well yes, the company as a whole should go global and it is a good thinking that Mr krishnan has made and i think he is right because the indian foods market in the countries like the brazil, usa, canada etc is more and the demand is going to be more in the coming years and the strategy i would suggest would be to make a JV with a local food processing company in the USA market so that it caters the products to the USA and canada markets, in this way both the companies are profitted,next is the growing brazilian and other african markets, i would make a brazilian subsidiary and cater it the products to the brazilian and the african markets, after few years the company as a whole can think of enhancing the capacities thro M&A route. the initial capacities of the factory may be started with about 1 million units.
Well as part of expansion SIF should go globally but following points should be given a glance when u go global. 1)Penetration a global market is difficult-there may be solution on your side itself,like having tie up with some marketing firm-but even though we are on expanding the market we dont have to loss the Quality of the product. 2)Price matters a lot-if we are in tie up with some marketing firm in US or UK-the price has to be increased that may cause loss of goodwill of company 3)Its is far better to merge with some Small sector food products there in UK or US, so that increasing quantity of preservatives can be decreased eventhought SIF is using natural preservative(Save Preservative cost) 4)Appointing few good Manager for International marketing/sales purpose who have good knowledge abt management..its doesnt mean prior experience..those who have talents that what i mean.. 5)As you might heard of Mc Donald pizza case..when they first introduced there NON veg products in india where Veg product were given much priority..they also flopped..So you should mind few thinks like reputation or market leader can even flop..So have nice strategy before u move on 6)First Localize the product-even if your target group is indian.. 6)Diversification of your product category essential...
I think SIF should wait for feasibility study ,If SIF try to export directly from India to Europe or US thier expiry return will increase that could be problem for SIF to handle. If feasibility study favours lauch of thier products to these market .Tie up with local parteners in those countries should be better choice
I feel now the current situation in India is to think Global and work towards that direction.
My definite answer will be that SIFL should export to US and UKand North American market where Indoan population is sizeable and also the localites over there are not aversed to trying our food.
My option to do is the option III : We need to set up a unit or select a franchise in North America. We need to establish the process, packing as per their country standards and distribute there. The main reasons are: 1. Whatever said and done US,UK and north american people are more fussy to accept directly imported food stuffs from India due to their low level of confidence of our quality. 2. Since it is food items the shelf life is going to be low and we need to ensure that the packed product reach the end customer as early as possible and preferably in a days time. 3. If we need to produce and pack in country specified packings and then the freight element and logistics is going to be a main issue and getting the food packs to export directly to niche markets is going to invite the risk in case of any quality complaints.
4. We can keep the senior person like Mrs. Maya to start with and establish the quality and production systems and get the local quality accrditions and publish the qccredition details in the packing and see the sales. It will be definitely peaking with the time. 5. SIFL to go in a big way and they can do really a great job sitting in North America. Baskar
SIF has come a long way and has strong a strong base in india. 1)MARKET RESEARCH The company first needs to do a market study. It has to do an extensive market research with the help of an external marketing research company before it tries any of the markets. Because people%u2019s lifestyle change with the change of place. 2)FUNDING : If the market research is favorable, the next step is to think about how it will finance the expansion. The company already has reserves of 52mn plus profits of 12.5mn. However to increase production capacity, and for the initial expenditure involved etc the company would either have to borrow money or go public by issuing shares. 3)PRODUCTION : The cost of labor as well as raw materials is relatively cheaper in India, than in US or Europe. Hence it is would be a wise decision to continue production in India and increase its production capacity to cater to other markets. 4) DISTRIBUTION : SIF can have a joint venture with the local companies in US and Europe, since they will be having knowledge of the local markets. It can use its distribution channel to the best possible extent. Once the company understands the market and develops a good relation with the distributors it can float on its own. 5) MARKETING : Different people have different cultures and even the colors the presentation the medium everything depicts a different picture in different places. Hence there is a necessity to involve local marketing agency. A tie up will bridge the cul
RE:Study before you Act!
by on Jun 18, 2007 03:10 PM Permalink
yes sif has to consider going global 1.As for the asia pacific comprising of singapore malaysia philipines and srilanka which have a large south indian diaspora the product can be manufactured in india and sold there without any problem because the travel time is an average of two and half to 4 hours the product shelflife will not be affected and there will be no need to add more preservatives.The Australian market which also has a huge south indian student and young working professional population will also be a good market but the production has to be done there itself for idly and dosa batter while pastes and pappads can be exported from here.so a small production unit has to be established there.As for the US UK and european markets a production unit can be setup in canada for the batter and exported to these countries.The papad dryfloor and pickles can be exported from india.Both the US and Cananda will turn out to be very good markets because of a good network of INdian grocery stores which are hughely popular with the diaspora.the pastes which are at present packed in jars have to be packed in leak proof aluminium satchets because it will occupy less space and consequentially lower freight charges.AS for the procurement of pulses the company cna consider importing form myanmar which is a cheaper source as compared to AP and TN.The company can also consider Mobile selling vans in Rural areas for Batter and packaging pastes in smaller satchets to attract rural markets t
SIF should add various food specialites of various regions in India to their product range. Except for a few South Indian and Punjabi food items many other delicacies are not popular enough. SIF should bring all such products under one roof by setting up shops everywhere in India and abroad.
I WOULD LIKE TO BRING SIF MANAGEMENT ATTENTION OVER SOME CONSIDERABLE POINTS:- 1. SIF STILL COULD NOT CAPTURE THE ENTIRE INDIAN MARKET WHICH IS VERY HEALTHY FOR SIF PRODUCTS 2. EVEN HAVING GOOD MARKET IN SOUTH INDIA WITH SIF , THEY HAVE TO FACE COMPETITION IN ITS OWN HOME MARKET THEREFORE TO KEEP THE MARKET IN SIF FAVOR THEY HAVE TO PUT MORE INFRASTRUCTURE OVER HERE IN INDIA 3. TO ENTER IN TO NEW MARKET NOT ONLY MEAN TO INTRODUCTION OF THE PRODUCT BUT THE CONSUMPTION OF THE PRODUCT. THEREFORE SIF HAVE TO CHECK HOW BIG MARKET IS THERE IN THE US TO CONSUME A PARTICULAR FOOD PRODUCT OF SIF WHICH ARE NOT EVEN CAPTURE ENTIRE INDIAN MARKET AT GOOD LEVEL 4. MOST OF THE SIF PRODUCTS ARE RELATED TO INDIAN TYPE WHICH CAN COMMONLY CATCH THE INDIAN COMMUNITY SO SIF HAVE TO CHECK THE OTHER COMMUNITY RESPONSE ABOUT THE PRODUCT 5. MUST HAVE TO COMPARE SIF PRODUCT WITH OTHER ESTABLISHED FOOD PRODUCERS IN THE US MARKET THOSE ARE VERY PROFESSIONAL FOR THEIR PRODUCT SALE 6. SIF%u2019S SATING UP PRODUCTION UNIT IN THE US MEANS INVOLVEMENT AND DIVERSION OF THE INFRASTRUCTURE AND ATTENTIONS DUE TO VERY HIGH COMPETITION IN THE US FOOD MARKET
ALL OVER VERY FIRST SIF SHOULD GO FOR A LARGE INDIAN MARKET AND INCREASE THE PRODUCTION BY MAINTAINING DEMAND AND SUPPLY AND BY MANAGING COMPETITORS AND START EXPORT FIRST TO US MARKET AND AFTER CHECKING THE DEMAND AND SUPPLY OF THE SIF PRODUCTS IN THE US MARKET SIF SHOULD GO FOR ESTABLISHING THE PRODUCTION UNIT THERE SUSHIL KUMAR (GM), BKP SHIPPING
THIS IS THE AGE OF GLOBAL MARKET NO%u2019S OF COMPANIES ARE GOING GLOBALLY. SO SIF SHOULD THINK OVER IT TOO. BUT HERE I WOULD LIKE TO BRING SIF MANAGEMENT ATTENTION OVER SOME CONSIDERABLE POINTS:-
1. SIF STILL COULD NOT CAPTURE THE ENTIRE INDIAN MARKET WHICH IS VERY HEALTHY MARKET FOR SIF PRODUCTS 2. AS SIF IS A SOUTH INDIAN BASED CO. AND PRODUCING MORE SOUTH INDIAN BASED PRODUCT WHICH CAN ATTRACT OTHER PART OF THE COUNTRY 3. EVEN HAVING GOOD MARKET IN SOUTH INDIA WITH SIF , THEY HAVE TO FACE COMPETITION IN ITS OWN HOME MARKET THEREFORE TO KEEP THE MARKET IN SIF FAVOR THEY HAVE TO PUT MORE INFRASTRUCTURE OVER HERE IN INDIA 4. GO GLOBALLY MEAN BEST HOLD IN HOME MARKET AND FOR THAT IN EVERY CORNER COMPANY%u2019S BRAND NAME SHOULD BE WHICH CAN BE POSSIBLE THOUGH ADVANCE ADVERTISING E.G. MEDIA ADVERTISING WHICH IS NOT USING BY SIF AS PER ARTICLE EXCEPT OLD MEANS OF PRODUCT PROMOTION 5. SIF SHOULD TAKE EXAMPLE OF OTHER INDIAN & FOREIGN COMPANIES THOSE ARE ENTERING IN TO OTHER MARKET AFTER EXCELLENT PERFORMANCE IN THEIR OWN HOME MARKET 6. TO ENTER IN TO NEW MARKET NOT ONLY MEAN TO INTRODUCTION OF THE PRODUCT BUT THE CONSUMPTION OF THE PRODUCT. THEREFORE SIF HAVE TO CHECK HOW BIG MARKET IS THERE IN THE US TO CONSUME A PARTICULAR FOOD PRODUCT OF SIF WHICH ARE NOT EVEN CAPTURE ENTIRE INDIAN MARKET AT GOOD LEVEL 7. MOST OF THE SIF PRODUCTS ARE RELATED TO INDIAN TYPE WHICH CAN COMMONLY CATCH THE INDIAN COMMUNITY SO SIF HAVE TO CHECK THE OTHER COMMUNITY RESPONSE ABOUT THE PR
There should not be any problem if the company decides to go abroad. As the products are famous worldwide and there is no competition for the products why not give it a try.
The company can start from a country where the Indian population is the maximum and then expand further learning from the experience.
As the number of Indian's settling abroad is increasing there will no derth of customers for the company.
