Agriculture Reference
In-Depth Information
regulations have become a tool to use in protecting domestic agribusinesses and producers
from competition (and thus in these cases are termed “nontariff barriers”).
The WTO agreement stresses the desirability of common SPS regulations, and the agree-
ment provides a framework for distinguishing legitimate SPS regulations from those that are
not. Three international organizations (the FAO/WHO Codex Alimentarius Commission for
food; the International Animal Health Organization for animal health; and the FAO's
Secretariat of the International Plant Protection Convention for plant health) have been des-
ignated as sources of scientifi c expertise and internationally agreed-upon standards. These
organizations work to promote and address SPS-related regulations in areas such as food
additives, pesticide residues, animal health, and plant health.
The benefi ts of standardized SPS regulations are enormous because fi rms can develop
new products that simultaneously meet the requirements of all markets rather than develop-
ing and testing confi gurations of products that meet different regulations. However, the con-
cerns that brought about many of the SPS regulations must be considered in establishing
more general standards.
Management challenges
Managing employees, clients, or accounts can be a challenge even when all are operating
under the same roof. Throw in several thousand miles, a different language, culture, govern-
ment, and monetary system and one has a management challenge on hand to say the least.
Astute and deft handling of the numerous political and economic uncertainties in an interna-
tional market can be among a manager's most challenging problems. Managing such issues
and events may become heightened or intensifi ed when put in motion in the international
arena.
Entering international markets
As the global marketplace becomes reality to an ever-increasing number of agribusinesses,
an evolutionary process becomes evident. This evolution may take place by design or by
happenstance, immediately or over a course of years. However, many observers point to
three phases of evolution as a fi rm moves from a domestic to a global perspective.
Some companies arrive in the international market via detour—some even by accident.
Introduction to the international market for these companies may be the result of an interac-
tion with an international buyer or perhaps an export company. Often, in these cases, the
international market is not treated any differently than the domestic market. Changes to the
product, the marketing, and so forth are not made to fi t the international market—fi rms
simply sell what they have always sold, but to a new, international customer group.
However, over time, many of those same fi rms shift to purposeful rather than incidental
marketing of their products abroad and enter the second phase of the evolution. This means
a deeper level of involvement, assigning resources specifi cally to developing markets in
specifi c countries, looking for opportunities in production and distribution of the products,
etc. This phase of the evolution of the global fi rm is known as the export marketing phase.
Here, the business conducted internationally is viewed as a sideline to the normal domestic
endeavor, but it is recognized as a separate and unique business.
The third phase emerges when a fi rm truly develops a global perspective, and manages its
business accordingly. Decision-making at all levels is done in a global context. Production
and raw material sourcing decisions are optimized around the world, marketing similarities
