Company Analysis

Agricultural Cooperatives Union is a company with many years of experience and presence in the production and export of local products such as olive oil, citrus fruits, and a special variety of currants named Vostizza currants (P.D.O). The cooperative Union was founded in 1935 and the active members (which are also the growers) of the company are estimated to be 6000. According to Organization of inspection and certification of organic products (2011) the company is certified for its organic products. The estimated organic production of the Vostizza currants for the year 2009-2010 was about 600.000 kg . Yet, the company has been certified with ISO9001:2000, HACCP and BRC. The laboratory of the company which is used for testing and controlling the quality of the products has been certified with ELOT-EN-ISO/IEC 17025:2005. The company has new and modern installations that are situated in Aeghio/Peloponese, 3 kilometers from the national highway and 166 kilometers from the port of Piraeus. The premises have been built according to the highest and strictest technological standards which guaranty the supplied quality and safety of the products that the company handles.
Product Analysis

Greek black dried grapes of the Black Corinth variety, also known as currants, are one of the products with the largest demand in world markets today. Raisins are distinguished between currants and sultana raisins which are widely produced in countries like USA, Turkey, Iran and Chile. Greece is responsible for the 80% of the total world production of currants. The remaining 20% of the total production is held by Australia, South Africa and USA/California. The Vostizza variety of currants are produced in Peloponnese and in the greater area of Aeghion and they have a high nutrition value, including protein, calcium, iron, potassium and sodium which makes them a natural and a healthy alternative (USDA Nutrient Database, 2011). In 1998, the Vostizza currants have obtained the P.D.O license, which stands for Protected Designation of Origin, by the European Union meaning that only in that specific area this variety of currants is allowed to be cultivated.

The Rationale for the Chosen Countries

Some of the main reasons that Agricultural Cooperatives Union should consider to expand into international markets is the continuously increasing demand of raisins and the varieties of them in more than 60 countries and that the per person consumption for raisin is increasing in those countries every year (Economic Research Service, 2009). More specifically, the domestic consumption of raisins in Australia for the year 2009 was 33.500 tones, for the year 2010 was 38.000 tones and for the year 2011 it is estimated to be 39.000 tones. In China, the domestic consumption of raisins for the year 2009 was 150.300 tones, for the year 2010 we notice that there was a slight decrease to 126.200 tones but for the year 2011 the consumption increased again in 139.000 tones. In India, the consumption for the year 2009 was 9.300 tones, for the year 2010 was 9.500 and for the year 2011 we observe an increase of the consumption, reaching the 12.000 tones. Moreover, those mentioned countries have low or no production of raisins. For example, China in 2009 had a production of 160.000 tones from which 50.000 tones were used for exporting, having as a result not to be capable of satisfying the domestic demand of the 126.200 tones. Australia in 2009 had a production of 13.600 tones from which 2.800 tones were used for exporting, thus the remaining 10.800 of its production plus the imports which were 22.700 tones were used to cover the domestic demand. India in the other hand, has no raisin production. (USDA, 2011). According to ERS (2010) the estimated per person consumption for raisin is 0,58 kilograms (1,3 pounds) which is significantly low compared to the 1980's (2,1 pounds – 0,95 kilograms).
Following these outcomes and the continuously increasing demand for raisin, especially from the BRIC countries, it is decided that the company should pursue to export the Vostizza currant in China, India and Australia.

Country Analysis
China
China is a huge country with a total population of 1,336,718,015 and with an area of 9,596,961 square kilometers (CIA World Fact Book, 2011). The biggest and busiest port of the country which is also the busiest port in the world is the port of Shanghai, handling over 29,05 million TEU's (Straits Times, 2011). The country has also a big network of railways, approximately 86,000 km and the second largest network of roadways, approximately 3,860,800 km of which 65,000 km are expressways.
As it has been mentioned above, China's raisin production for the year 2011 was about 175,000 tones of which 139,000 tones were used for domestic consumption (Figure 1).
Figure 1

According to the World Bank (2011) the costs of importing a container in China is relatively low compared to the global average and it is approximately 545 USD (Figure 2).The costs displayed here are referred to standardized operations such as that the imported goods do not require special treatment and environmental safety standards higher than the internationally accepted and that those goods are transported in a dry-cargo 6,09 meters container fully loaded. The procedures to import are as follows: 1. Documents preparation 2. Customs clearance and technical control 3. Ports and terminal handling 4. Inland transportation and handling
The costs are amount to 260 USD for collecting and preparing the required documents (15 days duration), 70 USD for customs clearance (4 days duration), 80 USD for terminal handling (3 days duration) and 135 USD for inland handling and transportation (2 days duration). Furthermore, the required documents for importing are: 1. Bill of lading 2. Certificate Of Origin 3. Commercial Invoice 4. Customs import Declaration 5. Packing List

Figure 2

By doing a S.W.O.T analysis for the Agricultural Cooperative Union of Aeghio, we have found out the following:
Strenghts
The company has an organic currant production of 600.000 kg which is available for exporting, thus it is able of satisfying 0,4% of the domestic demand. Furthermore, the company it is certified with a numerous of protocols (ISO, HACCP and Organic certifications) which ensure the high quality of the supplied product. According to Economic Research Service (2009) the average price per ton of raisins in 2009 was set to 1,323 USD. That means that the average kilogram price was 1,32 USD (approx. 0,95 EUR). The Agricultural Cooperative Union of Aeghio though, has decided to sell at a price of 1,120 USD per ton (approx. 800 EUR) for the first months of its operations in China in order to compete with the local produced.
Weaknesses
The weaknesses of the company when entering the market of China is that there is already a local production of raisin which is measured to be 175,000 tons compared to the capabilities of PES Union which in 2009 were approximately 600,000 kg. Because of the local high supply of raisins, the price per ton is measured to be 1,35 USD per lbs (Figure 3)
Figure 3

Some other weaknesses of the company when entering Chinese market is that the population lacks of knowing and thus understanding the importance of food safety and quality as well as the poor infrastructure and distribution networks in the rural and the western part of the country.
Opportunities
Although that the company is facing

Australia The third country that Agricultural Cooperatives Union, and especially the product Vostizza will try to expand in, is Australia a country with a population around 22,000,000 and a GNI per capita (US$) 43,740 (World Bank). Australia has a strong, flexible economy with constant high growth, reasonably low inflation, and sensible low interest rates. It has an well-organized government sector and a flexible labor market and offers a friendly environment for small business. According to the United States Department of Agriculture (USDA) and the Foreign Agricultural Service, Australia in the year 2011/2012 in September had a listed consumption of 39,000 metric tones of raisins while in the same time Australia’s imports where about at 25,000 metric tones. As we can see Australia’s imports are much more that the exports. The country’s consumption according still to the USDA was at 39,000 mt in September of 2011. Comparing the facts and the numbers that state us the raisin production, consumption Australia seems to be a suitable and a promising choice in order for a successful expansion in the globalised market. Having in mind that in Australia the 1,3% speaks Greek and the Greek immigrants reaching 275,000 (CIA fact book) gives one more incentive that may boost the sales of the prospective entry in the Australian market, as raisin is highly connected to Greek food and culture. In order to make sure that Australia is a suitable choice we will follow the same technique as above, SWOT analysis, a common key that will help us in order to focus in key issues. Strengths According to the World Bank and the Doing Business guide, Australia is ranked in the fifth place as it concerns the ease of doing business. One more, significant strength, of Australia is the procedure of starting the business, as it has the 2nd best position in the specific table and the friendly taxation that businesses and especially small ones are taxed. In addition getting electricity is not so time consuming procedure, having in mind that in Canada someone needs twice the time in order to acquire electricity.

How Australia and comparator economies rank on the ease of starting a business [pic] Weakensees Having in mind the distance between the already existing distributors in Greece and the long distance between Australia and Greece we should have in mind the cost of this future transaction which is between 1200-1400$, that is a weakness for entering this specific market. The fact that Australia, geographically speaking, is desolate comparative to other Western countries, placed half a globe away from the large developed markets in Europe and the US. International trade is time consuming, expensive as service businesses which function in Western markets also have to face the time zone differences as day and night are more or less opposite in e.g. Europe and Australia, is maybe the greatest weakness that companies face when they try to expand in this market. It is said that Kinship in Australia plays a significant role upon the decisions that people make on the other hand though this market’s weakness could be used as a strength for the Vostizza raisin as Greek people have a big percentage in Australia. Opportunities Australia is a country that offers many opportunities as according to the World Bank is the fastest place in the world in which to start a business, with regulatory procedures taking just two days. It is a country that has fewer restrictions on product markets than other countries, something that is listed as one more important opportunity. Vastizza currants will have a competitive advantage as it concerns the price; because it will be sold around 0.8 to 0.9 cents per kilo as the same time the average price of raisins is around 1.2 Euros per kilo in Australia. Threats As it concerns the threats that maybe will be rise, are the other competitors as Chile Turkey and Chine that have a big share in the export market which is bigger that our existing share. Competitors with quality products have to be carefully faced and with more innovative way than what they already have.