GLOBAL BUSINESS MANAGEMENT BIPIN ACHARYA

GORKHA AYURVED CO.

The case of Gorkha Ayurved co. is a classic example of opportunities with obstacles. It teaches
us a great lesson to be prepared for the opportunities along with the challenges that come
along with it especially when the country is in the phase of globalization.

Gorkha Ayurveda Co. Is a joint venture between Prem Raj Tiwari, other Nepalese and French
investors that produces herbal product. It has gained 6% market share and now targets the
international market for its product. The happiness that Prem Raj tiwari of Gorkha Ayurveda Co.
gets after the hefty order from a Swedish importer in August 2000 was soon dashed when this
Swedish importer withdraws the order. The Swedish importer states that the Gorkha Ayurveda
Co. products did not passed the satisfactory and sufficient sanitary and quality standard tests
for access. They also asked for a certificate of good manufacturing practices (GMP) for each
consignment. Thus the issue is of sudden standard tests and GMP that Gorkha Ayurveda needs
to solve if it wants to get access in the Swedish market.

In the meantime the company gets the order from a Sydney based importer who does not seek
any complicated tests and certification. This creates a confusion in the mind of Tiwari.He
doesn’t understand why such a difference between two countries. He assumes that may be the
problems related to Sweden are barriers to trade in the importing country. But soon he learns
that the buyers could ask for compliance with international standard under the WTO’s Sanitary
and Phytosanitary Measures (SPS) Agreement. That is because the WTO recognizes
internationally harmonized standards and encourages member countries to use them as a basis
for their SPS measures in order to reduce distortions in market access. The SPS Agreement is
consistent with the standards and guidelines of the FAO and WHO with respect to food
additives, pesticide residues, contaminants, hygienic practices and methods of analysis and
sampling for harmonizing international rules in this field of trade.
Tiwari understands that if he want to get the lucrative business order he has to prepare his
company to meet the international sanitary and quality standards under the guidance and
support of the domestic system

Lessons to learn from the case

In this age of globalization there will be many companies from the country who sees their
market globally and it is the duty of the government to lead them the way. Firstly there should
be regular government and private sector interaction to exchange the views on the multilateral
trade system.If the government had been able to provide the information already to the
company that wanted to do expand the business in a global way which in this way is the
information regarding those sanitary and quality test and GMP certificates the company would
GLOBAL BUSINESS MANAGEMENT BIPIN ACHARYA

not be hindered in exporting. Its governments duty to guide the exporters and at least make
them aware about the system that are recognized internationally.Gorkha Ayurveda Co can take
the initiative regarding this issue so that other companies in future doesn’t have to tackle the
same problem

Conclusion

Gorkha Ayurveda Co. must prepare his company for the international recognized standards.
Although the initial cost will be high but it will pave the way for the export in many countries.
Secondly the company must take an initiative in activating the government in ensuring that this
kind of situation doesn’t arrive again. Since we are the part of WTO it is intelligent to know the
system of international trade in depth rather than acting only when the problem arises.