Valagro Company: Global Markets, Effective Strategies, and Business Success - Essay Sample

Introduction

Valagro Company produces and sells nutritional products used in the agricultural sector. Valagro is one of the leading producers of agricultural materials in the world (Ferreira et al., 2019). Valagro Company distributes many products that include pesticides, micronutrients, fertilizers, and other agrochemicals. Venturing into global markets has been one of the strategies applied by Valagro Company to improve its sales and overall business success. The development of effective operational strategies is one of the leading roles of the Human Resource Department at Valagro Company (Ferreira et al., 2019). Licensing, Export, Alliance, and Direct Investment Framework is used in analyzing the business strategies developed and applied by Valagro Company in improving its sales in global markets. OLI framework will be used in developing the compeling business strategies for Valagro Company (Agarwal & Wu, 2015). This paper provides comprehensive information on the development of effective strategies for Valagro Company using the OLI framework.

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Business Strategies for Valagro Company

The incorporation of the OLI framework is important in enabling Valagro Company to identify three important advantages before venturing into global market operations (Ferreira et al., 2019). First, the determination of ownership advantage is essential because it enables Valagro Company to determine appropriate strategies for improving the quality of its products. Secondly, location advantage must be assessed to determine the potential markets for the company. Lastly, internalization advantage is used in applying the foreign direct investment strategy for improving business operations in other parts of the world (Agarwal & Wu, 2015).

Licensing in Argentina

Argentina is one of the leading exporters of corn and soybean in the world (Leguizamon, 2014). Argentina is a potential market for Valagro, especially fertilizers and pesticides. Valagro is required to ensure that all potential customers receive licenses through their authorities to enable them to engage directly in all business activities. According to the OLI framework, location advantage enables the business organization to identify its potential customers and strategies on how to improve their relationship. In this case, Licensing is a business strategy that maintains a good relationship between producers and consumers. Also, licensing prevents consumer exploitation and promotes satisfaction. Some of the challenges faced by Valagro Company in Argentina include price fluctuation and drought (Leguizamon, 2014).

Drought affects the quality of agricultural products in Argentina; therefore, lowering the purchasing power of the country. The fluctuation in the prices of corn, soy, and other crops affects the government's development plans and lowers the economy of Argentina. Licensing is a business strategy that enables Valagro Company to identify solutions for minimizing the negative impacts of the agricultural challenges encountered in Argentina (Leguizamon, 2014). To improve its business operations in Argentina, Valagro Company is required to offer practical licensing guidelines to the government of Argentina to help in preventing the negative impacts related to drought and fluctuation. Also, it will solve the complaints made by the farmers demanding insurance. Licensing ensures that quality insurance policies are implemented to boost farmers in their operations; especially when they encounter losses related to price fluctuation and drought.

Licensing is also crucial because it ensures that the farmers receive quality products from Valagro; therefore, solving the problem of price fluctuation (Leguizamon, 2014). Valagro can mobilize the government of Argentina to license all agricultural activities to increase its sales in the country. Also, insurance and licensing extend credit services to farmers; therefore, enabling them to continue purchasing agricultural inputs from Valagro Company.

Export to Zimbabwe

The Zimbabwean population is growing rapidly; therefore, necessitating for the production of enough food to feed all people (Mafundikwa, 2014). More than 1.8 trillion tonnes of corn are required every year to adequately feed the growing population in Zimbabwe (Mafundikwa, 2014). Zimbabwe important most of the agricultural inputs. Valagro Company should utilize this business opportunity and increases the numbers of agricultural products and tools exported to Zimbabwe. Also, the government of Zimbabwe is developing and implementing agricultural plans that will help in reducing the importation of foodstuffs. In this case, Zimbabwe imports a lot of agricultural inputs like machinery, fertilizers, and agrochemicals to maximize production in the country. Valagro Company is supposed to export quality products to Zimbabwe and improve their corporate relationships.

Some of the challenges faced in Zimbabwe include a lack of support from the government (Mafundikwa, 2014). Valagro can expert their agricultural products to Zimbabwe at affordable prices to avoid exploitation of the farmers. Also, Valagro may export their products to Zimbabwe through credit services. The Zimbabwean government must be liable for any loans and credit services offered to the farmers. All farmers receiving fertilizers and other agricultural products on credit are required to make payment after selling their crops.

Another challenge encountered by Valagro in Zimbabwe is the inability of farmers to pay their loans. The use of traditional agricultural methods lowers productivity in Zimbabwe; therefore, farmers do not get enough returns to pay the loans and sustain themselves (Mafundikwa, 2014). Valagro has exported different types of machinery to improve agricultural activities to increase productivity in Zimbabwe. The application of mechanization has diversified agriculture and created a potential global market for Valagro to export its products.

Direct Investment in India

Agriculture is the backbone of the Indian economy because the large population relies on rural income. Agriculture is the main source of rural income in India. The ability of agriculture to influence economic growth in India has declined due to the advancement of the industrial sector. More than 70% of the Indian population lives in rural areas and engage in different agricultural activities (Acharya & Das, 2012). Also, national food security in India is based on fruit, meat, vegetable, milk, and cereal production. A productive, diversified, and competitive agricultural sector has to be established to ensure consistent food supply in the country. India is the main international agricultural powerhouse. In this case, India is the leading in the production of milk, wheat, cotton, rice, sugarcane, farmed fish, vegetables and fruits.

Making a direct investment in Indian will boost the productivity of agricultural activities conducted by all farmers in the country. The World Bank is providing fundamental financial support to the poor people in India (Acharya & Das, 2012). Also, the direct investment made by Valagra will facilitate agricultural diversification in India and improve the lifestyles of the poor people. The diversification and improvement of agricultural productivity are important in promoting the purchasing power of the farmers. For example, diversification of agriculture leads to the introduction of modern techniques that require a lot of input. The farmers will purchase the agricultural inputs from Valagra; therefore, increasing its sales in the Indian markets.

Strategy Implementation Plans

The implementation of the developed business strategies involves the participation of different departments in Valagra Company. Also, the implementation of the strategies involves various operations conducted by Valagra's management to improve attain business success and ensure corporate responsibility. Some of the operations include the education of farmers and group representatives on how to improve the productivity of agricultural activities and the provision of credit services (Ferreira et al., 2019). Also, human resources must be employed in sensitizing farmers on the importance of diversification in agriculture. Marketing strategies like product mix and pricing are applied to increases the global performances of Valagra Company. For example, the marketing groups or personnel of Valagra Company are required to apply their skills in determining appropriate global markets based on the guidelines provided under the OLI framework.

Financing operations must be considered to prevent Valagra from incurring losses from its operations. For example, the Valagra assesses its financial plans; especially the amount of money spent on giving out products on credit and loans. Normally, Valagra experience various challenges in its global operations (Ferreira et al., 2019). Some of the challenges include limited water sources, lack of modern agricultural machinery, and the inability to reduce poverty in rural areas. The challenges encountered in India affect the performances of the alliance formed by Valagra. Drought is another challenge experienced by Valagra Company while operating in foreign countries. For example, drought is a common challenge reported in Zimbabwe and Argentina.

Conclusion

In conclusion, Valagra has entered into global business operations in India, Zimbabwe, and Argentina to maximize their profits and achieve corporate responsibility. Valagra Company should develop appropriate policies and regulations to guide in all business operations. The incorporation of human resources and marketing policies is crucial in minimizing the chances of incurring losses. Valagro Company should produce and distribute quality products into the global markets to ensure corporate responsibility and increase its competitive advantages.

References

Acharya, N., & Das, S. (2012). Revitalizing agriculture in eastern India: investment and policy priorities. IDS Bulletin, 43, 104-112. Retrieved from: https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1759-5436.2012.00352.x

Agarwal, J., & Wu, T. (2015). Factors Influencing Growth Potential of eCommerce in Emerging Economies: An InstitutionBased NOLI Framework and Research Propositions. Thunderbird International Business Review, 57(3), 197-215. Retrieved from: https://onlinelibrary.wiley.com/doi/abs/10.1002/tie.21694

Ferreira, R. B., Leonel, S., de Souza Silva, M., Souza, J. M. A., Bolfarini, A. C. B., Modesto, J. H., & Artigiani Filho, V. H. (2019). Induction of Sprouting on Physicochemical Profile and Bioactive Compounds in Peach Cultivars by Foliar Applications. Idesia, 37(2), 51-58. Retrieved from: https://dialnet.unirioja.es/servlet/articulo?codigo=7110095

Leguizamon, A. (2014). Modifying Argentina: GM Soy and Socio-Environmental Change. Geoforum, 53, 149-160. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0016718513000730

Mafundikwa, I. (2014). Zimbabwe's Farmers Struggle to Feed the Nation. Africa Renewal, 27(4), 10-11. Retrieved from: https://www.un.org/africarenewal/magazine/special-edition-agriculture-2014/zimbabwe%E2%80%99s-farmers-struggle-feed-nation