Agriculture Reference
In-Depth Information
the world, locating new markets for the results of their research and development in the proc-
ess. For example, fi rms in the hybrid corn seed business regularly rely on genes from seed
obtained from such places as Argentina, Italy, and northeast Iowa to develop a superior
hybrid that performs well across the same latitudes worldwide. In other cases, fi rms may
identify a new product opportunity in an international market, and be able to bring this idea
home to the domestic market.
Opportunities for smaller fi rms
It's not only the multinational conglomerates fi nding opportunities and success in the inter-
national marketplace. Small agribusinesses have found niches in serving needs around the
world. Their active pursuit of placing and developing products for international markets has
in many cases met with great success. While large companies reap the benefi ts of deep
pockets—economies of scale and greater returns on their investment in research and devel-
opment — smaller agribusiness fi rms are often more fl exible, allowing them to adapt to the
changing structure and demands of the international food industry. As with all business in
the international marketplace, successful global business endeavors by the small fi rm require
an understanding of the unique characteristics and structures of the customer in each given
instance (Connor and Schiek 1997).
Although countless factors infl uence the global marketplace during any business day, a
few key factors have helped increase the number of opportunities for small agribusiness
fi rms in the international arena. First, emerging markets have entered into the world trade
picture at a rate unequaled since post-World War II. Those markets are opening up to con-
duct business with international suppliers, partners, etc. These nations include those in
Eastern Europe, other countries of the former USSR, India, Latin America, China, and other
Asian countries. Many African countries are moving continually closer to allowing or
welcoming business from outside their borders.
The second key factor opening doors of world markets for smaller businesses is technol-
ogy. Simply put, today's small food and agribusinesses are often “well wired”—connected
via the internet by computer, modem, email, telephone, cell phone, and fax—making them
very competitive with much larger fi rms for emerging-market growth potential. Essentially,
the world is truly available to creative, innovative businesses. However, unlike the world
market of post-World War II when the multinational companies controlled these markets,
markets today are often open to the best competitors. Companies that succeed will be
fl exible enough to adapt to constant change and adjust to an array of challenges. Those
companies are often the small, agile companies.
A global market
Up to this point in this chapter we have talked about why agribusinesses may choose to con-
duct business in an international location. There is, however, a different viewpoint on inter-
national business. Instead of thinking about stepping into an international market, many of
today's successful fi rms approach business from the perspective of conducting business in a
global market. This distinction is subtle, but signifi cant. A global perspective is a philoso-
phy, an attitude, and or an approach to conducting business abroad. Global agribusiness
management is guided by concepts that view the world as one market. And fi rms with a
global perspective run their businesses this way.
