Product Description
The purpose of this assignment is to give a detailed international strategy of Fonterra, which mainly operates in Australia and New Zealand. The company will be trying to make one of its products De Winkel, enter the Singapore market so that it can help them in boosting up their sales (Mahdavi and Olsen 2017). The assignment consists of the various environmental factors that the company needs to take in to consideration before entering the market along with the viability of the product in the market. The market has been analyzed in a proper manner with the help of different viewpoints that will help in selling the product in the current market. the competitor analysis has been done so that the company can have a better understanding of the products that are present in the market already.
De Winkel by Fonterra is 98.5 percent unsweetened plain acidophilus yoghurt that can be used in both savory and sweet recipes by the customers. It consists of milk solids, milk along with skimmed milk, which helps in making the product. the product can remain fresh for seven days after it has been opened and has to be stored below 4 degree Celsius in refrigerated condition (Galtry 2013).
The risk related to the political factors in Singapore is comparatively lower, as compared to other countries. According to the Political and Economic Risk Consultancy (PERC), there is low risk related to the political issues within the country. The citizens of the country elect their representatives who represent the country on their behalf in the world. After the country became independent, the citizens enjoyed political stability, which helped them in restoring peace and balance and the standard of living became high. It has also allowed new opportunities for the new businesses to thrive in the Singaporean market (O’Connor 2017).
Moreover, there has been a controversy that the freedom of speech is restricted within the opposition parties, which has resulted in the defamation of the laws with regards to the comments that are political in nature. The legal framework hampers the freedom of speech of the opposition parties, as the dissemination of the contents is limited (Singh 2016).
The country has a free-market economy, which is developing at a faster pace and has the highest per capita income in the ASEAN countries. The business industry within the country is free from corruption, which has helped in the growth of the sectors and maintains a competitive environment. The workers are educated and are motivated at a constant level so that the frameworks in the business can help the country in increasing its capital structure (Ho 2014).
The government has helped the economy to be diversified in nature by investing in the economy due to which the pharmaceutical, tourism and other industries have flourished in a better manner. The geographic location of the country helps in the success as well along with the help that is received from the government who own the assets that are productive within the country. Importing labor from the neighboring countries at a cheaper cost helps the country to be productive at a lower cost (O’Connor 2017).
Filter 1- Macro Economical Factors
The country follows its tradition in a mandatory manner whereas most of the youngsters in the current generation are adopting the western styles as well. The country is deeply rooted to its traditions and values and makes it a point to follow it on a regular basis. The citizens of the country are hard working and make it a point to earn more so that they can fulfill their materialistic desires. This helps the business sectors, as better levels of productivity helps the customers in increasing their purchasing power as well.
The rate of literacy within the country is high, as most of the citizens consider providing primary schooling to their children. The command over the English language along with the Chinese dialect helps in providing an advantage to the Singaporean community in the global world as well. This helps the country in attracting foreign investment and international trade within the economy (Fozer et al. 2017).
It can be seen that the adoption of the latest technologies within the economy has helped the country in progressing in a better way, which has helped in changing the quality and the lifestyle of the citizens. The widespread use of the internet has helped the country to be advanced, as the level of communication has increased due to the better connection among the people. The conduction of the business gets lowered due to the better connectivity with the employees by the industries. The infrastructure that is related to the information technology is good, as the use of the broadband internet has increased by 70 percent. The e-commerce business within the country has improved to a great extent, which has helped in the establishment of the multinational companies (Shortt and O’Brien 2016).
The growth of the e-commerce industry has helped in managing a transparent regulation and favorable legislation within the country. The legal and the regulatory framework have helped the country in the development of the industries along with the growth of the economy. The e-commerce activities were launched in the country in 1996 after the government introduced various policies related to e-commerce. For promoting the e-commerce activities within the country, the laws such as Electronic Transactions Act, Content Regulation, Tax Issues and Import and Export Procedures were launched by the government (Lagrange, Whitsett and Burris 2015).
The Ministry of Environment and Anti-Pollution Unit has helped the country in maintaining a better air quality and other issues that are threat to the environment. The transportation issues within the country are one of the primary reasons for the pollution of the environment and the country has one of the highest levels of carbon dioxide emissions.
The country lost around 30 percent of its mangrove areas, which has threatened the lives of many species and are facing extinction. The Water Pollution Control and Drainage Act helps in maintaining the quality of the water, which is a major concern for the citizens of the country. This has resulted in recycling of the water after desalinating it due to the high levels of toxins in it (Ho 2014).
PESTLE Analysis
The sour milk and the yoghurt products in the Singaporean market have seen a growth of 4 percent in the overall retail value in the year 2016, which has been lower than the other years. This difference has been caused due to the high rate of growth in the early period and the methods of new drinking such as the brands that have spoon able yoghurt being introduced in the market. The brands like Meiji Paigen, Meiji Bulgaria and Chobani has provided the customers with a new type of yoghurt brand so that the consumption can be done easily. These products after they have been launched have helped in stabilizing the records that are related to the yoghurt business in Singapore (Aune et al. 2015).
The consumers in the Singaporean market are consuming the milk products on a regular basis because of the additional nutrients that are being provided to them. Due to the healthy food habits of the people in the current world scenario, it can be seen that most of the people are increasing their consumption of these health products so that they can be free from any health related issues. The Singaporean consumers are in favor of sour products, as most of their food habits include the consumption of tofu, which is a kind of the sour product (Velazco and Pinilla 2017).
It is seen that around 80 percent of the people who are residing in the country consumes dairy product on a daily manner. It is seen that every year since 2005, the consumption of milk products have increased their spending from USD 2128 per ton to USD 4473 during the period of 2005 to 2011. This has shown a positive impact on the consumption pattern of the dairy products. This is due to the fact that the barriers for entry in the market is low, which has allowed many companies in continuing their business in a proper manner. The brands that are present in the country covers a wider range for which the increase in the pattern of consumption in the consumers have increased (Pashiri et al. 2016).
The market related to dairy products in the Singaporean economy is still in its developing phase, as the consumers are searching for alternatives in the market. The diversification of the product in the market needs to be done so that the consumers can get various products from where they can prefer the products. The company needs to focus its products on the export sales in the initial phase of development, as it will help them in evaluating the market in a better manner. The company needs to provide the the products through various shipments in the Singaporean market so that the company can become familiar with the exporting laws that are present in the country (Talaei et al. 2017).
The country has a free and an open economy and it is seen that almost 99 percent of the imports that are made in the country are free of taxes. However, the goods that are imported has to have a value that is inclusive of the Goods and Services Tax (GST) along with the Cost, Insurance and Freight (CIF), which has to be paid by the company for the product. The product will then be available in the market. The dairy product falls in the non-dutiable category of goods where the GST of the product will be based on the CIF and the commission along with the charges that are incidental in nature (Pashiri, Koh anad Pan 2015).
Political
The Meiji brand controls the overall yoghurt market in Singapore followed by Marigold, which are associated with most of the Singaporean households. Around 96 percent of the people are aware of the name of these brands. The other brands that are operating in the market are F&N Magnolia and Nestle Natural. The customers are aware of these brands and mostly try to consume the products that are associated with these brands. The healthy lifestyles that the people are following in the current scenario have helped them in changing their pattern of food consumption. It is seen that almost two-thirds of the Singaporean population are trying to change their habits, which has helped them in leading a better life (Talaei et al. 2017).
The market is open and is perfectly competitive, which suggests that the product of the company can be established in the market in an easy manner. The competition that is present from the similar products in the market will not hamper the entry of the foreign product. The competitive nature of the Singaporean market will help the company in getting access to the market. This will help them in selling the product within the market in an easy manner (Pashiri et al. 2016).
The information is available for new companies to come in to the market and show case its products, as the dairy companies maintain their annual reports and are published on a yearly basis on their respective websites. This will help Fonterra in acquiring all the information that they need to study the dynamics of the market so that they can enter the market in a successful manner (Teh et al. 2014).
The company is renowned for its quality of dairy products in the market and has been increasing its sales in countries like Australia and New Zealand. Since, there are many competitors that are doing their business in the Singaporean market for a long time, it will be difficult for the company at the beginning to increase its chances of selling high number of products. The company needs to import smaller units of the products so that they can understand the likeliness among the customers towards the product. This will help the company in increasing its sales in the upcoming years (Chei et al. 2017).
Since the economy is perfectly competitive in nature, the cost of entering the market is nil. This is due to the fact that the barriers for entry are not present, which helps most of the business enterprises in setting up their business within the economy in a successful manner. The company needs to find a franchiser who will help in selling the product within the market. The local franchising company will be able to influence the customers in trying out the product so that they can shift to a new product, which will help in boosting up the sales of Fonterra (Teh et al. 2014).
The consumption of the dairy products in the Singaporean market have been increasing on a regular basis. This is due to the fact that they offer health benefits to the consumers. The other products of the company have been doing good business in the market, which will help De Winkel in getting associated with the customers, as it is offered by the same brand.
Economic
The other products of the company have been able to increase its sales in the market due to the superior quality that they provide to the customers. However, there are competitors as well, which hampers the level of profit for the company. The new product that will be available for the customers will be under the parent brand, which is familiar with the consumers. This will help in increasing the profits of the company (Aune et al. 2015).
The company will try to target the consumers who consume dairy products at a regular basis. Since the product also offers health benefits, it will help the consumers who are concerned about their health, which will help them in remaining fit and active in the competitive world. The product will also aim to target the female consumers, as it will help them in protecting them from any diseases that are related to bones. The females of the country are prone to osteoporosis, which will help the company in selling their products in a better manner (Pashiri et al. 2016).
The target market in the economy is diverse. The dairy products are consumed by customers of all ages, as it has nothing to do with age. Since the purchasing power of the people in the country is increasing, they can afford to buy these products with ease. The target market will include the young generation, as it will help them in growing resistance in their bodies. The females will benefit from the products, as it will help them in providing long-term solution to their bone-related problems (Velazco and Pinilla 2017).
The product can enter the market, as it will help the company in increasing its profits with the availability of wide range of products under its brand name. The other products of the company are available in the market, which will help the customers in getting familiar with the name of the brand.
The company however has to keep in mind that the products will need time to sell in the market due to the fierce competition that is present in the market. The dynamics of the market has to be studied in a proper manner so that it can help in selling the product in an easy manner. The products need to be imported in a small quantities so that it can help in avoiding losses for the company, which may result in increasing in the liability of the company in the present market.
Reference List
Aune, D., Rosenblatt, D.A.N., Chan, D.S., Vieira, A.R., Vieira, R., Greenwood, D.C., Vatten, L.J. and Norat, T., 2015. Dairy products, calcium, and prostate cancer risk: a systematic review and meta-analysis of cohort studies. The American journal of clinical nutrition, pp.ajcn-067157.
Chei, C.L., Loh, J.K., Soh, A., Yuan, J.M. and Koh, W.P., 2017. Coffee, tea, caffeine, and risk of hypertension: The Singapore Chinese Health Study. European Journal of Nutrition, pp.1-10.
Fozer, D., Sziraky, F.Z., Racz, L., Nagy, T., Tarjani, A.J., Toth, A.J., Haaz, E., Benko, T. and Mizsey, P., 2017. Life cycle, PESTLE and Multi-Criteria Decision Analysis of CCS process alternatives. Journal of Cleaner Production, 147, pp.75-85.
Galtry, J.A., 2013. Improving the New Zealand dairy industry’s contribution to local and global wellbeing: the case of infant formula exports. The New Zealand Medical Journal (Online), 126(1386).
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.
Hutchinson, N., 2016. Batten down the hatches: The dairy industry in crisis?. Geodate, 29(3), p.17.
Lagrange, V., Whitsett, D. and Burris, C., 2015. Global market for dairy proteins. Journal of food science, 80(S1).
Mahdavi, M. and Olsen, T.L., 2017. Designing Effective Supply Chains in Strategic Alignment with Demand Characteristics and Market Requirements. Foundations and Trends® in Technology, Information and Operations Management, 10(2), pp.89-208.
O’Connor, B., 2017. China Dairy: the growth of an industry. China Dairy, 7, p.4.
Pashiri, M.T., Koh, W.P. and Pan, A., 2015. Dairy Intake and Risk of Cardiovascular Mortality in Singapore Chinese Adults.
Pashiri, M.T., Pan, A., Yuan, J.M. and Koh, W.P., 2016. Abstract MP61: Dairy Products Such as Milk are Associated with a Lower Risk of Hypertension in Singapore Chinese.
Shortt, C. and O’Brien, J. eds., 2016. Handbook of functional dairy products. CRC Press.
Singh, A.K., 2016. Selecting Regional Postponement Centre Using PESTLE–AHP–TOPSIS Methodology: A Case Study in a Pharmaceutical Company. Global Business Review, 17(5), pp.1266-1268.
Talaei, M., Pan, A., Yuan, J.M. and Koh, W.P., 2017. Dairy food intake is inversely associated with risk of hypertension: the Singapore Chinese Health Study. The Journal of nutrition, 147(2), pp.235-241.
Teh, K.H., Flint, S., Palmer, J., Andrewes, P., Bremer, P. and Lindsay, D., 2014. Biofilm− An unrecognised source of spoilage enzymes in dairy products?. International dairy journal, 34(1), pp.32-40.
Velazco, J. and Pinilla, V., 2017. Development models, agricultural policies, and agricultural growth: Peru, 1950-2010.
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