International Business And Global Expansion Of Angel Seafood Holdings Ltd

Agriculture and Fisheries Industry in Australia

International expansion is important for businesses in terms of expanding the scope and arena. Internal strategic review is crucial in terms of making plans for penetrating into the foreign markets. Within this, the key resources and capabilities is important in terms of assessing the prospective value the companies and organizations would create in the foreign markets (Chrysostome and Molz 2014). This assignment attempts to provide an insight into the international expansion of Agricultural and Fisheries Industry in Australia into the threshold of Gulf of Thailand.

Agriculture is the main source of income for the Australian people. The main focus lies in producing the agriculture and exporting it to the neighboring countries. 325, 300 laborers are employed in the industry, which results in the production of quality crops. This also includes forestry and fishing. According to the records, agricultural industry acquires an income of $155 billion year, which accounts for 12% of the GDP. The land share includes 135997 farms, which covers 61% of the total landmass. 64% of the lands are owned by the state and the rest 23% is under the authority of local tribes (Business.gov.au 2018). The farming techniques include irrigation and dry land farming. The main crops are cereals, oilseed and grain legumes, which escalates the sales revenue due to the human consumption and livestock feed. Mention can be made of 2002-03, when the gross value of production in fisheries and agriculture was $2.3 billion. Since the advent of technology, there has been transformations in the industry. Currently, the market share of the industry is 32% and it is still growing. The export value of the fish products in 2002-03 was $1.84 billion. The main seafood exports includes lobsters, prawns, tuna and abalone.

Australia is perceived as the world’s third largest fishing zone. The measurement of the coastline is 60000 km, spreading over 14 million square kilometre (Business.gov.au 2018). Diversification is reflected from commercialization of the fisheries through the exports. Wide supply chain network of the agriculture and fisheries industry reflects the measurability towards focusing on Gulf of Thailand as the target market. This is because the fish stock in the Gulf coast has been exploited whereas the offshore areas have been intensively flourished with large quantities of fish. Experiments have discovered that the pelagic stocks are less harvested in the waters (Mfa.go.th 2018). This necessitates the need for importing fish stocks from the Agriculture and Fisheries Industry in Australia.

Gulf of Thailand as the Target Market

Angel Seafood Holdings Ltd is an ASX listed company, with its headquarters in Australia. The ASX code is AS1. Founded in 2016, the company is the subsidiary of Angel Oyster Australia Pty Ltd. Currently, the market share of the company is running low, which is represented from the values -0.01(-3.33%). As a matter of specification, the market share is 0.14 (Angelseafood.com.au 2018).

The company has achieved accolades and glory by providing fishery services to the clients and the customers according to the requirements. Production of clean, green and organic oysters enables the staffs to achieve the dependence of the customers. The operations of the company is spread all over the world. The goal of the company is to maintain the quality of the fish products without compromising with the environment. Maintaining consistency in the quality of the fish escalates the sales revenue. Organic certification enhances the reputation of the company. The company has tie ups with the five star hotels of Hong Kong, which caters to the appetite needs of the stakeholders and shareholders (Angelseafood.com.au 2018). Presence of skilled and efficient professionals in the research and development team bestows efficient ways for bringing innovation within the business operations. Broad supply chain network of the company is flexible enough for indulging in alliance with the state government of the Gulf of Thailand. Alliance with the five star hotels of Hong Kong would be an added advantage in terms of achieving the proposed expansion (Mfa.go.th 2018).

As the market share of the company is currently low, expansion is the best option in terms of regaining the stability in the market position. Strategic planning would be vital in this direction. Within this, developing real and achievable objectives would prove effective in terms of achieving the expansion in a proper manner (Ibeh et al. 2017). The following objectives can be helpful:

• To increase the harvest of oysters
• To minimize the mortality rates
• To acquire new and efficient technologies for adding to the processing facilities in the Coffin Bay area after the acquiring share in the Cowell area
• To make investments through water lease agreements, settlement of packing facilities
• To deposit funds for purchasing other associated equipment
• To improve and upgrade ties with Thailand

Australia is considered as one of the top five exporters in the world. This is because, the staples are exported to more than 50 international markets. In the era of 2014-15, the total export value for grains, oilseeds and pulses were AS$ 10.3 billion. Among these, the value for wheat exports was AS$ 5.4 billion and for oilseeds, the value was around AS$ 1.3 billion. Specific grading system, export of the contract standards and tracking machines ensure that the customers get safe and best quality grains (Austrade.gov.au 2018). The resources, which the industry possess are skills and efficient workers, who possess the capability to produce quality crops for supplying to the clients and the customers.

Angel Seafood Holdings Ltd

The climate of Australia is extremely favourable growing wide variety of grains, oilseeds and pulses. The farmers are instructed to make use of the latest technology for maintaining specific grades, color and texture for fulfilling the market requirements. Increase in the number of suppliers, the buyers are opting the aspect of segmentation. This has assisted the buyers to track the unique specifications of the crops and getting the assurance that the quality of the product can be traced (Austrade.gov.au 2018).

Tasmanian based aquaculture systems, AQ1 possesses latest technologies, through which the fishes are fed. One of the mentionable aspects of this systems is the sound detection, which helps the staffs in recording the sounds of feeding. The presence of acoustic sensing technology helps the labors to measure the hunger levels of the shrimps. This is further assistance in terms of feeding according to the appetite levels. The system enables the farmers to improve the feeding procedure by 60%. Wastewater treatment method is one of the other resources, which enhances the capabilities of the labors (Austrade.gov.au 2018). Partnering with the other companies assists the staffs to clean the wastes from the water in a cheaper manner. This provides the opportunity to enjoy competitive advantage over the contemporary brands. Reference can also be cited of the water bioremediation solutions, which helps in detecting the pollutants in the water.

Training packages enhance the preconceived knowledge, skills and expertise of the workers on aquaculture, fishing operations, seafood processing, fisheries sales and distribution and legal compliance. This training is necessary in terms of enhancing the productivity of the industry. Experts from the associated agencies are hired for delivering the training, which aligns with the legal compliance. Herein lays the appropriateness of the role played by the research and development team in designing latest and modern technologies. Innovative designs are assistance in terms of regulating the marine environments like sea ranching, surface lines, subsurface lines, sea cage culture among others (Abs.gov.au 2018). These technologies are helpful in terms of managing the freshwater environments like the pond and tank systems.

The staffs are capable of recirculating the aquaculture systems and their application on the fishes and the research facilities. The firms emerge capable in maintaining the value chain with the effective and judicious use of the technologies. Supporting the equipments and facilities is fruitful in terms of maintaining the balance between supply and demand. Market research is beneficial for seeking the latest and modern technologies for enhancing the productivity. Mention can be made of AQ1, which lowers the production costs. Mention can  also be made of SF200, which is a latest addition in the sector of global shrimp farming. The technology is used by the farmers of 13 countries. The system is efficient in reducing the amount of uneaten feeds in the ponds (Abs.gov.au 2018). This is in terms of maintaining the cleanliness and hygiene. Utilization of this system has resulted in optimizing the growth rate of prawns. As a matter of specification, SF200 is capable of dissolving the oxygen levels, controlling the temperature of the water and rainfall.  

Objectives for Expansion

Coral bleaching is a serious threat to the fish species in the threshold of Thailand. This contradicts the data related to the fact that Thailand is the world’s third largest seafood exporter, shipping $7 billion fish and seafood in 2013. The tools and resources like AQ1, SF200 would prove beneficial in terms of detecting the climactic changes, which would be favourable for harvesting and processing fish and other seafoods.

Table 1: Macro environmental analysis of Australia

(Source: Business.gov.au 2018)

Political

Federal constitutional monarchy is the major political form, which prevails in Australia. Governor general is the British monarch, possessing the authority of Head of the State. The Liberal Party introduces the policies related to economic liberalization, catering to the business and middle class. National party is entrusted with the responsibility to introduce policies dealing with rural agriculture. Stability in the political environment is reflected from the frameworks for maintaining equality within the working class (Miklian, Ganson and Schouten 2016).

Economic

Diversity in the natural resources assists the foreigners in making investment in the services of the agriculture industry of Australia. Along with this, strong economy with per capital GDP stabilizes the financial parameter. Wide supply chain network has made Australia successful in exporting natural resources, energy and food. Here, mention can be made of the quarterly rise of 2.5% growth rate in the GDP, reflecting the measurability in terms of economic growth and development. 10% growth in the sales tax rate has adversely affected sales revenue and profit margin. Australian dollar is currently the fifth most traded currency in the world after the euro, yen, pound and sterling (Business.gov.au 2018). However, the industry follows a floating exchange rate. Diversification in the currency portfolio for the currencies provide greater expansion opportunities. The major drive behind this is the adherence to commodities cycle, which results in increasing their shelf life.

Social

Aboriginal people are the first inhabitants in the threshold of Australia. British invention in Australia is still a debatable issue. Use of convict labor for prisoner’s ranch reflects the addition into the workforce, which projects the stability in the labor market of Tasmania and Port Arthur. The major drive behind this is the 4.5% GDP growth rate of education (Business.gov.au 2018). Australia’s fishing zone is 11 million square kilometre is perceived as the third largest in the world. Online booking facilities enhances the ease of the customers. This enhancement has adversely affected the Australian cuisine. Diversity in the harvesting process of fishes like lobster, prawn, tuna, salmon and abalone provides a variety of choices to the clients and the customers regarding their buying behaviour.

Key Capabilities and Resources

Technological

Internet usage has increased from 1.1 million in 1998 to 4.7 million in 2005-06. The current growth rate is even more. 27% increase in the education rate has added to the number of skilled and efficient employees in the research and development team. This addition has resulted in seeking innovative designs for the execution of the harvesting processes (Abs.gov.au 2018). Mention can be made of the refrigerators with modern preservation techniques for keeping the fish fresh for longer times. Anti-hacking software kernel is also mentionable in terms of the maintaining the records of the expenditures made towards conducting the transactions.  

Environmental

Australia is one of the countries with rich diversity in the flora and fauna. 5% of the Australia is reserved for the national parks, which is an excellent source of habitat for the rainforest, deserts, coral reefs, woodlands, plants and the sand animals. In spite of the diversity, environmental issues prevail within the ecosystem. These are of three types- international, national and local. The international issues include global warming, which has adversely affected the tourism and economy of Australia (Austrade.gov.au 2018). Typical example of this is the coral bleaching, threatening the ecosystems of the Great Barrier Reef. Issues on the national level include ocean dumping, adding to the pollution levels of the coastlines. Sea Dumping Act helps in regulating the waste depositions in the sea. The local issues include mining, waste management, soil salinity among others, which are not at all suitable for harvesting fisheries.

Legal

Federal system of government maintains the equality between the citizens. State and Territory Criminal Laws are effective in terms of regulating the illegal practices, which the workers might adopt for the execution of the trades and transactions. Presence of the separate branches assists the citizens in terms of approaching the right parameter towards getting justice for the breach of contracts (Ripmeester 2014). Mention can also be made of the Equality Act (2010), Consumer Protection Act and other marketing legislations, which regulates the marketing practices.  

Stability in the government would enable Angel Seafood Holdings Ltd to deal with the political unrest and the tax tariffs in the threshold of Thailand. Monarchical form of government in both the countries is advantageous in terms of executing the business in an efficient and effective manner. The wide supply chain network of Agriculture and Fisheries Industry of Australia is flexible enough for catering to the seafood cravings of 62 million population in Thailand (Mfa.go.th 2018). The sales revenue of the industry would increase if fusion foods are prepared in the festivals, as it would help on identifying the target customers. Research and development of both the countries are stronger, which indicates innovation within the business activities. While creating the foreign policy, focus is laid on regional stability, which is a positive point for the Agricultural and Fisheries Industry of Australia.

Agricultural industry of Australia adopts the technique of behavioural segmentation for identifying the customers. According to the survey, the consumers are preferring non-traditional crops, compelling the staffs to adopt such techniques, which caters to their culture and wellbeing. Increased demand in the meat consumption has reduced the per capita consumption of the fish harvesting companies. External influences like peer pressure, ethical behaviour and nutritional consciousness adversely affects the buying behaviour of the customers. This makes the customer segmentation difficult (Brewster et al. 2016). Mention can be made of the customers, who frequently eat prawns day and night. Apps provides them with online booking services, increasing their trafficking towards the brand image. As the Thailand people are tech savvy, innovative offers, discounts and schemes would be beneficial in terms of identifying the prospective customers. Research and development team of Thailand is stronger, which indicates innovation within the business.

The immediate competitors of the agriculture industry are mining, retail, wholesale, energy, arms and dairy. In terms of competition, Australia can be placed at par with Europe and USA. Starting from the crisis of 2008, GDP experienced 3% growth every year. Diversity in the natural resources of uranium, gold mines, oil and natural gas intensifies the competition with the agriculture industry. Mining industry grew 38.2% including earnings before interest, tax, depreciation and amortisation. As compared to this, agriculture, forestry and fishing projected a growth of 8.6% in the sales revenue. 22.9% growth is recorded in the earnings before interest, tax depreciation and amortisation (Business.gov.au 2018). Mention can be made of the rental, hiring and real estate services, which revealed a collapse in the earnings before interest, tax depreciation and amortization as compared to the previous year’s growth of 13.2%. Healthcare and social industries grew by 5.2%.

Success of a business relies on the suppliers. This is dependent on the quality of the materials supplied to the suppliers. Adhering to the legal compliances helps in saving time and financial resources. In case of the agricultural industry, mention can be made of Du Pont, which caters to the aspect of animal nutrition, disease prevention. Along with this, assistance is provided for protecting the quantity, quality, sustainability of the crops. Mention can also be made of Mackay Reef Exports, which provides the supplies of processing, wholesale and retailing of the fisheries (Austrade.gov.au 2018). Dominance of VAT might act as an obstacle for the suppliers towards supplying quality fish and other seafood items to the industry. However, alliance with the members of the trade union would be assistance in terms of dealing with these taxes.

Innovative technologies in the other industries is a threat for the agriculture and fisheries industry of Australia. For example, if a startup restaurant offers fat free fish item at a cheaper rate, then it would reduce the sales revenue of the industry. This in in spite of the fact that efficient and effective techniques have been used for harvesting and processing of the fish. Technology is one of the obstacles in shrimp breeding centres, which reflects the measurability of considering the threat of new entrants as low. This provides the Agriculture and Fisheries Industries an advantage towards securing their position in terms of expansion.

Suppliers ruling the market decrease the sources of increasing the profit margin for the industries like agriculture and fisheries. Experimentation with the product designs can increase the prices of the raw materials (Haase and Franco 2015). Indulging in partnership with the third party manufacturers enhances the productivity in the business. Third party manufacturers have less bargaining power as compared to the already established companies like Walmart, Nike and others. VAT might obstruct the process of fish supplies. This makes the bargaining power of the suppliers high.

The buyers demand best quality products at cheap rates. This demand of the customers put pressure on the staffs of the agricultural industry. As a matter of specification, it obstructs the process of enhancing the profit margin. Smaller and powerful customer base projects the higher bargaining power of the buyers (Lee, Jung and Han 2017). This power is assistance in terms of demanding more offers, discounts and schemes. Rapid innovation within the fish harvesting and processing techniques can act as an effective means for influencing the purchasing power of the customers. The population of Thailand reflects cultural diversity, which makes the buying power of the buyers high. Therefore, the industry personnel need to produce fusion foods for attracting more customers.

Substitute systems and machines for harvesting and processing fish at cheap rates is a substitute for the business processes in agricultural industry of Australia. Along with this, if the systems offer great value proposition, it also adds vulnerability in the market position of the industry (Lobley, Baker and Whitehead 2016). Focusing on being service oriented helps the industry staffs in dealing with these threats. Increasing the switching cost for the customers is also an effective means for retaining the trust, dependence and loyalty of the customers. The technology except shrimp industry is of high quality. This makes the threat of substitutes high

Intense rivalry among the industries of Australia decrease the prices and overall profitability. As Australian industry operates within a competitive ambience, therefore, likeliness of encountering reduction in the prices and the profitability is quite high (Karakaya and Stahl 2015). Technological innovation is reflected from the industries of Thailand. Therefore, the competitive rivalry is intense between the Agriculture and Fisheries Industry and the industry of Thailand.

Table 2: SWOT analysis of Agriculture and Fisheries Industry Australia

(Source: Business.gov.au 2018)

VRIO analysis is effective in terms of evaluating the resources of the companies and organizations. This evaluation is fruitful in terms of assessing the extent to which competitive advantage can be achieved. This is also applicable for agriculture and fisheries industry in Australia.

As the industry operates within an intensified competitive ambience, therefore the threat of substitutes is quite high. Governmental assistance is needed in terms of obtaining the raw materials at cheaper rates, without the tax tariffs (Glavas and Mathews 2014).

Unless and until the members of the research and development team invents latest and modern technologies for harvesting and processing fish, the agricultural resources would be rare. Therefore, consistency needs to be maintained towards adding to the labor workforce for adopting latest and modern machines. Rationality and innovation would assist in providing quality services to the clients and the customers (Falkner 2017).

Diversity exists in the agricultural industry of Australia. This is in terms of the different and wide ranging techniques for the harvesting and processing the fishes. Food and Beverage Industry can imitate the harvesting process for preparation of the fish and other sea food items. However, conscious approach towards bringing innovation within the products and services would be effective in terms of attracting the foreign clients to make investments (Hamilton and Webster 2015).

Partnership with the third party manufacturers and suppliers adds value to the stock of human resources. This results in the introduction of efficient and effective quality processes for executing the harvesting and processing of the fishes. Recruitment of efficient and flexible staffs in the research and development team would help in enhancing the productivity (Cheung et al. 2016).

Conclusion

Wide supply chain network of Agriculture and Fisheries Industry of Australia possesses flexibility in terms of attracting prospective customers from Thailand. Skilled and efficient members in the research and development team indicates the introduction to innovative tools and techniques for conducting the harvesting of fish. These tools would be effective in sensing climactic changes, which is beneficial in terms of preventing the environmental calamities like coral bleaching and other. These calamities are man-made, which obstructs the process of expansion into the foreign markets of Thailand. Innovation within the tools and techniques is a means for expanding the scope and arena of business in Agriculture and Fisheries Industry.

References and bibliography

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