As previously mentioned we are going to launch a joint venture with a French company having image of producer of healthy snacks, which would provide both of us an effect of synergy. Besides, that would be easier for us to launch a product with them than do everything from scratch.
Company “Sibirsky Bereg” is the leader on the Russian market of dried crusts. Apart from dried crusts company produces a lot of other salty snacks like crisps, sunflower sides, nuts, dried seafood, etc. It owns a wide variety of brands among which are “Kirieshki”, “”Chipsons”, “BEErka”. The company owns production facilities in Russia, Ukraine, China, Kazakhstan and Australia. The world-wide expansion is caused by the fact that the Russian market of snacks is slowing down, and the level of competition is getting more severe. So looking for the markets to work on “Sibirsky Bereg” is looking for perspective and high-margin markets. For instance it chose Australia because on this market there is a much higher level of consumption of snacks per person (6 kg versus 1.5 kg in Russia). Besides, the snacks are sold over there with quite high margin. So “Sibirsky Bereg” even decided to build the plant in Australia to work on that market.
As for other opportunities, “Sibirsky Bereg” could also enter the market of Scandinavian or Eastern Europe countries, where people have strong bread-eating habits, but dried crusts are not sold in these countries. Nevertheless the company would also face the necessity to promote the whole product category instead of one single brand. But in our opinion peculiarities of French market such as high pace of life, level of development of French market would help to promote our product. Another opportunity for the company would be to promote the other product on the French market. For instance “Sibirsky Bereg” could start producing packaged nuts. That would mean the company will have to compete with numerous producers of nuts in the French market. It may seen that this would be easier as the company would not need to invest a lot to promote its product, but on the other side nuts are the product that is difficult to differentiate, so it would be difficult for “Sibirsky Bereg” to keep on the market.
SWOT-analysis
We would like to provide the SWOT-analysis of the company to demonstrate its main features.
Strengths |
Weaknesses |
Leadership on the Russian market (S1) |
High financial leverage (W1) |
Up-to-date production facilities (S2) |
Company and brands unknown on the target market (W2) |
Experience of entering foreign markets (CIS, Australia) (S3) |
Weak market understanding (W3) |
Diversified production facilities (S4) |
Product new to the market (W4) |
Stock company (higher credibility) (S5) |
Easy-to-copy product (W5) |
Usage of dietetic bread (S6) |
|
Comfortable to eat (S7) |
First of all, as we have already mentioned the company is the leader on the Russian market which means that its positions on the domestic market are quite sustainable to provide coverage for it to enter foreign markets. Besides the facilities that the company owns are up-to-date which allows it to sell high-quality products. What is more the experience that the company has, regarding the entrance into the foreign markets, will be useful when it deals with French market. It is important to notice that the experience is quite diverse meaning that “Sibirsky Bereg” entered not only CIS, but also remote markets such as Australia. Another strong point concerns the diversified production facilities so the company operates on the different markets and enjoys the advantages of risk diversification. Moreover “Sibirsky Bereg” is a stock company which provides credibility to it among business partners in different countries and allows facilitating negotiation process. Furthermore, the company uses, among others, dietetic bread and is quite experienced in its production, so it would not be difficult to it to adapt its dried crusts to the French market. The final strong point that we have figured out also refers to the product itself, i.e. its convenience to eat.
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