Barrett Farm Foods

Question 2a) Why did Barrett choose exporting as its entry strategy for Europe, as opposed to foreign direct investment or licensing?

In my opinion Barrett choose exporting as its entry strategy for Europe because Businesses that establishes its products in the international marketplace can increase sales and profitability, improve domestic reputation, reduce dependence on domestic markets, strengthen the sales potential of existing products, stabilize seasonal market fluctuations, sell excess production capacity, and increase awareness of possible foreign competitors.

Question 2b)What advantages does exporting provide to Barrett?

By exporting to Europe Barrett will expand profit and it is relative low cost to get involved as an international business. Since the products agricultural like nuts they are not delicate to transport and can last a lot. European Market simplified pricing strategy. I really think even Barrett had a lot to overcome it was a good idea to enter Europe exporting instead of direct investing or licensing. Plus exporting requires lower level of investment. The return on some exports may not be remarkable but neither the risk.

Question 2c)What are the potential draw backs of exporting for Barrett?

Some potential drawbacks of exporting could be to keep pricing competitive since prices can affect sales and also profits. Transportation fees, buyers demand, exchange rates, tariffs and of course competitive prices, regulatory compliance and the cost of marketing and physical distribution. Even though there are risk I really think Barrett did the right decision.