L B Spices Trading Case Study

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Company Background L B Spices Trading (Private) Limited founded in 1930 as a cinnamon buying and selling shop, now produces excellent quality spices mainly cinnamon, garcinia, nutmeg, coffee, ginger, aricanut, cloves and pepper from Sri Lanka. LBS also produce essential oils such as cinnamon bark oil, and leaf oil through distillation process. LBS’s current market includes South America, Europe, Japan, USA, Singapore and Malaysia. Opportunity for ‘Going International’ LBS’s Mission and Vision itself is to export quality spices from Sri Lanka to other countries to increase economic situation of the producers by earning and to earn foreign exchange for the country. Moreover, LBS’s revenue is only from the export activities to the above said countries,…show more content…
LBS recently has approached us to advise them about their plans to enter n UAE market especially Dubai. Research & Sources of Evidence Market research and sourcing information is done by us and the findings from survey with the importers of UAE and telephonic interview with the selected retailers from Dubai concluded that there is a gap in the market to enter the market. Assumptions/Limitations LBS is producing all the spices in their own farm land without using artificial pesticides. This is giving LBS an edge over the rivals. They don’t have any intention to produce in the market they target to sell the spices. 2.0 INTERNATIONAL MARKETING • Critically appraise the considerations that have to be made when selecting either one of the above market entry method which you have suggested. Introduce the concept of International…show more content…
LBS clearly knows what is cross boarder business is and it pros and cons as they are a seasoned business in spices export industry. However, when LBS enter in UAE market they should clearly understand the rules and regulations of the country, transportation mode, if there is any import duty in the target market, characteristics of the market, total turnover of the market, at what profit ratio the industry operates, how often the stock turnover happens and the duration of trade credit from the industry. Introduce the Key Considerations for Market Entrance (Risk, Motivation & Control) UAE imported $112m spices in 2014 [2] which has potential to grow 3% annually as the import growth rate of UAE. Currently UAE imports 57% of the spices from China, 23% from India and rest is from many other countries including Sri Lanka. LBS should target to grab its targeted market share from the India’s existing market share as Indian spices are expensive than Sri Lankan spices also LBS should use the natural pesticide use to gain USP in UAE market. LBS should understand the fact that currently UAE is importing only 0.06% from Sri Lanka which is valued just $67,000. Introduce the Market Entry Methods (Direct &

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