Business Strategy of Flower Exporter-Free-Samples for Students

Question: Discuss about the Business Strategy that would be helpful for an Australian Flower Exporter. Answer: Introduction The purpose of this paper is to make a business strategy that would be helpful for an Australian flower exporter, who currently exports flowers to the countries of northern Europe, but he does not export flowers directly to the customers or to the renowned florists of Europe, but he sells his freshly picked flowers to a middle man who exports the flowers. Thus, in this paper a suitable business strategy benefitting the Australian exporter is discussed, so that he could directly sell the flowers to the florists or customers to get the maximum profitability. Background Adam is an Australian wild flower farmer, who exports flowers to various countries of northern Europe as at the time of winter the local supply of flowers get reduced a lot due to fierce cold and at that time the price of the flowers get very high due to lack of supply. It is a matter of fact that in those countries there are many people who love to decorate their home with fresh flowers and they are ready to pay the extra price for that. Thus the high demand of flowers in winter has opened many opportunities for farmers like Adam, and he became one of the most important flower exporters in no time (Werren 2015). The main issue in this case is, Adam does not directly export the flowers to the customers or to the reputed florists of Europe, but he delivers his flowers to a middle man who buys flowers from him at wholesale price and exports those flowers with higher profit. In this scenario, Adam does all the hard work but he does not get the price he deserves, thus he should look up t o other ways to make connections and to export his flowers directly to the customers to increase the profitability. He knows that there are some rival organizations from various countries like Colombia, New Zealand, Brazil and South Africa but the demand of typical aussie flowers of Adam has helped him a lot to get large orders in the time of winter. Exiting business models Currently, there are a lot of organizations or individuals who are exporting Australian wild flowers to various countries of northern part of Europe. They are utilizing the high demand of flowers in the northern Europe during the winter and earning huge fortune in some seasons. To successfully run a business of exportation of flowers the organizations follow a few steps and those are mentioned in this section. The first thing before getting into flower exporting business is to secure a huge capital and a large infrastructure. If the exporter wants to buy flowers from the farmers and then export those then they would not be needing huge lands for the plantation, but in that manner the profitability would by significantly reduced. The next step is to do a thorough market research and making the apt business plan. The exporters need to make a thorough research about the demands of some specific flowers and they should start planting accordingly to get the most out of the business (Jamie son et al. 2012). The next step would be licensing for exportation, as the exporters would require a valid license to export flowers to other countries. After some vigorous market research it can be seen that, these successful exporters choose the specific flowers and send a sample to the florists where they are trying to export their flowers. When the florists respond positively, the farmers start planting trees according to the orders. The payments are done in two ways (Werren 2015). Either the exporters receive the entire money in advance as maintaining the trees to get the best flowers takes a lot of money and time, thus the risk factors would be lowered (MIRANYI 2014). On the other hand, some exporters take bank loans for the plantation works and they insure all the trees as if those trees die, entire hard work and investment would be wasted, and in this way the farmers would be much relieved from various tensions. The next step is after harvesting the phase of packaging. For p ackaging small business owners depend on other organization that does packaging works and some big organizations have their own packaging department to cut the cost (Gebreeyesus and Iizuka 2012). Then comes the final step and that is promotion of the business organization. organizations may start doing business in a small scale, but for further growth, they will be needing to invest a lot regarding advertising and promotional activities to get better results and to get known in the export market of flowers and this is how they can expect huge success within a short period of time. Business of exporting flowers is dependent on various factors like climate, transportation time, quality of the soil and more. In some cases, with ideal conditions, the plants die or cannot produce desired amount or quality of flowers due to various insect outbreaks, or decreased condition of the soil, temperature fluctuation and many more (Werren 2015). Thus being lucrative and with high profitability, so metimes the business owners have to go through some losses. Thus, one cannot rely on this business for a longer period of time, as on the day foreign countries will develop something to appease the demand of fresh flowers all these exportations would be stopped within a single day. Theories and concepts in strategy design Resource based theory: It can be said that any organization is full of resources and capabilities. These resources are made out of financial, intangible, human and physical assets. According to this theory, it is a matter of fact that resources re really not homogenous and there are some restrictions in their mobility, and the organizations can consider these resources and capabilities as an advantage strategically, if there are ample demand of their resources. Transaction cost economics: TCE theory explains that the market would not be the same and it may lose its efficiency over time regarding its capability of organizing the economy (Werren 2015) . There are some cases, where the organizations are better at transactions, due to the agents who populate the both end of the transaction are bounded rational and in some cases they sign contracts in imperfect way and in these types of cases many issues come up when these agents act like opportunists. Resource dependence theory: This theory projects that there are no organizations who can secure their capabilities and resources required to sustain without consulting with other organizations or individuals beyond their area of operation. It is a fact that organizations would naturally want to control internally and externally the resources in situations with challenges and improve their chances of sustaining by adapting the challenging situation. To be precise, it can be said that, this theory highlights the fact that, the organizations must get engaged in cooperation and competition (Idris, Singh and Praveen 2015). Strategic management framework: this very concept promote the systematic approach towards strategy formulation which is rooted in the goal of the organization and determines the actions and options opted by the organization to attain the goal. The missions or goals form a basis for the specified targets that the organization would like to achieve (De and Singh 2016). This also states the nature, extent and form of evaluation of the organization and the environment of their area of operation and also the decisions taken by the organization. Knowledge based view: The companies or organizations are a heap of knowledge and in this theory and that somehow extends the resource based view. Knowledge is the most important factor for any business organization as without proper knowledge about the things regarding their business they would not even survive for a month and get lagged behind in the market. There are some critics who do not consider knowledge based view as a business theory, it is something without which no company would have ever taste the success in the ever changing market (Gnasekaran et al. 2012). Alternative strategy I To export the fresh cut flowers to northern part of Europe, some basic strategies should be maintained to keep a successful business running. Adam according to the case study is a farmer who grows exotic wild flowers in his land, and there is a middle man who buys flowers from him in whole sale prices and exports them to Europe keeping huge profit percentage (Gnasekaran 2012). Adam does not have any kind of contact with his real customers and globally his recognition is nil. That is why; Adam is trying to slowly starting exporting his flowers all by himself. He can invest some more money to improve the infrastructure and invest further for technological advancements so that he can harvest more flowers and his flowers would be qualitatively of higher quality and they might be able to adjust more with the lengthy process of transportation before it reaches to its original customers. The flowers should be in good condition to get sold and that is why upgrading the quality of the flowers should be the first priority of Adam. If Adam plans for making the investment bigger and to start up in a huge scale, he can start a new packaging department, and so he would not have to pay any other company for the packaging procedure (De and Medhi 2015). Alternative strategy II Adam should prepare a plan B as another business strategy. In this plan B, he can aim to use hydroponics way to plant more trees in a smaller place and harvest more flowers each season generating more profitability. Apart from this, Adam can sell some of his flowers to the middle man like before to allow a moderate cash flow in his organization and he can sell the rest of the flowers directly to the florists of Europe to ensure that he get the best value for his flowers (Werren 2015). He should make a thorough research before executing his plans (da Silva Vieira, do Nascimento Somoes and de Souza 2014). He should recruit more employees to increase the productivity so that he can be able to export in a lot higher rate (Gebreeyesus and Iizuka 2012). Adam should get the idea that the difference of monetary value of Australian dollars and euro, as his investments would be in Australian dollars but he would get the profit money in Euros, and Euros generally have a lot higher value than Au stralian dollars and that is why there should not be any matter for concern initially, but he should check the ups and downs of the monetary value of both the currencies (Balladares, Mera and Fagan 2014). Adam can start a webpage for promotion of his organization by giving it a catchy name so that people get attracted to it and gather some information about his organization and how they work. These will eventually pull up the profitability of Adams organization. Adam being an ambitious and a wise man, he got the point that the way he was dealing with the middleman, all the hard work was done by him (Balladares, Mera and Fagan 2014). Every responsibility was on him, but he was deprived of the money he deserved and he did not get the proper recognition too. No one knows Adam as a farmer there, the florists of Europe only knew the middle man as an exporter. Recommended strategy At this moment according to the case study it would be wiser if Adam chooses the second strategy to expand his business towards the next level. This is because, by choosing the second strategy, he would not have to risk a lot of money, and he would receive a moderate yet regular cash flow which is very important for any business organization and especially like an organization which is trying to trade internationally (Benson-Rea and Stringer 2015). Choosing the second strategy, Adam would not need to risk his money or reputation at once. Trading flowers any day comes with many risks, especially because it is very much dependent on various factors like temperature, humidity, lighting and many others, and if he has a steady cash flow end of each season and that is a secured sum, he could gather the enthusiasm and money to embark on a risky business like going international (Werren 2015). Prospects for success Looking at all the factors, it would be wise to come to a conclusion that if Adam chooses the second strategy to expand his business he would be a bit hassle free as he would anyhow receive a steady cash flow. At this time Euros value is way high than Australian dollars (Benson-Re. and Stringer 2015). Thus the investment of Adam would be much lesser than the basic profitability he can anticipate. If he research the market very well before putting any effort regarding plantation there would be a 90% chance that his venture will be successful. Going international is not a matter of joke, and a man like Adam, who is ambitious and hard working, can easily climb up the ladder of success in a short period of time. Adam will be needing to recruit some more employees to increase the productivity and he must pay some attention in the transportation. The more the transportation time get reduced the fresher his flowers will be and the more it will increase their salability. Adams chances of inc urring loss would be very less as he is investing Australian dollars and yielding profit in Euros, so that would give him a huge boost in the profitability. The only problem that can become serious is that presently, no one knows Adam and he does not have a reputation or good will in the land of Europe, as everyone know that middleman who plays the role of the exporter (Muhammad et al. 2016). Thus Adam initially may have to wait for a couple of seasons to establish his brand in the market of Europe and that would not be much of a problem as qualitatively he would be providing the same flowers, so he would not face a hard time in convincing the florists of northern Europe. Thus, it can be said that, though expanding a business globally may not be a easy task, but if anyone chalk out a plan with a solid foundation of a good business strategy and the level of execution the plans are seen good then it would not become a problem in setting the business and going international. All he nee ds to do is research more as the productivity was always good when he used to supply for the middleman. Adam does not need to think much abut the productivity as he already attained that , so the only thing left is building the reputation, or increasing the brand value. 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