Blue Mountain Coffee Katelyn Blose Check to make sure you explain .
Blue Mountain Coffee
Katelyn Blose
Check to make sure you explain . . .
Page
Reference
1
Title page
2
Checklist
3
Summary Sheet
4
What is the purpose of your report?
Final-1.
5
Give details about your company (location, products, current sales, current locations, etc.)
Final-1.
6
What is your role in the company?
Final-1
7
What do you intend to achieve for your company in the (a) short-term (next few months) (b) long-term (next 5 years)?
Final-1, Final-2, Final-5
8
Which markets will you grow in? What entry modes will you use?
Final-5
9
How will you fund your company’s growth?
Final-2, Final-5
10
What is your company’s core competence? Which 1 or 2 functions/activities are central to the core competence? How will foreign expansion contribute to your firm’s core competence?
Final-3, Final-5
11
Which international business strategy best reflects your company’s internationalization plan?
Final-3
12
How will you minimize (1) transportation, (2) tariff, and (3) exchange rate costs that come with international expansion (cite at least 1 reference for each cost to substantiate your argument)
Final-3
13
How will you manage growth in terms of horizontal/vertical structure, integrating mechanisms, and controls?
Final-4
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Make sure to thank reviewers who helped you during discussions in the footnote/s.
Final-1.doc
Overview
My name is Katelyn Blose. I have been promoted to the position of International Operations Manager of Blue Mountain Coffee This is a response to our rapid growth in the Blue Mountain Coffee industry where we specialize in coffee. Our annual sales are currently $50 million. While our company is based in Montana, I am responsible for expanding our reach to Italy. I am evaluating whether to do it through exports or foreign direct investment (FDI). Exports can be through the local buying agents of two major international distributors: Royal Mile Coffee and Nature’s Flavors. FDI will require opening a branch office in either the capital city, i.e., Rome or in the commercial center, Venice. My choice will depend on which of the two channels can give me an average sale of $10 million per year within the next 5 years. If annual sales do not change over the years, foreign sales will be 5% of our total sales.
In the next few weeks, I will propose a plan on how the international operations will be managed and the products will be positioned in Europe. I hope you will find the discussion worthy of your attention and I look forward to your feedback on how to make the plan, and my position, more successful.
Growth Plan
Our growth plan is to expand the products we already produce into Italy. We believe our brand and flavors of coffee will sell rapidly and become a very popular product in Italy. Our product sales have been doing great inside the United States, so we believe expanding into Italy and, eventually other countries will only make our company better. As we expand into new countries, we will strive to make flavors that the locals will love. To be able to expand our business into new countries we will need money. We will be using a commercial loan to support our growth. This loan will help us with marketing, research, and distribution of our product inside Italy. We will be using Chase bank as it a top bank both within the states and internationally. They also have good interest rates for the loans we will need.
Core Competence
Blue Mountain Coffee’s core competence is represented by our unwavering focus on quality of our coffee beans and great flavors, as well continuous product advancement. We thrive ourselves on our fresh beans and processing as well as the many different flavors of coffee blends, we offer. We use only high quality and fresh products and that’s what makes our coffee stand out from other brands. Our production is responsible for our core competence. We focus on how we grow the beans and fly using fresh beans. We also only use fresh flavorings no extracts to bring those amazing flavors and aromas to the coffees that everyone loves to enjoy in the morning.
Blue Mountain Coffee matches all 4 VRIN. Our company’s core competence is valuable because our business is so successful from our high standard of our fresh coffee beans as well as the many natural flavors we offer. It is rare because not all coffee companies care about the freshness and quality of their coffee. Some only care about the cheapest way they can make and produce it to get it on the shelves and make a profit. We take our time growing our own seeds and processing them ourselves as well as only using natural flavors. It is very hard for competitors to imitate what we do. We use only our locally grown seeds, and we process them ourselves as well as local natural flavors are added to the coffee. Not many other companies can copy our work to get the exact delicious flavors we offer. The resources and ingredients we use cannot be easily switched out for cheaper or different ones.
Blue Mountain Coffee’s core competence is distributed across several functions. We will offer a variety of flavors especially in different countries that will cater to that region and what they like. Different flavors will be available in different countries unless we feel that some flavors will sell well in a few of the different countries we are expanding into.
International Business Strategy
Our International business Strategy is global standardization. All our offices operate the same and report back to our main office in Montana. Our company thrives on the freshness and quality of our product, and we expect that to remain the same no matter what country we are selling in. We also will use a lot of the same packaging, and branding across countries. We will add specific flavors that we believe will sell great depending on each culture and country we expand into.
Blue Mountain Coffee will be using a centralization. This will allow better structure in the company and better control. It will help keep all our products consistent no matter where they are made or sold. To horizontally structure out company we plan to use a global matrix strategy. This will allow all our departments to collaborate and communicate on marketing, expansion etc. plans more efficiently even in different countries and time zones.
Blue Mountain Coffee will use project teams. Project teams will allow us to launch new flavors and ideas that will be popular in Italy. The project teams will help us navigate the culture differences in the new markets we choose to expand into so that we not only can thrive there but also offer flavors that will be desired.
Personal Controls:
Personal: We will have an employee who is constantly checking in on our team in Italy to make sure the team is successful as well as selling products locals in Italy will want to enjoy as well as our original flavors.
Bureaucratic: We will have a small team keeping records on how the team overseas is following our procedures. They will also oversee financial reporting, marketing strategies, and employee conduct. They will engage in regular performance reports from subsidiaries to headquarters detailing key activities, allowing for close monitoring of our teams in other countries.
Output: A team will oversee making sure we reach our performance targets and goals such as revenue growth as well as meeting out sales goals, customer satisfaction and making sure the quality of our products remains the same.
Organizational Culture: Our team in Italy will be monitoring the sales and growth of our company and reporting everything back to our teams in Montana.
The best way for our company to transport our products into Italy from the states is through the very many ports in Italy.
Long-Term International Expansion/Growth Strategy
Three years from now Blue Mountain Coffee plans to expand to Germany and Brazil.
Blue Mountain Coffee will be expanding into Germany in the following years. Germany is a developed country with a good economy that will allow out company to thrive. Coffee is a central part of German culture and is a big part of their everyday life and we believe that our fresh coffee and many flavors will be great for the locals. For our entry we intend to enter via direct exporting. This allows us to move our products into Germany faster with the most profit.
Blue Mountain Coffee will also be expanding into Brazil in the following years as the merging country. We believe that adding our unique flavors will be a great addition to the coffee market already in Brazil. We will enter with a strategic alliance with a local coffee business. Brazil already has a goof coffee market, and we believe that offering our flavors and even creating new ones that we believe will add to the market will thrive there.
We believe out of the two markets that we plan to expand to that Brazil is the best one for a strategic alliance. Brazil already has great coffee market so it would be most beneficial for both us and them to offer or unique flavors to their business to sell. We chose to expand using a commercial loan with Chase bank. We believe this is still a good choice for our business as Chase does a lot with international businesses.
Our original core competence was focus. Our focus is on growing and making freshly grown and gowned coffee beans with many different flavors. We do not plan on changing anything about how we make our products as we expand so we believe that expanding to these markets will only make us better. Both countries already have a good market in either coffee production or sales so we think our products will only make their coffee makers better.
Our horizontal and vertical structure will stay the same as we believe they will both still benefit us in the new expansion. For our integration mechanisms we were using both project teams and liaison roles. These will remain the same as our project teams will have to continue to work to create different flavors that will thrive in each culture. Our liaison roles will keep all our teams communicating and working together as well as brainstorming new ideas for marketing, flavors and expansions.
Company
Blue Mountain Coffee
Product
Coffee
Home country
USA
Franchising/Licensing possible
Yes: Licensing
Vertical structure
Centralized
Horizontal structure
Worldwide area structure
Destination Country
Mode of Entry
Scale of Entry
Strategic Alliance
Development stage
Initial destination/s (short-term)
Italy
FDI
Large
No
Developed market
Future destinations (long-term)
Brazil
Joint Venture
Small
Yes: Government
Emerging market
Germany
Licensing
Small
No
Developed market