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Abstract
born Vitalia Nikola Ltd. The report begins with an initial review of the existing literature on
the topic of international, as well as evidence of its practice within the food industry.
Subsequent to this is a complete environmental analysis, considering both macro and micro
factors, and the behaviour of the company’s immediate competitors. Contributions from the
literature review, environmental analysis, along with any relevant theories and models will
be used to analyse the company’s international strategy, which will form the basis of all
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Introduction
VITALIA Nikola Ltd (VN) is the brainchild of the father of current manager and co-owner
Skopje, VN now operates with 100 full time employees working departments ranging from
R&D to production. The company prides itself of its competitive advantages which include;
excellent quality for reasonable prices, as well as a rich palette of natural and tasty healthy
innovation, and BRC & HACCP certification. With 18 years’ experience in the health
As all offices and production is still based in Macedonia, VN’s exports its products which
available throughout the Balkan region, and most parts of the EU, USA, Canada, Australia
and the Middle East. Particular key markets include Serbia, Cyprus, Portugal, Montenegro
and Romania, and VN’s key clients include the likes of Carrefour, Metro, Billa, Kaufland,
Literature review
amount of published literature. All the literature is within the fields of international business
Strategy is the means of meeting of organization’s objective to reconfigure of its value chain
competitively position itself against competitors. A value chain of activities is the manner in
which an organization delivers value, transferred through its product or service offering to
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Traditional models are significant contributions to the theory of internationalisation that are
characterised by incremental processes and sequential (Vernon 1966, Johanson and Vahlne
1977). Commonalities unified the traditional models, regarding the scope, sequential order,
psychic distance, investment. The restriction of the flow of information between potential or
actual suppliers and consumers, especially for the country based diversities are psychic
distance. Language differences, cultural issues, political, legal and economic situation are the
key factors (Johanson and Wiedersheim-Paul 1975, Johanson and Vahlne 1977). Initially an
to a small number of countries with low psychic distance to their home country, has been
suggested by traditional models. The investments within the country have been gradually
increased by the SME. This action may relinquish a part of its autonomy as it begins to adopt
Due to the establishment of subsidiaries, the investments were made with the foreign
Finally, a decision is made to set up a base in the country with the confident in its ability
within the foreign market, similar to that of its domestic market, for the foreign market,
Over time the SME repeats the same processes in a higher scope of foreign markets covering
those with more psychic distance. Two important traditional models are: the 5-stage
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(Johanson and Wiedersheim-Paul 1975, Johanson and Vahlne 1977 and 2009)
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Source: provenmodels.com 2013
grounds activity of Born Globals (BG) or International New Ventures (INV) has been failed
to be considered (Rennie 1993, Knight and Cavusgil 1996, Oviatt and McDougall 1994 and
These concepts describe organizations which seek international activity from their inception,
The introduction of Born-Again Global concept (BAG) (Bell et al. 2001 and Bell et al. 2003) is
internationalisation even though they are well established within their own domestic
markets, due to internal or external incidents. Internal incidents encompass factors such
balance between global integration and local responsiveness. The related literatures are
(1969) and Integration-Responsiveness framework (I-R) that is set up by Prahalad and Doz’s
Figure 3: I-R Framework adapted from both Bartlett and Ghoshal (1989), Prahalad and
Doz (1987). Source: Swoboda et al. 2012
Vernon (1966) created a model called International Product Life Cycle. Figure 4
demonstrates that in the early stage of product's life-cycle production and human resource
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stem from the original invented place. With the increasing demands of consumers from
international markets, production gradually moves away from the original place. When
products become mature, the number of competitors will increase. Ultimately, the innovator
becomes challenged in their domestic market, Production are done either by competitors in
developing countries or in the innovator’s subsidiary countries which have lower costs.
The health food industry is a global industry currently experiencing rapid expansion, and
expected to reach the $1 trilion mark for the first time in 2017, according to Euromonitor
While health food were originally considered to be premium goods, these products are
going mainstream, entering the mass market, present in many fast growing economies
including the US, UK, Germany, China, Canada, France and Italy. Growth has been spurred
by an increasing knowledge about foodstuffs, better tasting foods, and recession driven
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Concerning strategic clusters, in 2007 the Food Cluster Initiative has been launched with the
purpose to establish food European consortia in order to share knowledge and experiences
In 2011 the global Food Security Cluster (gFSC) was established and based on a partnership
of 35 institutions from the UN, NGO, International Red Cross and Red Crescent Movement
with the aim to strengthen food security (Food Security Clusters, 2013).
Complete PESTEL and SWOT analysis of health food industry is showed below:
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STRENGTH WEAKNESSES
Supplying a serious of natural, Still there are some people do not
nutritional and organic foods aware how to eat health food
Customers ‘concern of health issue is
increasing(Euromonitor International,
2013)
OPPORTUNITIES THREATS
The increasing demand of healthy food The political risks
(European Union, 2012) The unstable economy and crisis
Intensive competitions
STRENGTH WEAKNESSES
A long production history: 18 years’ Some risks about a family to run
experience of healthy food sector company, such as: the corporation
Excellent quality for reasonable prices interest would be mixed, some family
for consumers members would be lack of work.
Completing individual service to our
customs
Quick adaptation to fit the market and
custom demand
Flexible production units and shout
delivery time
Convenience and innovation-------- 20
new products
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OPPORTUNITIES THREATS
Win one million Euro to support the Company needs more support from
company’s further growth in relevant countries’ government
EBRD(European Bank for institutions or organizations to increase
Reconstruction and Development) the brand image in third
(Vitalia, 2011) countries(Vitalia,2011)
Company has received government
financing support fund for export
marketing (European Union, 2012)
Low labor of production
4. BCG matrix
VN’s line of business would fall into the star category of the Boston Consultancy Group
Matrix (1968) (For more details, please refer to Appendix 1). This is because the health food
industry currently occupies a reasonable portion of the global market, and has potential for
substantial growth. Market research and recent publications from significant publishing
bodies like Eurominitor International, support this, making predictions for significant
growth within the industry (Scott-Thomas 2010, Starling 2012, Mintel 2012 and Food Insight
2013).
1. Go for Internationalise
To address the question why some enterprises decide to internationalize their activities,
Dunning (1993), presented three motives: the first one is the opportunity for a firm to obtain
natural sources and so a company can exploit foreign assets by using own capabilities. The
second motives that pushes a company to establish an investment in a foreign country is the
reduction of labour and materials costs, deriving from a better integration of international
activities. The last one refers to the firm’s capability to obtain knowledge sources and learn
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To internationalise, SMEs require financial aid from public bodies at national and European
level: at national level, national economic diplomacy networks are required and, for the food
On the other hand, EU should provide to SMEs services to seize the opportunities exiting in
foreign markets (Market Access Data Base, European Enterprise Network, etc.) (FIAB, 2011).
Moreover, the scheme developed in the EU Common Agricultural Policy, based on the
Council Regulation (EC) No 3/2008 of 17 December 2007, plays a fundamental role in order
to support the reputation of European food products in foreign markets (FIAB, 2011).
The threat is high because the packaged food retail industry was limited influenced by the
economic crisis. The demand of the healthy food remains stable. (Euromonitor International,
2012) Secondly, brand equity of Vitalia Nicola is relatively low comparing to larger brands.
In addition, the capital requirements for this industry are not too much. Thus, it is not too
The bargaining power of suppliers is relatively low. This is because there are wide range of
suppliers that are available for raw materials and labors for nutrition packaged food.
However, in order to find the best quality to price ratio supplier, the switching costs may
occur.
supermarkets. This makes VN flexible in choosing buyers. Along with the health, wellness
and convenience food trend, the value of nutrition packaged food increased too. Therefore,
Threats of substitutes:
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Quite high due to large number of similar or substitute packaged food available in the
market. For this industry, it is very easy to imitate the current products.
Competitive rivalry:
The competition between rivalries is medium in health food field. The competitive
advantage like reasonable price and innovation and convenience enhanced the benefits of
the company.
In the beginning, VN run their family business in Public of Macedonia. Then it expanded its network
to countries like Czech Republic and Slovenia and then Albania. Then VN expanded gradually to
European Union, America, Canada and then African Continent. In total, they have 30 exporting
countries (Vitalia Health Food, 2011). Currently, VN is based in Macedonia and have no subsidiaries
developed in other countries yet. According to the transcript of interview with Iskra Vetadzhokoska-
Mucnska, the manager in VN, they have famous retail chains like Carrefour, Metro, Billa, Spar,
model, VN is currently on the first stage which is focusing on Direct Exporting activities in
international markets. VN is still relying on the retail chain like supermarkets to sell
products within new markets. Based on the model of Uppsala Internationalization Process
Model mentioned in the literature review, the company is now lies in the second process—
Based on Bartlett and Ghoshal’s definition (1987), international strategy is that the company
repeatedly uses the same strategy and same products in its domestic market and
international markets. It makes sense because VN’s core value is healthy and when the
products first launched, few companies have the similar concept and products at that time.
Thus, the firm faced comparatively low pressures for local responsiveness and low
international integration.
It is very wise that VN decided to enter African continent in time. Recently, the healthy food
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countries like UK and Canada tend to be saturated, VN immediately look for new markets
Muslim families, VN adapt the Halal—standards for safe and health food products that
Competitor’s strategy
One of the competitors of VITALIA Nikola Ltd, is Podravka d.d.. It has different
internationalization strategy and product lines with VN. Podravka use transnational
strategies to overcome the pressures of local responsiveness and integration. It produces
products not only in the original country but also expand the production line to other
countries such as Poland. For Upsalla international process model, Podravka already
reached to the last stage—production in other countries. For globalization strategies, they
reached the fourth step which can tailor their products with local consumers needs properly
(Podravka, 2013).
Recommendations
1. Participating varies international fairs is a very useful way to enhance the brand image
of VITALIA in the world. The investment and participation should not be cut down or
even need to increase the investment to maintain the brand image constantly in
consumers ‘minds.
2. VN is a family business; it sometimes may cause problems if the company is not well
operated. Thus, training and education is essential to this situation. One time in a while,
not only employees but also managers should participate in business related training to
3. VN continually create new product type and expand product line. However, VN should
prepare a complete product profile specifying that which product is the Cash Cow, Star,
Question mark and Dog. Thus, managers can clearly decide which product is good to
produce in a large volume and which one is need to reduce or even stop the product
line.
4. Considering the globalization model, it is time to consider entering the second stage: set
up local sales in order to better understand what customers’ needs and wants in local
market.
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Conclusion
This report used PESTEL and SWOT to analyse the macro environment of international
marketing of health food industry and the micro environment analysis used Porter’s five
forces tool. As a result, the development trend of the health food industry is raising steadily,
the increasing customers’ concern lead to the high market demand. However, health food
industry still has a lot of aspects need to be improved such as pay more attention to staff
training, maintain brand image, product portfolio analysis and better understand customers’
requirements.
References
DUNNING, J., 1993. Multinational Enterprises and the Global Economy. Harlow: Addison-
Wesley.
big world- a new partnership to help SMEs seize global opportunities. Contribution to the
http://www.stockmarketnotes.blogspot.com/.../which-country-is-worlds-largest-food
FOOD SECURITY CLUSTER, 2013. Food security clusters [online]. Available at: http://www.
2014].
http://www.investopedia.com/.../top-agricultural-producing-countries.aspx. [Accessed 6
January 2014].
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THE FOOD CLUSTER INITIATIVE. Food clusters [online]. Available at:
Consultancy Group.
PODRAVKA D.D., 2010. management system [online]. East European: Podravka d.d. Availa
FOOD INSIGHT, 2013. 2011 Food & Health Survey: Consumer Attitudes Toward Food Safety,
via:http://www.foodinsight.org/Resources/Detail.aspx?topic=2011_Food_Health_Survey_Co
MINTEL, 2012. Americans are hungry for healthy foods [online]. Mintel. Available
via:http://www.mintel.com/press-centre/food-and-drink/americans-are-hungry-for-healthy-
SCOTT-THOMAS, C., 2010. Consumer interest in health and wellness on the rise [online].
usa.com/Suppliers2/Consumer-interest-in-health-and-wellness-on-the-rise [Accessed: 14
November 2013].
STARLING, S., 2012., Global healthy foods to hit $1 trillion in 2017:Report. Nutra
VITALIA NIKOLA LTD., 2013., News: About Vitalia [online]. Vitalia.com. Available via:
http://www.vitalia.com.mk/?ItemID=2FFC7E16457D9B4B9C5AD4B63A7EBDC3 [Accessed:
10 December 2013].
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OHMAE, K., 1989. Managing in a Borderless World. Harvard Business Review [online], (May).
December 2012].
OHMAE, K. 1990. The Borderless World: Power and Strategy in the Interlinked Economy. New
York: HarperCollins.
VERNON, R., 1966. International Investment and International Trade in the Product Cycle.
WEERAWARDENA, J., MORT, G.S., LIESCH, P.W., and KNIGHT, G., 2007.
BELL, J., McNAUGHTON, R., and YOUNG, S., 2001. Born-again global” firms – An
extension to the “born blobal” phenomenon. Journal of International Management, 7 ,pp. 173–
189.
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BELL, J., McNAUGHTON, R., YOUNG, S., and CRICK, D., 2003. Towards an integrative
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PRAHALAD, C. and DOZ, Y., 1987. The Multinational Mission: Balancing Local Demands and
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Appendix 2:
Reflection of teamwork
We have five group members in total for IBES assignment team. In the beginning, we
decided the wine industry and already contacted a company which would like to provide us
some information of internationalization strategy. However, two weeks past, we did not get
any useful respond from them. It wasted our two weeks. After that, we decided to move to
another industry and begin to write the report. When the Christmas started, four of us went
back to our own country and the contact of each other is very slow. The main issue of our
teamwork was connection with each other. Except for taking a relatively long time to assign
the tasks, we did try our best to finish the work together.
adaptation.
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