Delia School of Canada

Canadian Corporate
Expansion Strategy
International Business
BBB4M

Hayley White
Grade 12

Executive Summary
McGain food production is recognized as specializing in frozen food which are sold
all around the world. Our goal in business is to make people smile. McGain has a
long-standing tradition of helping to improve the quality of living of the
communities we serve. McCain also believes in corporate society responsibilities
by contributing to the societies that are in need of new investment. McGain makes
sure that our commitment to give back to the communities and currently we would
honored to expand that commitment in our Corporate Expansion Strategy.
In order to commit to our Corporate Expansion Strategy, our team continues to
look for new marketing opportunities, decentralized strategy to achieve a low costhigh yield strategy. Following our team's intense research and market development
studies, three countries were chosen to be our new targeted market for expansion;
Australia, Netherlands and Argentina.
At the same time, our team had also
researched on a few countries to source materials at the lowest possible cost. We
feel that Kenya is the country that we could best practice our tradition of 'helping
to improve the quality of life of the communities we work with'. Kenya offers low
costs in labour, lease and transportation etc. We should therefore consider Kenya
as our best sourcing country to serve the three new potential markets.

Description of Countries to Expand to

Australia
Australia is a unique and diverse country in every way - in culture, population,
climate, geography, and history. The majority of Australians experience mild
weather for most of the year. For their political system, they have two main
political parties and a number of minor parties, which make up the Commonwealth
Parliament. Additionally, each territory also has its own government. Australians'
multicultural lifestyle is reflected in the country's food consumption.
The reason why McGain should expand to Australia is because we believe we can
offer more novelty food. Australia offers sufficient produce, meat and poultry for
their market, however McGain wants to provide Australia with more choices such
as McGain Cheese Sticks and Beer Battered Onion Rings. It would provide
diversity from their culinary wants.

Argentina
Argentinas population comprises mostly of European immigrants and their
descendants and is estimated at just below two per cent of the total population.
They follow an open economy; an economy in which their economic activities
happen between domestic community and outside. In Argentina, people love

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squash, melons, nuts and sweet potatoes. It is recommended that McGain produces
'noisettes' to the Argentina market. This type of food contains a small piece of meat
rolled up into a ball of dough with nuts inside. The dough can also be replaced by
sweet potatoes. Therefore, McGain would be combining two types of food that the
Argentine society loves into one dish. Also, McGain would be recognised for having
a moderate collectivism cultural dimension. McGain would be valuing Argentinas
culture by integrating a small percentage of Canada's culture.

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Netherlands
The Netherlands ranks among the best places in the world to live and work in. Out
of a population of almost 16.8 million people, more than three and a half million
have a foreign background (statline.cbs.nl) and food is the largest industry. The
Netherlands have the 17th-largest economy in the world, and ranks 10th in GDP
(nominal) per capita; the country possesses strong buying power.

Dutch likes to eat patat (also known as chips or french fries) as well as mashed
potatoes and mashed vegetables. Since Netherlands diet is based on relatively high
carbohydrates, McGain believes significant profit can be generated producing
different varieties of french fries or potato products. We also believe we would be
able to meet the Dutch's needs.

Trade Agreements and Trade Organizations

Trade Agreements
For the Netherlands, McGain could use the European Union (EU) as one of their
trade agreements. The EU contributes to twenty-seven countries in Europe,
including Netherlands. It has its own flag, anthem, currency as well as financial
security and foreign policies. The EUs purpose is to promote peace, economic
growth, government co-operation, strong bonds between people, political
integration, and to ensure that the population can prosper in a safe society. This
particular market allows labour, goods, services, and investments to go through
boarders safely and freely.

Trade Organizations
World Trade Organization (WTO) promotes easy trade restrictions throughout the
world. Economic prosperity and social development is one of the missions at WTO.
This trade organization has three main purposes, which are to provide:
1)

A form of negotiations

2)

A set of rules

3)

Dispute settlement.

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WTO provides intellectual property protection as well as copyrights, trademarks,

geographical names and trade secrets. 1 Overall this will promote the exportation
from Kenya to Australia, Netherlands, and Argentina. It will benefit Kenya by
ensuring all nations can trade fairly, and disputes are settled by consensus. It
encourages governments to act civilized and fairly over protectionist policies.

1Guest, Lorie. "Chapter 5: International Trade Agreements and

Organizations."Fundamentals of International Business: A Canadian Perspective. Toronto:
Thompson Educational Pub, 2010. 137. Print.

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New Country of Sourcing - Kenya

Location
After thorough research and consideration regarding cost evaluation, labour
training and logistics in shipping, our team decided that Kenya would be the most
suitable country for McGain as part of its global sourcing. Farming is the most
important economic sector in Kenya, although less than 8 percent of the land is
used for crop and feed production, and less than 20 percent is suitable for
cultivation. 1517 percent of Kenya's total land area has sufficient fertility and
rainfall to be farmed, and 78 percent can be classified as first-class land. Kenya
is the leading producer in exporting fresh produce, such as cabbages, corn, and
onions. Small farms grow most of the corn and also produce potatoes, sweet
potatoes, beans and peas.
Not only is Kenya suitable for McGains agricultural needs, it would cost the
company a lot less to grow, produce, and ship the finished goods to our three
proposed new markets: Australia, Netherlands, and Argentina as compared to
manufacturing these goods in our plants in Canada.

Human Rights Issues

The most serious human rights problems in Kenya were abuses by the security
forces, including unlawful killings, torture, rape, and use of excessive force and
mob violence. Other human rights problems include infringement on citizens
privacy; restrictions on freedom of speech, press, and assembly; violence and
discrimination against women; violence against children, including female genital
mutilation (FGM); enforcement of workers rights etc. (Human Rights Practices
Report, 2011 United States Department of State) 2

Two NGO
McGain will work with two NGOs that could help the company abolish some of the
human rights violations. Kenyan Women Association (KWA) is an NGO which
prevents gender inequality. It provides women with different programs and
services, such as: Entrepreneurship Program, Transitional Program, Women and
Health Program, and Credentialing and Workforce program. Their mission
statement is The Kenyan Womens Association fosters a thriving African
community in the Pacific Northwest through support programs and advocacy for
women and their families so that they will lead connected, empowered lives and in
turn support others. McGain believes the Kenyan Women Association could be the
2 "Country Reports on Human Rights Practices for 2011 United States Department of
State."Bureau of Democracy, Human Rights and Labor: 49. Web.
<http://www.state.gov/documents/organization/186418.pdf>.

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solution towards human rights against torture and rape. The KWA will provide
women a safe working environment. Kenyan Women Association will also tackle
the restrictions on freedom of speech, press, and assembly. Women will be able to
express their minds freely without the worry of abuse. The second NGO McGain is
planning to work with One Acre Fund. This foundations function is to put farmers first.
Their service bundle includes: Finance farmers, Distribution of seed and fertilizer, Training
on agricultural techniques, and Market facilitation to maximize profits from harvest sales.
One Acre Fund will ensure the fair treatment for McGains farmers as well as help Kenyan
farmers to have a brighter future.

Marketing
Pricing
When introducing McGain products in Australia, Netherlands, and Argentina, McGain plans
on offering the products at a special promotional price. This means customers will be
allowed to buy samples at price before buying the product. This will allow the customers to
try the product. McGain would make extra profit off of the sample goods raising McGains
revenue. Also, according to Times 100, McGain had extra-fill packs which they gave to
customers for up to 30% extra free. Furthermore, McGain foods offer their products at a
special promotional pricing using the price-marked packs by allowing customers to try
their product.3

Product and Promotion

By following the multi-domestic strategy, each country will have their own appetizer to
reflect their own culture.
For promotion, we plan to create three advertisements, each containing a picture of a
different dish. This will demonstrate the cultural difference of each countries' food as well
as what products we will produce and distribute.

3 "The Marketing Mix in the Food IndustryA McCain Foods Case Study." Introduction. Time
100. Web. 13 Jan. 2015. <http://businesscasestudies.co.uk/mccain-foods/the-marketing-mixin-the-food-industry/introduction.html#axzz3OhtD9xeg>.

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For Australia:

According to language requirements, there is no official language in Australia, therefore no

language regulations are required to appear. McGain will chose the most appropriate and
most common language spoken to get the message across on the advertisement.
For Netherlands:

The national language used in Netherland is Dutch. Therefore, the slogan All is Good
must be translated into the appropriate language.

For Argentina:

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The most common language used in Argentina is Spanish. Even though the people
understand English, McGain needs to get the slogan across all people, not just some. That
is why the slogan All is Good should be translated into Spanish.

Place
McGain products need to be available everywhere! In all of the three new markets,
customers must be able to buy McGains frozen foods in local grocery stores, retail chains,
and wholesalers. The reason why McGains products are located in wholesalers is because
they do not use its own vehicles to distribute their products to their customers. According
to a business case study, McGain foods does not sell directly to its consumers but faithfully
strategize itself as a true business-to-business organization.

Consumer
McGain mainly wants to target towards families. McGain is strongly committed in not
advertising to children under 12 years old. We produce smiley fries for the children as well
as regular fries for adults. We also target those who want to still enjoy good food while
eating healthy.
McGain also is very careful to avoid ethnocentrism, which is why McGain will off their
products on the Internet in the language that their targeted market is located at as well as
provide an integration of the countries local foods within McGains food.

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Competition
McGains top direct competitors are Conagra Foods. Inc, J.R. Simplot Company and Blaine
Larsen Farms, Inc. Unlike the three direct competition, McGain is known to be the #1
french fries maker around the world. McGain supports McDonalds and owns 50 plants.
Conagra Foods Inc also sells frozen foods, however there isnt as much variety compared to
McGains. Furthermore, McGain takes part in different types of sponsorships allowing
McGain to gain more promotion from its other competitors.

Globalization Strategy
McGain will use the multi-domestic strategy as their Globalization Strategy. This strategy
tries to customize products, services, and marketing according to the local culture, and is
effective when there are cultural differences. This strategy best suits our company's needs
because this type of strategy reduces political and exchange-rate risks. 4 It also increases
production differentiation and greater responsiveness to local needs. In another word,
McGain would still maintain its Canadian culture while contributing to the three different
countries' wants and needs.

World Map

4 Guest, Lorie. "Chapter 7: Marketing Strategy."Fundamentals of International Business: A

Canadian Perspective. Toronto: Thompson Educational Pub, 2010. 137. Print.

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Logistics
McGain offers freight, warehousing, and distribution services for fresh produce. Ocean
freight is the most suitable type of transportation to ship the goods from Kenya to
Australia, Netherlands, and Argentina. The advantage to ocean freight is that it is
inexpensive. This will save McGain cost as well as keep the pricing of goods low. It will also

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save oil prices which affect domestic and foreign shipments.

motorized carriers, the transit time is considered to be short.

Also, compared to rail or

One supply chain issue McGain could face is piracy. Due to recent pirate activity, insurance
companies have increased the cost of insurance for maritime shipping in areas patrolled by
pirates. By observing the routes the ships will have to pass, the ships will pass through
pirated areas.

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Bibliography
"The Marketing Mix in the Food IndustryA McCain Foods Case Study." Introduction. Time 100. Web.
13 Jan. 2015. <http://businesscasestudies.co.uk/mccain-foods/the-marketing-mix-in-the-foodindustry/introduction.html#axzz3OhtD9xeg>.
"McCain Foods Limited Names of Competitors." McCain Foods Limited Names of Competitors.
Hoovers a D&BCompany. Web. 13 Jan. 2015. <http://www.hoovers.com/companyinformation/cs/competition.McCain_Foods_Limited.5cf1bee4ad9774fd.html>.
"Food in Every Country." Food in Argentina. Web. 13 Jan. 2015.
<http://www.foodbycountry.com/Algeria-to-France/Argentina.html>.
"Distances and Time." Transit Time, Distance Calculator & Port to Port Distances. Web. 13 Jan.
2015. <http://www.searates.com/reference/portdistance/>.
"Country Reports on Human Rights Practices for 2011 United States Department of State."Bureau of
Democracy, Human Rights and Labor: 49. Web.
<http://www.state.gov/documents/organization/186418.pdf>.
"Documenting Human Rights Violations of Sex Workers in Kenya." (2008): 38. Open Society
Foundation. FIDA Kenya. Web.
<http://www.opensocietyfoundations.org/sites/default/files/fida_20081201.pdf>.
"International Relations Online." International Relations Online. Web. 13 Jan. 2015.
<http://internationalrelationsonline.com/>.
"One Acre Fund." One Acre Fund. Web. 13 Jan. 2015. <http://www.oneacrefund.org/>.
Guest, Lorie. "Chapter 5: International Trade Agreements and Organizations."Fundamentals of
International Business: A Canadian Perspective. Toronto: Thompson Educational Pub, 2010. 137.
Print.

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