Baladna is an agricultural company located in the Qatar country in the Middle East which was started in May 2017. Baladna mainly focused on processing dairy products in the Qatar Market. The company can meet the significant Middle East market since has a farm size of 170 acres with over 5, 000 Awassi sheep, 40,000 head of cattle which produces nearly 500 tonnes per day. All this output is enough to serve the Qatar market demand with the rest export to new market.The company has over 400 employee who undergoes training to ensure the company achieves the highest product quality and nutrition, food safety and animal health. Baladna Company is the first company to use artificial insemination technique that mainly maximizes nutrition content availability in milk products and meat products (Hamad, 2017 p.174).
In the United Kingdom, milk consumption in all elementary school is encouraged since it's believed that milk plays important role in child development. In respect to this demand milk market in the UK still continue to grow steadily as the British public love dairy products for health purposes, weight management, and nutritional content and shifting to health perceived products drive the UK milk demand to rise and other parts in the world (Fearne, Andrew, and Stephen Bates, 2003 p. 742). The removal of quotas in Europe has changed the dairy market in Europe especially UK market. This has opened the market for other players to compete fairly in pricing, marketing, and strategies for entry. In Figure 1.1 show the UK as third in dairy products to satisfy its consumer hence needs for more players to meet the deficit. With UK only producing 13.1% of dairy product, France give 18.3 while German produce 20.8%.
Phase 1.1: A brief Analysis of the chosen Product/brand and its current Marketing
The UK market for dairy products continues to rise to a demand for low-fat milk, cheese, yogurt and full-fat milk. The market in the UK recorded a growth of 4.4 percent of organic milk in 2016.This was attributed to customers driven by the focus on health and wellness. With the Baladna focus on products like milk low-fat 1&2 liters, milk low-fat 1&2 liters, milk full fat 200ml and sweets are appropriate for the UK market. This is crucial because the UK consumer is concerned with health and wellness hence dairy products such as low milk fat, sweets, and full milk fat. In figure 1.2 shows the UK market grew by 0.4 % with a volume of 1,581.3 million kgs of dairy products in 2014 while it's projected to grow to 3.6% with a volume of 1,638.3million kgs of dairy products.
Phase 2.1: Foreign market Analysis
Baladna uses advanced generic scoring; they import health cows, goats, and sheep to ensure that they provide high quality. The company only uses Holstein comes which are believed to produce the most top daily animal products in the world. The company rears Awassi ewe sheep for milk production. Sheep milk contains minerals like zinc, vitamin B, calcium and phosphorus this is ideal for making cheese, and yogurt (Doh, Jonathan, 2005 p. 635). Hence Baladna is focused beyond nutrition content venturing to UK dairy market it will capture a market of consumers objective is healthy lifestyle Ewe Awassi milk is ideal for the UK market. Every home in UK one can find a dairy product with them hence make this dairy industry one of the highest degree of penetrating the market (Sadek, 2017).
Since the government campaign for free milk for elementary going school kids and discounted milk for both secondary and primary. This is a threat to new entry player since it may incur more costs to promotion, market product and yet give it free to children at school. The threat of culture translation since it's a new firm it may not be aware of new British needs on the dairy products but it may rely on statistics alone. The threat of price wars from the local firms selling the similar product such as Muller with 6.9% of the market share, Flora which has Lurpak and Anchor brands has 3% while Arla has 4.1% of the market share.
Baladna dairy company likely to face the challenge on market rivalry from UK based firms Flora, Unilever, Muller, and Arla will boost rivalry through price reduction, marketing wars, segmentation, and innovation to keep new entrant out of the market. The language barrier since Baladna is based in Middle East Arabic speaking nation while UK id an English speaking nation. The management needs to prepare and familiarize themselves well with British norms, cultures, norms, and belief very well. Legal matters is a challenge for any company going abroad like Baladna company need to understand legal surrounding involving hiring of workers, operating, work permits, recycling guidelines and Tax regimes. Challenge in fluctuating exchange rate since it cannot be planned or budgeted for hence a challenge to Baladna Company.
The Baladna can remedy language barrier through writing down specific instructions to her team member to follow this will reduce miscommunication an enable the team and groups to take the instructions with them. On legal matters I recommend Baladna hire a law firm to advise them extensively on operation laws, environmental laws, employment laws, Taxation regimes, withholding tax, VAT is advised by an accounting firm (Chung, Wilbur, and Stephen Yeaple, 2008 p.1210). For exchange rate fluctuations I recommend Baladna Company to enter it forward contracts in this it will assist it to enter a fixed exchange rates contracts that will help it anticipate her budget demands and targets in the UK dairy market.
Chung, Wilbur, and Stephen Yeaple. "International knowledge sourcing: Evidence from US firms expanding abroad." Strategic Management Journal 29.11 (2008): 1207-1224.
Doh, Jonathan P. "Offshore outsourcing: Implications for international business and strategic management theory and practice." Journal of Management Studies 42.3 (2005): 695-704.
Fearne, Andrew, and Stephen Bates. "What price a "pinta"? Differentiating the market for liquid milk: Results of consumer research in the UK dairy sector." British Food Journal 105.11 (2003): 756-770.
Hamad, Mohammed Nour-Eldin Farid, et al. "Effect of Addition Dates "Hayani" on Yield, Chemical Composition and Sensory Evaluation of Ice Cream." American Journal of Food Science and Nutrition Research 4.5 (2017): 170-176.
Sadek, Nashwa Nader. Company Benefits and Social Benefits: Exploring Strategies for Multinational Consumer Goods Companies to Implement Mutually Beneficial Social Marketing Programs. Diss. The Florida State University, 2017.
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