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Assignment Taken

Develop International Market Expansion

Case Understanding

Ramalingam Foods, a Bombay-based company, was known for its genuine South Indian food and filtered coffees. During the emergency, they discovered another opportunity to broaden their company portfolio: they began selling real Dosa-idli batter and prepared chutneys, with reasonable profit margins. When Mr Venkatesh Ramalingam's son took control in the 1990s, he intended to develop the company. Because wet idli batters have a short shelf life and are perishable, he came up with a ready-to-use powdered Dosa idli batter, which was an instant hit because it solved the perishability problem. When the management saw that some people were purchasing the mixes and exporting them to other countries, they began to consider how they might take the brand to the next level. As a result, they enlisted our help in expanding into foreign emerging markets.

BCS Solution Summary

A effective foreign growth strategy is focus on rising countries in Southeast Asia, where there is a larger population of Indians. As a result of a study of the packaged food market in Southeast Asian nations, Thailand, Singapore, Malaysia, Indonesia were identified as possible locations for the company to develop for initial phase. For the initial phase of expansion, we want to do the production in India by setting up more factories here and exporting it to the other countires. Opening warehouses outside India and receiving the products from India, since we have 50 crores set aside for international expansion. Mavalli Tiffin Foods (MTR), an Indian rival and a subsidiary of Orkla ASA, is Ramalingam Foods' major competitor in these nations. Ramalingam Foods now offers a limited number of mixes and SKUs, including North Indian, South Indian, Chutney Powder, dessert mixes, and instant coffee mixes.

Solution

A effective foreign growth strategy is focus on rising countries in Southeast Asia, where there is a larger population of Indians. As a result of a study of the packaged food market in Southeast Asian nations, Thailand, Singapore, Malaysia, Indonesia were identified as possible locations for the company to develop for initial phase.  For the initial phase of expansion, we want to do the production in India by setting up more factories here and exporting it to the other countires. Opening warehouses outside India and receiving the products from India, since we have 50 crores set aside for international expansion.  Mavalli Tiffin Foods (MTR), an Indian rival and a subsidiary of Orkla ASA, is Ramalingam Foods' major competitor in these nations. Ramalingam Foods now offers a limited number of mixes and SKUs, including North Indian, South Indian, Chutney Powder, dessert mixes, and instant coffee mixes.

 

Reasoning for South East Asia

1. Trading : Free trade agreements have been made with the nations of Southeast Asia.
2. Supply Chain and Transportation Facilities: Supply chain and transportation costs are lower because the anticipated expansion is mostly based on a franchise model.
3. The presence of Indians in these countries is also a significant element.

Number of Indians in following countries.

Singapore: 5.1 lakh (9.1%)
Indonesia: 2.3 lakh (0.1%)
Thailand: 2.5 lakh (0.5%)
Malaysia: 20 lakhs (7%)

1. Expansion in Singapore

• Singapore is known across the world for its insatiable appetite for food. Singaporeans spend about $7.7 billion on food and beverage. As a result, if the corporation wishes to accelerate its revenue development, it must join the Singaporean markets.
• High Import: Singapore exports approximately 90% of the food that it consumes. As a result, packaged food imports have a great opportunity to dominate the Singaporean market. Increase in family monthly income: For a long period, household monthly income has been steadily increasing.
• Hectic schedules: People's busy schedules have driven them to rely on ready-to-eat meals. As a result, Singaporeans are increasingly accepting of ready-to-eat meals and processed foods that save them time.
• India Singapore Trading Relations: In terms of income, Singapore is India's second most favored ASEAN trade partner, accounting for 38 percent of the country's overall trade with the ASEAN counterparts.

 

1. Expansion in Indonesia

• Customers' convenience: With busy consumers and a growth in single-person    homes, processed food markets can take advantage of this trend.

 

• Openness to new flavours and variations: Indonesians are receptive to new flavours and variations. As a result, marketing a new food product won't be a major undertaking if the company can concentrate on health and hygiene concerns.

 

 

1. Expansion in Thailand

Consumption of ready-mixed foods has been increasing steadily in Thailand. This is happening because the lifestyle has become busier of consumers. Because of this it has high growth potential as the market is untapped.

 

 

1. Expansion in Malaysia

Beverages, canned seafood, dairy goods, noodles, and bread items are among the principal products produced by Malaysia's food processing sector. In the food sector, there are large trade deficits. Malaysia's government has been pushed to invest in the food sector. As a result, Ramalingam Foods has potential to penetrate the Malaysian market, as the home market is still developing. As a result, there is a lot of untapped potential for growth.

Conclusion

Ramalingam Foods first intended to enter South East Asia after weighing all advantages and disadvantages, and hence chose South East Asian countries: Singapore, Indonesia, Thailand, and Malaysia, all of which have a major Indian population. Furthermore, according to a detailed market research, these are the countries with local populations that are extremely responsive to food from other countries. Following that, the company may pursue aggressive expansion in the other two zones, namely the Middle East and the United Kingdom, with a more diverse product mix and SKUs in order to gain greater global market share in the long term.

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