DBA 8010 Module 8 Final Project: Two Export Plans, Natural Colors to Germany and Color Lab Services to Mexico Example

A Product to Germany and a Service to Mexico: Two Export Plans for a Natural Color Maker

Student Name

Doctor of Business Administration, Thomas Edison State University

DBA-8010: The Global Business Context: Trends, Issues, and Markets

Mentor Name

Month Day, Year

A Product to Germany and a Service to Mexico: Two Export Plans for a Natural Color Maker

Why Two Plans

Our product, natural colors, travels as physical goods subject to food additive rules, duties and freight. Our service, application laboratory work that matches and stabilizes colors in a customer's own product, travels as expertise. De Kluyver (2012) notes that global strategy must fit the nature of what is being sold; goods and services face different barriers and call for different entry approaches.

Plan 1: Natural Food Colors to Germany

Market

Germany is Europe's largest food and beverage market, and German manufacturers have moved quickly to replace synthetic colors. Our target is mid-sized confectionery and dairy producers that buy colors through distributors and value technical support. Industry contacts estimate that natural colors used by these producers total several hundred million euros a year, served mainly by a few large European ingredient firms.

Entry and Logistics

We will supply Germany from the Dutch toll processor established in Module 2, delivering within a week by truck. Sales will be direct to mid-sized producers, supported by the technical sales manager hired in Module 6.

Marketing and Pricing

Following Module 4, formulas and quality stay standard while shades, documents and certifications are adapted. Prices will be set in euros at about 5 percent below the large competitors for comparable colors, justified by faster technical response.

Regulation

Colors must meet the European Union's rules on food additives and on coloring foodstuffs, which distinguish additives from foods used for their color, a distinction that affects labeling. Our regulatory consultant will confirm the status of each color before launch. Organic certification, which some confectioners require, will be added for the beet and carrot colors through the toll processor's certified line.

Finance and Risk

Euro sales will be hedged under the policy in Module 3. Year one target sales are 1.8 million euros, with a margin of 22 percent after toll fees. Working capital for inventory at the processor will be about 400,000 euros, funded from our existing credit line. The main risks are price competition from large rivals and slow qualification by customers; trials with ten producers in the first six months will test demand.

Plan 2: Color Application Lab Services to Mexico

Market

Mexico has a large and growing beverage industry, and several producers are reformulating to meet front-of-package labeling rules and consumer interest in natural ingredients. Many mid-sized producers lack application laboratories. The service: we develop and test natural color systems in their beverages, for a project fee, and supply the colors if they adopt them.

Entry

Services can be exported with little capital. We will deliver most work from our Vineland lab, with samples shipped both ways, and send an application scientist to customers' plants for trials. A Mexican technical consultant on retainer will handle local visits and introductions.

Marketing and Pricing

We will market through a beverage industry trade show in Mexico City and webinars in Spanish. Pricing: a fixed project fee of $12,000 to $25,000 depending on complexity, credited against color purchases in the first year, which turns the service into a path to product sales.

Regulation and Contracts

Mexican rules on food additives and labeling apply to the customer's product; our contract will state that the customer is responsible for final regulatory approval, while we provide documentation. Payment will be in dollars, half on signing.

Finance and Risk

Year one target is twelve projects, about $200,000 in fees and an expected $600,000 in follow-on color sales. The main risks are payment delays and intellectual property; contracts will specify that color formulas remain ours.

Culture and Leadership in Each Market

Module 8 asks how leadership and motivation differ across cultures. House et al. (2004) studied leadership in 62 societies and found a core of leader qualities, integrity and vision among them, admired in nearly every society, alongside others, such as participative style and status consciousness, that varied by culture. German customers and our German-speaking staff will expect detailed technical evidence, punctuality and direct communication. Mexican customers will value personal relationships and respect for hierarchy, so our consultant's relationships and visits by senior managers will matter. Our Dutch-based technical sales manager will be motivated by autonomy and clear goals; our Mexican consultant by recognition and a long-term relationship.

How the Plans Fit Our Capabilities

Both plans draw on what we already do well. Our application lab has twelve years of experience stabilizing natural colors in acidic beverages and heat-treated dairy, the problems German and Mexican producers face. Our weakness is reach: we have few people outside New Jersey. The plans therefore lean on partners where reach matters, the toll processor and the Mexican consultant, and keep in house the expertise customers cannot easily find elsewhere. Theodosiou and Leonidou (2003), reviewing studies of standardization and adaptation, found that the right balance depends on how well the strategy fits each market's conditions, which is why the two plans differ.

Timeline and Measures

Both plans start in the first quarter. In Germany, the first six months bring qualification trials with ten producers and the first commercial orders; by month twelve the plan targets twenty active customers. In Mexico, the trade show in month three should produce the first projects, with twelve completed by month twelve. A review at month nine will decide whether to add a second application scientist for Mexico or a second toll processor for Europe. Each plan will be judged on revenue against target, gross margin, customer count and, for Mexico, the share of lab projects that convert to color sales; a conversion rate below 40 percent would mean the service is not opening doors as intended.

Comparing the Plans

Conclusion

Exporting a product and a service call for different approaches. Colors to Germany depend on regulation, logistics and price competitiveness; lab services to Mexico depend on trust, expertise and contracts. Together they build the firm's international presence in two regions, with the service opening doors for the product.

References

De Kluyver, C. A. (2012). Fundamentals of global strategy. Saylor Academy.

House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (Eds.). (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Sage.

Theodosiou, M., & Leonidou, L. C. (2003). Standardization versus adaptation of international marketing strategy: An integrative assessment of the empirical research. International Business Review, 12(2), 141-171. https://doi.org/10.1016/S0969-5931(02)00094-X