International Marketing – Arla Food Company

Introduction

Arla Food Company has been famous for its food products especially dairy products to the different countries in Europe. The company is mainly famous for its dairy products. The company has a huge range of customers throughout the world. The company has processed probably 13 billion liters of milk each year. Arla has also targeted many countries such as Mexico, Venezuela and other Latin American countries for their global expansion.  The company is mainly based on Denmark and its successful venture in Denmark has made the company to expand its business to the Latin America countries. The countries with good economic growth can be the good market for the organization. Brazil has been a country that also has seen an economical growth in the last few years. Mainly from 2014 the country has seen 0.4% of growth in its economy (Schlemper, and Sachet, 2017). The company that provides dairy products to the country have also seen the growth in the sales and also the amount of the customers. The market dynamics of the Dairy industries of Brazil has many spots to penetrate so that a successful dairy business can be commenced by any organization. The following report is mainly based on the challenges and the opportunities that the company can face in penetrating the market of Brazil. Different aspects of the dairy market of the company have also been discussed in the following report.

International Marketing

Analysis

1.Attractiveness of the market in Brazil

 Brazil   has been a country that is developing day by day and year after year. Among all the Latin American countries Brazil has been   the country that has a decent economic growth in their yearly GDP rate. The market also contains many customers and most specifically the highest customer base in the Latin American countries.  Like the European market these markets also have some similarities. The industry and the market have seen some of growth in terms of their different aspects such as the demand of the dairy products and the amount of consumers.  The product or brand is also a company that has also seen development and growth in the global business context. The market can be attractive as the market is full of many opportunities. The success of Vigor has also been very much influential for other companies to penetrate the particular market.  The country also has been a continuous developing market like Middle East, Africa, China and Russia (Schwantes et al 2019). The south East Asia and the Latin American companies have a low competitive market so that the company with the good amount of assets and a good experience of the field can penetrate the Brazilian market with ease. The growing economy and also different international sports event in the country can also attracts many people outside the countries and the investors and also the chance of the global recognition of a particular brand or product. In this case the Arla Food Company can get attracted towards the market and the company. The dairy products are also very much influential in terms of the necessity of the people of Brazil. Most of the people considers it a very essential part of their everyday life. Latin American companies like Brazil, Mexico and so on are very much good for  the dairy business as many companies like SIGMA Alimentos  and Grupo Industrial LALA milk have also provides dairy products like cheese and other  products to the customers and the company has seen abrupt development in the business the dairy products has been appreciated by the  consumers of the  Brazil and also the products have been their common  household name. The opportunity of joint business venture and merger has also presented in the market and this can also grow the market as well as the organization itself. The Arla Food Company has merged with the VIgor dairy company that also helps to sustain in the market and knowing the cultural perspective of the customers rather than consumers and the dairy products can add an authentic value in it.

2.Opportunities in Brazilian market

One of the most important and most useful opportunities of the Brazilian market holds is the kind of population in it.  According to the reports the Brazil contains the population of 200,361,925. The population of the country ensures a high amount of sales. This sales can also ensures the high profitability of any country. The country is also has a huge GDP rate that has enriching the industries of the country (Witter et al 2017). The GDP per capita of the country is approximately 8.8920.76  Us dollars that has been phenomena  for a country like brazil Many companies are also want to set up their business in the Brazilian market for their growth and expansion as it ensures high proficiency and a fixed and sustainable profits.   The merger or the joint Venture with Vigor has also helped the organization to know about the different demands of the customers. The success of   the company also creates various opportunities for the company itself, Arla Food Company is fortifying its quality in the Brazil by entering a mutual business relationship with its long time accomplice and Brazil’s largest dairy organization, Vigor Alimentos .Since 1986, the company has been in a joint aggregation with Vigor for 50% percent profits which are processed under name of a Dan Vigor (Lima et al 2018).  Many companies from all around the world has also penetrating a market even the French companies also used aggressive strategies to  penetrate the market and  occupied two units. This inclusion of big companies in the industries has also developed the demands of the customers as well as the dynamics of the market. This has also helped the organization to thrive on the development of the dairy industry of Brazil. The development of the market leads to the different strategies of the organization that can give the advancement of te organizational; structure (Beber et al 2019). This structure can be very much important in terms of the annual income of the organization and the different other aspects. The brand recognition and the brand equity of the organization is so high as the company has been successful in the different countries of Europe sop that this can also put an impact on the minds of the customers and customers can be attracted towards the particular daily products. The market of Brazil creates many more other opportunities to the Food Company so that Food Company can have a potential development. The launch of Lurpak and the advertisement around the product has also attracted many people in Brazil or rather than the customers of Brazil. The response against the work is quite fascinating for the organizational context. The country is also known for his cow farming aspect as 20 million cows are used for the dairy industry. Approximately 36 billion litres of milk has been produced by those cows that helps the company to get good amount of supplies for their products that also helps the organization to grow their business operations.

3.Challenges

Penetrating a Dairy market of Brazil is quite challenging. There are many challenges that has to be faced by Arla Food company.  The company has the first challenge to face is the political turmoil in the country that affect the production and sales of the dairy products of the company. The social issues regarding the dairy products can also be a problem for the company as it affects the productions and the sales of the product (Santos et al.2017). The falling growth rates of Brazil can be a thing of concern as it can create many problems for the dairy industry and the company itself. The culture and the social values are different in Brazil. This can also create adverse effects on the operations of the company. Leading Companies in The Company SIGMA Alimentos for cheese products, A subsidiary of French firm Danone for dairy and milk products Grupo Industrial LALA milk are the other competitors of the organization in the market. This increasing competition can affect the sales of the organization (Oxaran et al 2017). The company has to set up its cow farms in the country are very much expensive for the organization to set up.

Conclusion

 In the concluding part it can be said that the Arla Food Company has all the potentiality to grow and develop in the Brazilian market. The market risks are also present but it can be avoided. The Company has to overcome with all the risks and the technological advancement should be present bin the organisational structure to perform good business operations so that sustainable development can be protected.

References

Beber, C.L., Carpio, A.F.R., Almadani, M.I. and Theuvsen, L., 2019. Dairy supply chain in Southern Brazil: barriers to competitiveness. International Food and Agribusiness Management Review22(5), pp.651-673.

de Lima, L.P., de Deus Ribeiro, G.B. and Perez, R., 2018. The energy mix and energy efficiency analysis for Brazilian dairy industry. Journal of Cleaner Production181, pp.209-216.

Oxaran, V., Lee, S.H.I., Chaul, L.T., Corassin, C.H., Barancelli, G.V., Alves, V.F., de Oliveira, C.A.F., Gram, L. and De Martinis, E.C.P., 2017. Listeria monocytogenes incidence changes and diversity in some Brazilian dairy industries and retail products. Food microbiology68, pp.16-23.

Santos, H.C.M., Maranduba, H.L., de Almeida Neto, J.A. and Rodrigues, L.B., 2017. Life cycle assessment of cheese production process in a small-sized dairy industry in Brazil. Environmental Science and Pollution Research24(4), pp.3470-3482.

Schlemper, V. and Sachet, A.P., 2017. Antibiotic residues in pasteurized and unpasteurized milk marketed in southwest of Paraná, Brazil. Ciência Rural47(12).

Schwantes, D., Gonçalves Jr, A.C., Schiller, A.D.P., Manfrin, J., Campagnolo, M.A. and Veiga, T.G., 2019. Salvinia auriculata in post-treatment of dairy industry wastewater. International journal of phytoremediation21(13), pp.1368-1374.

Witter, R., Melo, A.L.T., Pacheco, T.D.A., Meneguzzi, M., Boas, R.V., Dutra, V., Nakazato, L., Chitarra, C.S., Oliveira, A.C.S.D. and Pacheco, R.C., 2017. Prevalence of’Candidatus Mycoplasma haemobos’ detected by PCR, in dairy cattle from Ji-Paraná in the north region of Brazil. Ciência Rural47(3).

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