishing local production facilities offers long-term advantages, exporting offers a more manageable and less capital-intensive approach for initial market entry. This allows Organic Valley to test the market, build brand awareness, and establish distribution channels before committing to significant investment in local production.

Logistics:

Managing logistics effectively is critical for successful market entry. Given Qatar's reliance on imports, the country has a well-developed infrastructure for shipping and logistics. Organic Valley should partner with a reputable logistics provider with experience in handling food products and navigating customs regulations in the Middle East. Maintaining product freshness during shipping is crucial, requiring careful temperature control and efficient supply chain management. Exploring air freight for initial shipments, then potentially transitioning to sea freight for larger volumes, could be a cost-effective strategy.

Attractiveness (or Unattractiveness) for Dairy Production:

While Qatar may be attractive for selling dairy products, it may be less attractive for dairy production itself. The arid climate and limited availability of arable land could pose challenges for raising dairy cattle and sourcing feed locally. This strengthens the argument for exporting finished products from the US initially. If, after establishing a strong market presence, Organic Valley decides to explore local production, they should thoroughly investigate the availability of resources, potential environmental impact, and the cost-effectiveness of establishing local dairy farming operations.

Sample Solution

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The Middle East, India, Russia, Zimbabwe, or elsewhere? Place and Entry Method

Organic Valley's International Expansion: A Focus on the Middle East (Qatar)

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