Defining strategic option
A conduct of SWOT analysis would be the most ideal to identify the key resources and performances of BRF to evaluate the choices of whether not to enter an international market.
Strength
− The efficiencies from the merger would potentially lead to lower domestic prices.
− BRF dominates the market share in Brazil (60%-80%) over several processed food categories with its operational excellence (98% population reached by distribution, Information System Development), brand/marketing management (BOVESPA has rose 9.8% due to the strength of the two brands even after CADE’s ordeal). While they currently control 9% of the global protein trade, as they implement the internationalization, they would be able to transfer those …show more content…
While continuing to expand domestically, the CADE’s ruling creates a limited environment for BRF to fulfill its purpose of doubling its revenue in 5 years. Internationally, despite the capability of applying the experience that BRF has with Agricultural transformation and Cultural resemblance, African consumers lack the ability to generate margin while Latin America lacks the food demand to generate the sales volume. In both the case would not fulfill the company’s core intension to dramatically increase the net sales. As for the Middle East, the unstable social and political environment increases BRF’s operational risk, which BRF have not succinct experience with. Therefore, China appears to be the most ideal environment for expansion because of its massive consumer purchase (2.1 million tons) of frozen processed foods and its estimated demand of importing a kilo of meat per capita per year by 2020. Meanwhile, the major drawback to expand in China is its fragmented cold chain infrastructure. It happens that BRF has succinct experience dealing with areas that has less developed cold chain capability; moreover, BRF could focus on shelf stable product and consider building its own cold-chain capability. Therefore, with massive demand and solvable drawback, China becomes the first choice for BRF’s international expansion. There is great potential of growth in the market and company’s strong logistics can meet the weak cold chain infrastructure of
A conduct of SWOT analysis would be the most ideal to identify the key resources and performances of BRF to evaluate the choices of whether not to enter an international market.
Strength
− The efficiencies from the merger would potentially lead to lower domestic prices.
− BRF dominates the market share in Brazil (60%-80%) over several processed food categories with its operational excellence (98% population reached by distribution, Information System Development), brand/marketing management (BOVESPA has rose 9.8% due to the strength of the two brands even after CADE’s ordeal). While they currently control 9% of the global protein trade, as they implement the internationalization, they would be able to transfer those …show more content…
While continuing to expand domestically, the CADE’s ruling creates a limited environment for BRF to fulfill its purpose of doubling its revenue in 5 years. Internationally, despite the capability of applying the experience that BRF has with Agricultural transformation and Cultural resemblance, African consumers lack the ability to generate margin while Latin America lacks the food demand to generate the sales volume. In both the case would not fulfill the company’s core intension to dramatically increase the net sales. As for the Middle East, the unstable social and political environment increases BRF’s operational risk, which BRF have not succinct experience with. Therefore, China appears to be the most ideal environment for expansion because of its massive consumer purchase (2.1 million tons) of frozen processed foods and its estimated demand of importing a kilo of meat per capita per year by 2020. Meanwhile, the major drawback to expand in China is its fragmented cold chain infrastructure. It happens that BRF has succinct experience dealing with areas that has less developed cold chain capability; moreover, BRF could focus on shelf stable product and consider building its own cold-chain capability. Therefore, with massive demand and solvable drawback, China becomes the first choice for BRF’s international expansion. There is great potential of growth in the market and company’s strong logistics can meet the weak cold chain infrastructure of