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Market Entry Strategy Plan
Student’s Name: Turki, Binowaydan Hossam,Khalefah Omar,Almoallimi Salman, Ali
April, 8th, 2015
Introduction
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A Company dealing with stainless steel beef canning, slicing, weighing and buffering
machines in Poland seeks to collaborate with a well-established Company in the meat production
industry. The steel company wants to overhaul the whole production process of the meat
company by installing new machinery that will improve productivity by increasing efficiency
and output. Fred Usinger Inc. in the United States views this as the perfect opportunity towards
achieving its goal of venturing into the international market.
Fred Usinger, Inc. is a beef and cheese-making company located in Milwaukee in Wisconsin,
Old world Third Street in the United States. It is commonly known as Usinger and is famed for
its sausage making perfectionism. The company started up in 1880 by Fred Usinger after he
arrived in Milwaukee from Frankfurt, Germany. He had previously been employed as a butcher
in a butcher shop, which is presently N. Old world 3rd street before he decided to take over the
facility. He decided to develop the place and started by marrying the former owner’s niece. The
place was developed into the present Fred Usinger Company with the son Fritz and daughter
Debra taking over the company after the death of Usinger in 2006. The company’s mission is to
grow with the customers and enhance their product through efficient production of meat products
and commitment. Its vision is meeting the future challenges through teamwork and partnerships
to achieve excellence in quality service. The company realizes that its success and productivity is
and eventually its profitability depends on ensuring all the employees work to their full potential
to meet customers’ needs. The need to leverage employee skills is even more vital for the
company to make it competitive in the world market. Smarter ways, productivity and
cohesiveness are therefore mandatory. The company is therefore focusing on improving their
level of technology used to undertake procedures and machine operating systems for the cheese
and meat industry. To attain this feat, partners in the steel industry are being sought to provide
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the special parts for turning, welding and milling. The company from Poland represents a good
opportunity for the company to attain the feat. The turning machines will enhance efficient
transformation of raw meat into high quality ready meat products for retail companies faster
through synchronous scanning, pre-weighing, product feeding, buffering, grouping, packaging
machine, automatic feeding, portioning weighing and automatic feeding. The high technology
scales and weighing machines will enhance precise portioning, cutting and weighing of meat
thereby promoting efficiency. New products that are targeted by the reformed line are new
slicing lines for sausages, cured ham, and Cheese chunk cutting lines, cheese block cutters, and
cooked ham bacon. The company’s being sought should be able to provide milling and running
machines at an affordable cost that will transform the company’s international market endeavors
giving it a competitive edge over other meat and cheese producing companies in the world. The
partners should be currently active in welding, milling, turning and welding of stainless steel to
provide the machine parts required by the meat and cheese company. Some of the company’s
goals and objectives include:

Increased operating margins: This is achieved by ensuring employees are aware of their
individual goals and how those goals relate with those of the company. They therefore
become engaged in their work naturally, once they realize how much of a contribution
they make to the company’s success. This leads to focus being laid on working smarter
and efficiently that boosts the natural employee productivity in the long- run leading to
profitability and increase in operating margins.
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The company's strategies as stated in the Articles of association should be executed
quickly and effectively. This is propelled by having tighter visibility of goals enabling the
management to allocate the available resources quicker and proportionately across the
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multiple projects or sections involved. These strategies coupled with goal alignment also
unravel ineffective business initiatives by making certain that employees do not duplicate
roles thereby increasing the overall company’s efficiency in production. Goal alignment
fortifies the company’s leadership methods by affirming clearly the responsibilities
associated with particular goals in the organization. Efficiency in production means that
the production costs are lowered which translates into lowering the selling price of the
products making them competitive in the world market.

Reduction of employee turnover is also a goal that the company aims at achieving.
Employees are the major asset in businesses and their contribution cannot be understated.
The company therefore understands that improving the employee’s welfare and making
them comfortable in their day-to-day activities will go a long way in determining the
company’s success. Dissatisfied employees are often unproductive and absent for work.
This situation can be augmented by clearly aligned goals that makes employee’s feel as
though they are part of the company, rather that juniors whose responsibility is to receive
commands and execute them. Performance related bonuses and pay is another way of
ensuring that employees own up the company. A reward system closely linking both team
performance and individual work is therefore implemented to establish a performance
pay culture.
Organization
The company is owned by a sole proprietor with the support of the family members.
It is however contemplating on going public where they will sell their shares in the stock
exchange market through an IPO. This will help market the company’s products while
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also diversifying the risk involved in running the business. An IPO will also provide
funds for expanding the business as it plans into going into the international market and
expanding the business through implementing of new technology from Czech Republic,
Slovakia and Poland. The management of the company needs to be creative in conducting
operations relating to the employees and customers. The management employs creativity
in motivating employees, deciding on the right investment, marketing, and decisionmaking. The five functions of management are used as they separate the company’s
business functions such as finance, marketing and accounting and the management
process. The management functions are personalized to match the company’s structure as
discussed below:
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Planning: Forward planning enables the company to run smoothly with the
operational hitches minimized hence enhancing efficiency in production and
distribution of meat and cheese. The company has to establish the company
defines its goals and objectives and developing the respective activities and
strategies required to attain these goals and objectives. The management and other
levels of leadership are however flexible in marshalling the company’s resources
in achievement of the set goals and objectives.
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Organizing: the management exercises this function by coordinating the overall
structure of the company. The structure of the company is what determines the
company’s foundation and largely running of the day-to-day operations activities
of the business. The company’s management is involved in defining the tasks and
responsibilities to be allocated to each section of the production line and the
subsequent allocation to the employees.
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Staffing: The Company’s management is actively involved in the staff’s
recruitment process to supplement the personnel needs of the company. They
understand that without enough staff and the available ones not performing their
respective tasks, the company is under deemed to fail. Their role in staffing also
involves performance appraisal, training, staff training and development, transfers
and merit based promotions.
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Controlling: This function is to ensure that the company’s functions and activities
are operating as desired. The company has set certain standards regarding the
output of meat products expected per day and the quality of these products.
Regular checks are carried out to ensure that these standards are met.
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Coordinating: this function serves to harmonize all the other activities of the
company ensuring that they work in a synchronized manner. Regular meeting
with departmental heads are carried out to monitor the synchronization with
communication, direction and supervision being performed on a regular basis.
The stringent adherence to these five functions of management altering them to suit the
meat and cheese production company clearly demonstrates the company’s management
dedication and commitment to its success. There is no room for fluffing with action being
taken to any member of the management not up to the required standards. The company
is mainly involved in internal businesses in the United States where the demand for meat
and cheese is high. The perfection into a company producing high quality products has
made the company one of the best company’s in the business with customers particularly
impressed by the quality of the products available at competitive prices. With the planned
improvements in technology, the company is targeting the international market where it
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is expecting to go head to head with other multinational companies such as KFC and
M.C. Donald’s. The company has engaged in strategic alliances with other companies
carefully taking time to understand the strategies and vision of the other company to
understand how well the alliance would fit the company’s objectives. With consideration
to the level of synergy and the mutual rapport between the two companies, the
organization has formed a strategic alliance with Poly-Met Limited a company
responsible for supplying environmental friendly packing papers to the company. The
company has also formed an alliance with the University of California as the official
supplier of meat products in the institution. The alliances have helped save on costs,
reduce recycle time and entry into new markets.
Products and Services
Research carried out by the Center For disease Control and Prevention reveal that,
over 60000 Americans die from diseases caused by bacterial diseases which are resistant
to antibiotics. Eighty per cent of those bacterial diseases come from livestock products.
The reason for these antibiotic resistance drugs is attributed to antibiotic injection to
livestock through water and feeds to promote faster growth and prevent diseases in
livestock. This has brought a sense of fear in the market with customers cautious of meat
products. This may affect the market in the end. The increasing campaign against diet
diseases is also in line to affect the market for meat products. It is believed that the cause
of diet related diseases is the regular consumption of meat products without control. The
company sells most of its products through distributors spread all over the country with
international associates appearing once the company goes international. Selling through
selected distributors increases the degree of trust since it removes room for counterfeit
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products. The market niche for the product is mainly the working individuals who have
little time to go to restaurants for lunch or breaks. The company therefore packages its
products in an excellent manner to ease portability. The company though uses
promotional methods to appeal to the whole markets while also concentrating on meeting
the needs of the current niche. By concentrating on the niche, the company is able to
specialize on specific products and ingredients that suit the niche thereby matching the
client’s needs and building customer’s brand loyalty. The products also have a better
chance of reaching the target audience in other countries by demonstrating how the
products are specially made to match their needs. The company expects the demand for
meat products to remain for a long time since individuals cannot live without eating.
Bettering the products as targeted will make the products even better for market
satisfaction.
Market Overview
Market research carried out in Germany revealed that the demand for meat
products is high particularly sausages which are regularly referred to as hot dogs in the
United Sates. Research carried out in Frankfurt reveals that Sausages are the main and
favorite snack thereby making it a favorable market to target. The political environment
in Germany is well suited for carrying out business activities. This is also the case in
most of countries in Europe such as France, England and Spain. Penetrating countries
with no political unrests therefore becomes an easier task compared to most Middle East
countries such as Iran and Pakistan where the risk involved is high. The presence of
peace in these countries translates a favorable economic environment good for carrying
out businesses. The use of free market system in these countries also ensures that the
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market entry and exit is free with forces of demand and supply determining the prices of
the products. Europe being an economically advanced country, the market for meat
products is high with modernization playing its part in expanding the market even further.
Families are becoming too lazy to cook with easy to cook food more preferable. The
market for both processed and fresh meat products in Europe is worth averagely 271
billion euros, which represents a logical market, share to target. Fresh Beef products
represent one fifth of these sales with consumption rates varying from country to country.
The largest market for canned meat lies in Western and Eastern Europe with Foodservice
taking 20% of the market share.
Market Entry Strategies
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Usinger Sausages Company will target the Slovakia, Poland and Czech sausage market.
East European countries have a certain love for sausages. Major sausage companies
operating in the Balkan countries exercise monopoly; they have the unrestricted access to
the sausage market with dwindling competition. Usinger Sausages Company will attempt
to dissect this monopoly by penetrating this market.
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Slovacek Sausages Company, bobak Sausage Company, Tyson foods Inc., etc. are some
of the companies Usinger sausages will have to compete with to gain a foothold in this
market. These companies deal with manufactured food products like beef, chicken, pork
products, bacon, poultry, ham and cultural based food products. However, they have a
predominant preference in the production of sausage-traditional. Majority of the
competitors are multinational companies, companies with branches around the globe they
have strong competition strategies and inept experience in the sausage market.
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Nevertheless, Usinger Sausages Company occupies a favorable position due to its
familiarity with the European market and the quality of products it avails to its customers.
The company has trivial branches in these specific countries but due to low productivity
and size, key competitors who established roots in the market decades before Usinger
opened the respective branches overshadow them.
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Usinger Sausages Company will use partnerships, joint venture or a strategic alliance to
improve its chances of penetrating this market. The company will target a joint venture
with one of the giant sausage companies in this region, Slovacek Company looks set to be
target of the venture. This strategy will allow both companies to combine the strengths of
their marketing efforts to build sales revenues and build brand recognition. Both
companies will sign a contract that clearly outlines goals of the joint venture and the
responsibilities of both parties. This strategy has many advantages; it will increase the
advertising audience enabling both companies to reach more customers. In addition, both
companies will share profits or losses minimizing the risk, the companies will also
combine databases, assets and resources this gives them a greater operating power.
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The joint venture will use penetrating pricing strategy. This is where a company initially
sets the price of a product to be low to crack a wider market. Usinger Company is new
entry into the market it will require to use penetrating pricing to gain a foothold in the
market and increase its chances of decimating the other competitors. This pricing strategy
will result in faster diffusion and adoption of Usinger sausages in the targeted market; in
addition, it will create cost control pressures from the beginning improving efficiency.
However, this strategy may create a longterm price expectation for the product and this
will eventually prove difficult to raise prices.
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The company will use intensive distribution strategy, this type of strategy aims to provide
market saturation by using all available outlets. Intensive distribution gives the
consumers an opportunity to access the product in all relevant outlets; the strategy will
distribute Usinger sausages in every part of the targeted market increasing the relevance
of the product. The company will require promotion strategies to increase product
demand and awareness; in addition, promotion will present information to consumers and
differentiate the product to others in the market.
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Products giveaway is one strategies that the company will utilize, it will allow customers
to sample the products, and this methodology is useful in introducing a new food in the
market. Customer appreciation events will be necessary to create a personal connection
with the customers. Intermediaries like wholesalers and retailers are necessary
considering the use of intensive distribution. The intermediaries will provide services,
which the manufacturer will not be able to avail to customers.
Regulatory and logistical issues.
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Intellectual property consists of those items that are unique, have an economic benefit,
and in this case are the sausages from Bavarian Sausage Company. Usinger Sausage
Company should have a different recipe and preparation method that will make them
taste differently from sausages from other competing companies. They should have their
own trademark that stands them out in the event that another company would want to
rebrand their product and sell it as their own. The Bavarian sausage company should be
licensed. This gives the consumers assurance that the products are safe and can be
consumed as they have been approved by the local government. Proper dating on the
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sausages, clearly indicating their manufacture and expiration dates is very crucial. It will
gain the trust of consumers, as they will be confident in the safety of the sausages.
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Usinger Sausage Company should choose a means of transport that will cater for all
needs. It will handle the entire general, primary and bobtail liability needs of transfer of
their product. Usinger Sausage Company could either use air or road transport according
to the proximity of their market. They cannot use rail, as the sausages will go bad and
they are not bulky. Since the plantation of Usinger Sausage Company is in Germany, air
transport will be the most suitable mode of transport. This is most efficient in the
transportation to the other countries as it is fast and there is a lowered risk of the sausages
going bad before reaching their destination. Road transport the most readily available and
affordable will be proper for destination within a close proximity. The trucks or aircrafts
in use should be fitted will facilities for preservation of the sausages like refrigerators. If
the company chooses to use a transportation company, they should ensure that the
company would cover the risks involved. The company used should be well insured and
have impeccable service provision.
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Having the right papers for business is very crucial in making and receiving payments.
Having licenses is the first and most important document. It highlights are the crucial
details such as the safety of preparation, the health standards of the sausages. All the fees
that are required are paid on the application of the license and on the approval of the
license; one is free to get into business. Possessing a Preventive Control Plan (PCP),
which is a document that illustrates how food safety, labeling and product composition
are acquired, is also important. PCPs demonstrate that food safety risks ad hazards are
eliminated and controlled, as they are focused on prevention and system-based
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operations. They also address the equipment designs and maintenance, physical
structures, receiving, transportation and storage of products and record keeping. System
of equivalence ensures that the food commodities meet the expectations of the regions’
food safety standards. It offers guarantee that the regulations of the ventured country are
in accordance to the latter. Traceability ensures that on the event that there a food safety
risk, the origin and movement of the food can be traced. Good record keeping documents
come in handy during a food safety incident.
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Trade service providers have more regulations focusing on clearing and are efficient in
risk management. They result in the shortening of cycles especially in the clearance.
They open fair trading avenues with their competitors’ exchanges access. They respond
fast to client needs and do the work efficiently, as long as Bavarian Sausage Company
gets the suitable trade service providers. They lower costs by reducing wastes in ordering
operations. Trade service providers ensure their clients have the right documents meeting
all regulations. They ensure there is efficient product promotion in the targeted market.
They provide latest news in the business world, according to the changing markets. They
offer expert advice on the modalities to use when venturing any market and the strategies
to ensure a healthy business exchange.
Risk factors
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Market risks, the food industry are affected by a variety of risk factors. Consumer tastes,
preferences and perception being one of them. Usinger Sausage Company will have to
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incur the risk of convincing consumers to change their tastes and preferences, the
consumer affected brand loyalty. The consumers in this market already have a
preference; companies who have established a foothold in the market have cultivated
branch loyalty in the market. Furthermore, the company will have to deal with litigation,
regulation, and publicity pertaining food quality, health and other issues. These variables
are different in the market region the company is targeting. Food companies like Usinger
are susceptible to complaints from customers and government authorities because of food
quality or health issues. Different jurisdictions have their own laws to govern trade in
food products; the issue of health makes the laws established in different countries strict
and severe. The company needs preparation in case of unfair competition from the major
rival companies in the region. The established companies know the ins and outs of the
market and may use this knowledge to create an environment of hostility for the new
company.
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Currency and credit risks are unavoidable when penetrating foreign markets, the
company needs to fully investigate the market using research tools and understand the
credit and currency risks involved. Credit risks also known as default risks are risks
associated with a borrower not paying what he/she owes. Credit are not a common
occurrence in the food market however, the company may decide to lend money or stock
of the product to an intermediary but due to unknown technicalities the intermediary is
unable to pay. Credit risks may result to loss of principal and interest, loss of profit,
unnecessary production costs and decreased cash flows. It is useful for the company to
evaluate the risks associated with credit and adhere to the regulations and safety measures
pertaining the trade. Currency risk alternatively is the risk, which arises from the change
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in price of one currency against the other. The target market comprises of three countries
all of which operate on different currencies, Slovakians use the Slovak koruna, the
Czechs use Czech koruna while the Poles use the Polish zloty. The differences in
currency will affect the operation of the company unless there is manufacturing inside the
countries. However, all the countries involved being members of the European Union
(EU) will make the transactions easier and facilitate international trade.
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Political risks are probable in the target area, these countries have a history of violence
and political unrest the company will have to exercise caution when establishing
franchises in these countries. The company should conduct research to understand the
levels of security in the markets and the protection they will offer their assets and
products from destruction. The company should also consider insurance on the political
risks in the countries. Multinational companies have become the latest targets of terrorist
groups and radical groups; the company will need to elaborate and invent measures to
prevent this risk. Risks are unpredictable they can occur at any moment the company
needs to have a recovery plan in case one if the unfortunate occurs.
Implementation plan
An implementation plan is the detailed listings of activities, cost, difficulties expected and
schedules required to achieve objectives of a strategic plan. The company will undertake
research to determine the viability of establishing a business in the target area.
System overview: Usinger Sausages Company wants to expand their market into Slovakia,
Poland and Czech Republic. The purpose of this project is to understand the logistics and
necessities of this task.
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System organization: The Usinger Company is a private company located in Germany, the
company deals in the production of sausages and other food products.
Key Activities
timeline
Cost
Market target identification
6-12 months
6 million Euros
Conducting the necessary
6-12 months
9 million Euros
Joint venture
3 months
Anonymous
Synchronization of activities
12 months
12 million Euros
manufacture
5 years
40 million Euros
research