COMPANY SCENARIO

Read the following scenario and then answer the problem based on it.

Your company, Grainstores South Africa (Pty) Ltd, manufactures grain silos and has, for a number of years, supplied both individual farmers as well as co-operatives in the local market. The silos are made of galvanised steel and have a storage capacity ranging from 20 tons to 500 tons. Your company normally supplies the silos as a full ‘package’, that is, you supply all the ancillary equipment, such as valves, pumps, and hoppers, which you obtain from other sources.

Your company is well established locally and is well known for its efficient back-up service. On the basis of this success, you believe that there should be export potential for Grainstores South Africa, especially in SADC countries.

Bearing in mind that grain silos represent infrastructural development–they are not simple consumable items that are bought every month or quarter–there are several market entry possibilities that you could consider. In some cases, market entry might be determined to a great extent by the source of financing for such development, especially in countries unable to finance agricultural infrastructure unaided. Finance might be available from one of the World Bank institutions, for ex.

Your assignment is to:

1. Discuss the various market entry options open to you, referring specifically to grain storage silos and the type of foreign market partners or associates you might deal with.

You need to take into account the characteristics of the region you are looking at and the fact that your company would like to develop long-term business. You should then recommend what seems to be the preferred option.

2. For each option, give the main areas of market research that would be needed. In doing this, there is no need to repeat research into basic country information each time, such as the type of agriculture and whether silos would be needed. Rather concentrate on the type of information that is essential for the relevant market entry option.

3. You should then outline what criteria you would use to prioritise possible SADC markets.
Note that you are not required to carry out the research. Your assignment should be set out as a business document with headings and sub-headings.