There are various strategies of expanding one’s business. The decision of which strategic move to choose is generally depends on internal conditions of the business in discussion. There are companies that manage to stay in their local markets and continue to harness growth from it, while others discover potential markets in foreign countries that drive them to expand. In the case of business expansions, there are also several choices to be made.
These choices are also made based on internal and external conditions of particular industry that would favor the decision to expand in the countries. One factor to be considered when deciding the business expansion is about the product whether it has adequate demand in the target market or not. Concerning this market expansion, this paper will discuss about marketing Emirates dates in Sweden. This is considered a challenge as dates are particular well-known as beneficial fruit especially for those living in Arabian countries and also for other Moslem countries.
However, marketing this product into western countries still has opportunity as dates contains many kind of benefits such as rich of fibers and also contain uncountable mineral like calcium, magnesium, phosphorous, potassium, and iron, to name a few (Adnani, 2010). 2. The history of Emirates Dates Emirates Dates (www. emiratesdates. com) was established in 1989. Tens of experience and maintained quality of dates have put the company to be the leading exporter of dates in Middle East. The company major dates plantation is at Al Ain and Ras Al Khaimah (see Figure 1).
Figure 1 Location of Emirates Dates’ major palm field Source: http://www. scubadiving. co. za/images/Dubai%20UAE%20map. gif Due to the abundant of dates that far beyond the consumption in local market, the company decides to export the dates into foreign countries. In order to win the target markets that are not accustomed to eating dates, the company focuses on developing the campaign regarding the benefits of dates for health, which consists of many kinds of mineral, vitamins, sugar etc (Emirates Dates, 2010 – Profile).
Figure 2 Products of Emirates Dates Source: http://www. emiratesdates. com/products. html In addition, unlike producing and exporting the fruits, Emirates Dates also produce a wide range of products ranging from Dates Syrup, Date Palm Trees, Dates in Book Shape, Press Pack, and Almond Stuffed Dates. This diversification favors the company to attain success in exporting dates product into the world. One contributing factors that help the company to attain remarkable success in the Dates business is special attention from President of the U. A.
E, His Highness Sheikh Zayed Bin Sultan al-Nihyan, who concerns about the development of agriculture sector by cultivating of millions of date palms (Emirates Dates, 2010 – Profile). Figure 2 Top ten Dates-producing countries Source: ADMC, 2001 As shown in the figure 2, UAE is among the top-ten producing countries of Dates. Emirates Dates itself has capacity of 700 tones per annum, contributing the major production in the U. A. E. this represents the massive growth as in the first year, the company’s production capacity is about fifty tons and grow into 70 tons per annum in 1996.
3. A general overview of Emirates Dates and Sweden 3. 1. Overview of Emirates Dates United Arab Emirates is among top producers’ countries for Dates fruit where the country has over 40 million palm trees in which 40% of this number located in Al Ain city. The main producing city is in Ail Ain. This vast number of Dates production represents about 60% of total agricultural commodities in the U. A. E (Fresh Plaza, 2007). The reason of choosing Emirates Dates in this case study is because the company has major plantation in Al Ain city and Ras Al Khaimah.
As Emirates Dates has major contribution to the production of Dates in the UAE and due to the fact that the country is among top-three producers of Dates after Egypt and Saudi Arabia. This condition put opportunity for UAE, especially Emirates Dates to export to foreign countries. This also helps the countries to relocate abundant volume of Dates about 60-80 tons per annum that usually unconsumed (Fresh Plaza, 2007). This condition further will provide many opportunities for Emirates Dates to export it with a wide range of margin to sell a large volume of Dates (Fresh Plaza, 2007).
In, addition, as the products is common snack in Arab countries; the target market should be those who have large population of Arabian people overseas or those who have great concerns about natural products, which enriched with benefits for health. 3. 2. Overview of Sweden 3. 2. 1. Country Background Sweden, also refers to Kingdom of Sweden officially, is a Nordic country in Northern Europe that is considered to be the most visited country among Nordic countries with over 5. 2 million visitors in 2007.
The country that has population about 9. 2 million people occupies the area of 449,964 km2 (173,732 sq mi), which considered being the largest country in Northern Europe and fourth largest in Europe. The country is member of European Union since January 1, 1995 (Central Intelligence Agency, 2008). The country’s natural resources compose of several products such as iron, hydropower, and timber. Those natural resources become the key competitive advantages of Sweden in international trading.
Moreover, the agriculture contributes only 1% of GDP and 2% of employment (CIA, 2008). As part of stimulating the further economy growth, recently, Swedish government announce their plant to divest about $31 billion of state assets within the next three years in order to pay down the federal debt (CIA, 2008). t Agency, 2008e S 3. 2. 2. Economic Profile Furthermore, from economic point of view, Sweden has the biggest GDP compared to their Nordic countries counterparts. In 2007 alone, Sweden has $455. 3 billion (GDP in official exchange rate) and $338.
5 billion of GDP (purchasing power parity). In addition, the country also has the GDP per capita exceeded $37,500 in 2007 (CIA, 2008). Meanwhile, like most of the modern countries of the western, most of the GDP comes from the services sector (69. 7%), followed by the industry sector (28. 8%), and agriculture (1. 5%) (CIA, 2008). Figure 3 shows the real GDP growth of Sweden. Figure 3 Read GDP Growth of Sweden Source: Plumbot, 2008 Sweden has low inflation rate in the Nordic countries, 2. 2% in 2007.
This reflected the relatively stable condition of the economy, without significant recession of bursts of growth. Sweden has a considerably large labor force. In 2007 alone, there was estimated labor forces amounted to 4. 839 million, representing over 50% of the country’s population. Most of them worked in the service sector (74%) followed by the industry sector (24%), and agriculture (2%). The level of unemployment is nevertheless, quite high, accounting for 6. 1% in 2007 (CIA, 2008). In 2007, Sweden government has account balance is $37.
97 billion. Its external debt is $598. 2 billion. Exports of the nation amounted to $170. 1 billion annually, which mostly come from machinery (about35%), followed by leading industry and products like motor vehicles, paper products, pulp and wood, iron and steel products, chemicals in which the major export partners are Germany (10. 4%), Norway (9. 4%), and the US (7. 6%) (CIA, 2008). 4. Market Entry Strategy 4. 1. Targeting The exporting of Dates into a country that is not used to consume it will be a tough challenge for Emirates Dates.
In addition, the population of Arab people in Sweden also shows growing number, especially from immigrant. However, it does not vast enough to consume Dates in large volume up to tens of tons per annum if the Emirates Dates is to export at the large volume. In addition, the population of Moslem people reaches over 300,000 as of 2005 (BBC, 2010). Consider that each Moslem consumer at least one-tenth of Dates fruit each year, therefore, the market for Dates in the Sweden from the Moslem population would reach 30,000 kg or 30 tons.
The reason to target Moslem is because Dates is the recommended fruit that should be eaten as the prophet says so. This although large enough still contribute low portion considering that production capacity of Emirates Dates may reach 700 tons. ?? ?????????? ???????? ????????? ????? ?????? ??????????? ???? ????????? ?????? ????????? ????? ????? ??????. (Whoever has eaten seven date fruits of the high land in the morning, that day no poison or sorcery shall hurt him. ) (Emirates Dates, 2010)
Therefore, in targeting the Sweden as target country for exporting Dates fruit, Emirates Dates should target another segment in the Sweden market especially those who concerns about the importance of fresh fruit for health. This marketing strategy could help the company to reach wider audiences but still consider the Moslem population as the basis for promoting the benefits of Dates fruits by word of mouth. One important target markets are those who concerns for particular diet as Dates can cure many diseases.
4. 2. Market Entry Strategy Basically, there are many ways of entering new market in foreign markets. It may include one of following: • Direct Exporting This means exporting directly to end customers. Generally this is the common method that a company performs in order to sales their products to foreign markets. It contains lowers risks but also lower chances of big profits. In addition, this method does not provide Emirates Dates with opportunity to develop awareness regarding the benefits of Dates for health.
Therefore, the total demand will be subject to the importers capability in selling Dates to target markets. • Indirect Exporting This includes hiring a foreign agent (distributors from our own country that has a distribution network abroad), a domestic agent (distributors from the targeted country that are willing to sell our products), or engaging with an importer or reseller (local firms or business person that purchases our products and sell it into the local market). This represents a larger chance of profit because it allows larger quantities of exports.
This is better way of selling products into foreign market as selling Dates should be targeted to specific areas where the market exists. By hiring an agent, therefore, the volume of transactions could be increased significantly. • Sales Subsidiaries This could mean establishing a sales office in the target market or forming a joint venture with local companies or companies that have local presence in the targeted market. Establishing a sales office generally generate the possibility of a smaller lost compare to joint ventures.
However, joint ventures create a greater chance of producing a considerable amount of profit even though there is limited ability to control operations of the venture. This method also provides greater opportunity for enhancing sales volume in Sweden as the company can manage the operation themselves. This means that the company may immediately expand the market by adding several outlets in order to raise the sales volume and to be closer with target market. • Manufacturing Facilities This means that the company is ready for the final step of establishing itself in s foreign market.
Establishing one-self as a manufacturer in a foreign market means facing all the challenges and uncertainties of a new market going and furthermore, going head to head with other exporters. 4. 3. Risks and Considerations of International Acquisitions In the case of Emirates Dates, the company may quickly jump from establishing the sales subsidiaries to the final step of internationalization, which is establishing a manufacturing facility in the targeted market. There are actually several considerations that must be taken before making such an evolution.
The company should only follow its acquisitions strategy as the chosen form of market entry if the considerations generate positive recommendations. 5. Conclusion. Dates are fruit for health as they give lots of benefits. Emirates Dates as the major producer of dates in the UAE has excess production that need to be sold beyond UAE as the consumption in local market far below the production capacity. In this paper, we will consider Sweden as target market. From demography point of view, Sweden has potential market as Moslem population accounts for 300,000 people as of 2005.
However, as Emirates Dates entering the new market, this paper display several alternatives that they may take in order to succeed in Sweden. Reference: Agarwal, S and Ramaswami, S. N. 1992. ‘Choice of Forign Market Entry Mode: Impact of Ownership, Location and Internationalization Factors’. Journal of International Business Studies, 23 pp 1-28. ADMC. (2001). Bar Chart: Date Production. Retrieved May 2, 2010 from http://www. admc. hct. ac. ae/hd1/english/graphs/bar_dates. htm Adnani, Seema. (2010). Health Benefits of Dates.
Retrieved May 2, 2010 from http://www. organicfacts. net/health-benefits/fruit/health-benefits-of-dates. html Barney, J B. 1991. ‘Firms Resources and Sustained Competitive Advantage’. Journal of management 17, pp 99-120 BBC. (2005). Muslims in Europe: Country guide. Retrieved May 2, 2010 from http://news. bbc. co. uk/2/hi/europe/4385768. stm Emirates Dates. (2010). Facts and Benefits. Retrieved May 2, 2010 from http://www. emiratesdates. com/facts. html —. Profile. Retrieved May 2, 2010 from http://www. emiratesdates. com/profile.
html Fresh Plaza. (2007). UAE’s date with Dates. Retrieved May 2, 2010 from http://www. freshplaza. com/news_detail. asp? id=8217 Haller, Harold S. (1993). Managing with profound knowledge: A management process based on the Deming management theory. Harold S. Haller & Company Johanson, J. Wiedesheim-Paul, F. (1975). The Internationalization of the Firm: Four Swedish Case Studies. Journal of Management Studies: 305-322. Plumbot. (2008). Economy of Sweden. Retrieved May 2, 2010 from http://plumbot. com/Economy_of_Sweden. html