Business Strategy
It is worth mentioning that a business could not thrive if strategic planners fail to estimate and analyze the potential and actual risk factors. In addition, the top managers are also liable to evaluate various strategies in going global and to choose the best business strategy and approach for value creation and long term financial growth in lucrative foreign markets.
Wheat producers and traders from USA should choose export entry strategy because this is the traditional method of selling wheat in foreign markets. Indeed, the commercial exporters and trading firms (who have not established trade partnerships before in Morocco i-e entering first time for a business transaction) should commence this venture by contacting US Commerce and trade development / promotion departments, which has complete updated records (trade directories) of Moroccan importers. In addition, the departments also have merchandise enquiries that they tend to receive from interested parties across Morocco. Indeed, the government personnel would not only assist in documentation process and fulfillment of legal formalities but also would inform about business facilities, rebates and guarantees traders are going to receive when exporting from US government platform. The most important point is that department personnel provide guidance, especially, regarding the credibility of grain importers followed by an estimation of costs (other than purchases - freight, transportation, port duties, insurance etc.). Nevertheless, it would also be feasible to commence Morocco export project through an official government channel (rather simply starting by utilization of personal contacts) to be on a safer side when the importer delays payment, goes bankrupt or just refuses to pay the agreed upon amount. Obviously, in such cases, the US government could use diplomatic power to force Moroccan officials to intervene and avoid breach of contract, thereby protecting US exporter’s interest and financial assets.
It should also be emphasized that US wheat exporter could start new venture by exporting medium quantities (for example 2 - 4 containers per month of 15 tons each) to one buyer in first few 3 months of operations. This would facilitate the firm in judging the importer’s performance and strengthening its relationship. Hence, if buying party meets the performance criteria and all contract terms then the exporter may advance into Moroccan market by selling quantities in bulk.
Having discussed the export strategy, I would now like to throw light over internal operations strategy which is also of significant importance in an unpredictable international grain market where prices fluctuate on daily basis. Indeed, the exporter should thoroughly study changes in US and Moroccan wheat production / output details to make procurement decisions and to forecast price changes in future. In conclusion, a grain exporter could not succeed in 21st century if he fails to study market changes (and if he has poor forecasting abilities).
Reference:
Business math problem as well as case study involves some numbers and decision-making processes.
