Internationalization of a Local Business in Bangladesh

Submitted to: S.M Yousuf Mallick

Independent University Bangladesh (IUB)

Course Name: Introduction to International Business (INB - 301)

Section: 01

Submission date: 29th August, 2021

Submitted by: Team Metaphor

Name ID
Fardin Mursalin Rabbi 1920479
Fariha Binte Hafiz 2020565
Raisa Intesar Hridi 1820212
Maisha Muhtasim Momo 1920185

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 LETTER OF TRANSMITTAL

29th August, 2021

S.M Yousuf Mallick

School of Business and Entrepreneurship (SBE)

Independent University Bangladesh (IUB)

Subject: Internationalization of a Local Business in Bangladesh

Dear Sir,

Assalamualaikum, we submit here with the attached report on, “Internationalization of a Local
Business in Bangladesh” in the process of bringing this report, the members of the team have
endeavored to their utmost to maintain the highest of qualities in terms of writing, information
collection and data analysis. The members have furthermore striven to make this report as
comprehensive and relevant to the course as possible.

We would also like to take this opportunity to put forward our most heartfelt thanks for giving this
opportunity. We hope you find this report satisfactory.

Sincerely Yours,

Team Metaphor

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 ACKNOWLEDGEMENT

In performing our assignment, we had to take the help and guideline of our respected faculty, who
deserve our greatest gratitude. The completion of this assignment gives us much pleasure.

We would like to show our gratitude to S.M Yousuf Mallick sir, Independent University,
Bangladesh, for giving us a solid guideline for the assignment throughout numerous consultations.
We would also like to expand our deepest gratitude to all those who have guided us directly and
indirectly in writing this report. Many people, especially our team members themselves, have made
valuable comments and suggestions on this proposal which gave us an inspiration to improve our
task by a large margin. We thank all the people for their contribution to our assignment.

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Table of Contents
Introduction ..............................................................................................................5

Company Background: ...........................................................................................5

Our targeted products: ........................................................................................5

Goals and objectives: ...........................................................................................7

Country Selection .....................................................................................................7

Evaluation .............................................................................................................9

Choosing entry mode ...............................................................................................9

Internationalization ...............................................................................................12

Conclusion...............................................................................................................15

References ...............................................................................................................15

Contributions of the group members:

1. Introduction, Products and Goals: Raisa Intesar Hridi – 1820212

2. Country Selection and Evaluation: Maisha Muhtasim Momo - 1920185

3. Choosing Entry Mode: Fariha Binte Hafiz - 2020565

4. Internationalization: Fardin Mursalin Rabbi - 1920479

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 Introduction

Company Background:
Metaphor Food Company is a 100% Bangladeshi company established in 2005. Over the
years we have been focusing on doing only one thing: made the best quality and healthiest
fresh jam for consumers every day. Our core business is the sourcing, production and
supplying of freshly made jam to our customers. We started our business as a humble
supplier to selected five-star hotels. Gradually our business extended into the retail segment
and now becomes the largest retail fresh fruit jam supplier who produces and supplies
house brand fresh jam for our country.

In recent we are planning to expand our product into 3 countries:

1. USA
2. Canada
3. Italy

Our targeted products:

1. Mango Jam:

It made by organic mangos. Mango is the king of all fruits. When the actual season of mango
comes in Bangladesh we collect it and make it to serve best flavor to our customers. Also we

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preservative it. Mango jam came with 2 different color orange & green. The mango jams are
processed from the locally sourced fresh mango for breakfast tables around the world. These are
preferred by children.

2. Guava Jam:

Guava Jam is well known to all and it can be caned in sugar syrup or made into fruit butter. Its
juice is used for the preparation of sherbets and ice cram. Vitamin C present in guava is good for
oral cavity, teeth and gums. Those who have cold, cough, lung infection, sore throat will benefit
from having guava. It had vitamin A and Vitamin A helps to increase eyesight. Guava jam also
came with 2 or 3 color Red, Orange & sometime green. It all made by the seasonal fruits.

3. Lychee Jam:

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Lychees contain several healthy minerals, vitamins, and antioxidants, such as potassium, copper,
vitamin C, epicatechin, and rotine. These may help protect against heart disease ,cancer and
diabetics. Lychee contains a good amount of potassium. As we made all of our jams with fresh
fruits everyone loved to have it in the morning breakfast. Lychee jam also came with some colors.

Goals and objectives:

Our goals and objective is to be the market leader in Bangladesh and hold this position also into
the international market. Followed by that they plan on focusing on analyzing and assessing
consumer needs and wants subsequently providing products.

Metaphor Food Company every step of value chain will be driven by the urge to help consumers
and making them satisfy.

Country Selection
As we are starting as an exporting company from Bangladesh. Our company mainly exports fruit
jams. We identified 3 countries for our company, they are:
1. USA
2. Canada
3. Italy
The people of these three countries eat fruit jam for their daily breakfast. Especially in USA,
people eat more jam than any other countries. “Sweet Pepper Marmalade” is one of the most
popular jam in USA.USA imports around 284.3 million USD word of Jam every year. So we can
see there are already huge numbers or firms that are exporting. We decided to export our products

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to USA. We are able to produce high-quality jam in lower cost than any firm in the market right
now.

The reason we chose USA as our foreign entry market:

The other option of Countries were Italy, Canada, USA. The reason we chose these three country
because they had the highest consumption of jam. it is one of the popular English breakfast item
for them. From these three we chose USA as our target market. Italy has the most exporting number
of jam in foreign market. The environment of Italy is quite friendly for producing good quality of
jam. That is one of the biggest reason we didn’t choose Italy as our target market. Canada is also
renowned for importing jam. but their market is quite similar to the USA market. USA has the
highest importing number of jam. They also export a good number of jam but they don't have a
favourable environment to produce seasonal fruits that’s why the price of their product is quite
high and also they are importing a good number of jam from Italy it is also making the product
price higher. So here we get the best opportunity to entry. Most of the US farm are importing
seasonal fruits from Africa Which is making their product production cost higher. From
Bangladesh we will be able to provide them best quality seasonal fruit jam in low cost. that is why
we chose USA jam market.

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 Evaluation
Here we will now discuss the socio, economic, and political aspects of the US.
 Social Aspects: Though most Americans identify themselves as middle class, American
society and its culture are considerably more fragmented. Social class, generally described
as a combination of educational attainment, income and occupational prestige, is one of the
greatest cultural influences in America.
 Economic: USA is one of the freest market in the world. From our company point of view
we will have better environment as a privately owned business to export our product there
and earn sufficient amount of profit.
 Culture: These jams go a long way with US’s culture. It has been in the food supply i9n
their country for a long time. Every morning for breakfast they eat jam with bread.
 Political aspects: USA has was 10th position to be politically stable country but last year it
ranked 28th. After the election of 2020 it is quite stable and the situation is becoming better.
Both of the country Bangladesh and USA politically supports similar point of view such
as Political Stability, Human Rights, Democracy, Terrorism counter, Climate change etc.
Bangladesh is also a major ally of America in South Asia.

Choosing entry mode

The first three steps before entering into the foreign market:

1. Entering the USA market:

 Political stability: USA has was 10th position to be politically stable country but last
year it ranked 28th. After the election of 2020 it is quite stable and the situation is
becoming better. Both of the country Bangladesh and USA politically supports similar
point of view such as political stability ,human rights ,democracy, Terrorism counter,
climate change et cetera. Bangladesh is also a major ally of America in South Asia.
 USA have free market system: Free market in a country is, that a country allows
unrestricted competition between privately owned businesses. USA is one of the most
favored free market in the world. From our company point of view we will have better
environment as a privately owned business to export our product there and earn
sufficient amount of profit.

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  Inflation rate in USA: Last five years inflation rate has increased little by little. Which
indicates that buying power of USA citizens are getting lower. We have to make it our
opportunity to sell our products. As we will be able to sell our products in a lower price
we can attract the market before our competitors.
 Higher rate of private sector debt: Since 1950 USA private sector debt has increased
by 150%. Which is quite high. As we are starting as an exporting company from
Bangladesh we might not have to think about it currently. But if we are able to earn
good amount of profit for doing FDI we might need it.
2. Late entry in the US market:
 Entry is late when the firm enters the market after firms have already established
themselves in the market. USA imports around 284.3 million USD word of Jam
every year. So we can see there are already huge numbers or firms that are
exporting. Our big competitors are France and Italy. “Sweet Pepper Marmalade”
is one of the most popular jam in USA. As we are entering the market late we need
a strong advantage that these firms don’t have. That is our low cost offering. We
are able to produce high-quality jam in lower cost than any firm in the market right
now. Which the only and big reason to enter late. Also we will be able to learn from
other exporters in that market. Which will lower our costs of business failure. We
also won’t need to educate about our product to the market because it is a well-
known English breakfast item.
3. Small scale entry: as there Few firms who export from Bangladesh we don’t have enough
knowledge about the foreign market that is one of the big reasons to enter in a small scale
which will give us opportunity explore our And gain knowledge. If our product doesn’t get
enough popularity to earn sufficient amount of profit we will be able to stop our exporting
and start from the scratch in a new market with experience.

Choosing exporting as our entry mode:

Exporting is a common first step for many manufacturing firms. Every decisions has a negative
point and a positive point. Here though having some negative side effects from exporting our
manufactured product from Bangladesh we will be able to overcome It by taking certain steps.

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Reasons exporting is attractive for our product:

1. Exporting avoids costs of establishing local manufacturing operations. In USA the labor
cost is quite high and establishing a company through FDI might be really costly for a start
of business. Establishing a company in Bangladesh is quite cost sufficient from the political
point of view the government will give us enough support to export Bangladeshi product.
Which we will not get if we start doing FDI, joint venture, licensing or franchising.
2. We can build a global presences quickly. If our product gets enough buyers and
acknowledgement in USA we will be able to build a brand image quickly and make
customers depended on us. It can also help us learning about more market opportunities in
different countries such as Canada, Mexico etc.
3. We are already producing our product where we will get lower cost manufacturing
opportunities. There are huge number of labor and cost of labor is lower than any other
developed countries. Bangladesh is well known for its seasonal fruits. Which means we
are not depended for our ingredients to produce high-quality organic jam. The way USA is
producing their most popular jam is by importing fruits from African countries which
actually increases their costs. Here we have land, labor, capital which will significantly
reduce our cost than other competitors.
4. High transportation and tariff might make it uneconomical. We are going to produce our
product in economic scale to reduce costs and because of our advantage of having lower
labor costs and enough ingredients to produce, it will be quite budget friendly even if we
add tariff and shipping costs. USA uses the currency called dollar which will also make
easier to convert in our BDT currency. We will try to have proper documents to get help
from bank and keep the currency value stable.
5. We will try to properly monitor our exporting procedure and meet the best interest for our
company. As this company is built through partnership. All the 4 members will try our best
to make profitable for our own sake.

Foreign direct investment in near future:

If we become a successful company we will try to do for indirect investment in near future. Doing
joint venture, licensing, franchising, might be complicating for this market. Because we don't want

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to share our secret recipe and ingredients. As we will be already producing our goods in such a
low cost and efficiency, it might be harmful for us to do FDI sooner.

Internationalization

Bangladesh is one of the largest fruit producer countries in the world. It produces various types of
seasonal fruits. In around 17-20% spaces of the nation, natural product creations were 20000-
100000 tons. Many natural products are filled in Bangladesh of which banana (Musa paradisicum),
mango (Mangifera indica), watermelon (Citrullus vulgaris), pineapple (Ananus sativus), jackfruit
(Artocarpus heterophyllus), melon (Cucumis melo), guava (Psidium guava), khira (Cucumis sp),
(Litchi chinensis), green coconut (Cocos nucifera), lime-lemon (Citrus limonium and latofolia),
papaya (Carica papaya) and ber (Zizypus mauritania) are predominant. For internationalization,
there is 4 kind of strategy that fruit jelly/jam company Metaphor can follow for spread their
business in other countries. They are:

 Localization Strategy: Localization Strategy is a business procedure that considers significant

factors, for example, buyer propensities, purchasing conduct, and the social history of every
country where it works. Unfamiliar customers are totally happy with the subjective
administrations given by the worldwide organization using country-by-country singular
clients, and they don't recognize them from nearby organizations. The organization utilizes a
particular deals and promoting technique in each market where it works. The organization
likewise adjusts various administrations for each market dependent on client needs.
 Global standardization Strategy: It is the capacity to an organization or business to utilize a
similar showcasing plan starting with one country then onto the next. When a product has the
same appeal all over the world, global standardization is useful. If a customer in the USA

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 consumes a product one way, and a customer in Bangladesh consumes the product the same
way, it because utilizes global standardization.
 Transitional Strategy: The global business procedure centers essentially around fare and
import interest. The organization, then again, doesn't open branches in different countries and
stays situated in its own country. Understanding the unfamiliar market, examining assets,
creating goals, recognizing market drifts, and setting up contributions are altogether essential
parts of a global system.
For instance, Jam/Jelly in USA, we figure we ought to go for a transnational strategy.
Transnational technique is the most useful system among all internationalization strategies.
The transnational procedure varies from a worldwide technique in that a worldwide reaction
takes a certain something and offers the item to all individuals through all stages and advances
it the same way. Jute stick is the most well-known particularly in USA and some different
nations. In view of target markets, Transnational Strategy is a more designated way to
showcasing and advancing our item. On the off chance that we follow transnational system it
will effectively spread the business market and the designated country.

Benefits of Transitional Strategies:

 Opportunity of Greater Spread of Business: Business that utilizes a transnational system

is opening areas and offering items or administrations to a fresh out of the box new market
that it hasn't recently been associated with. This is a business opportunity that can make a
lot of development for organizations that do it successfully. Staying in one nation might
have less dangers than opening in numerous different nations, however the prizes can be
huge, particularly as far as brand mindfulness and income. This is particularly obvious in
case the organization's rivals are not working universally.
 Good market Penetration: For business companies that need to work globally, a
transnational system can permit them to enter a neighborhood market all the more viably
and make a client base rapidly. A main justification this is that nearby representatives
should realize how to connect with others in their way of life better than a pariah may.
Moreover, in case there is a nearby group settling on the items or administrations and the
promoting approach, they are probably going to be more compelling than a group of

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 untouchables. Organizations that aren't as included locally where their items are sold may
discover to a lesser degree a positive gathering.
 Cultural Understanding: Transnational organizations regularly enjoy an upper hand over
different kinds of worldwide business techniques, which is that the focus on neighborhood
workers and the requirements of nearby clients can make an organization more receptive
to the necessities of the nearby culture. Regardless of whether a few workers have been
acquired from different nations, there are probably going to be numerous nearby
representatives who were naturally introduced to that culture and who have an immense
measure of social information that could require long periods of exploration for another
person.
 More Efficiency: As well as setting aside cash through neighborhood areas, a transnational
business might track down that those areas likewise increment effectiveness. For example,
as opposed to new items for that nation being planned abroad, fabricated abroad, and
afterward sent to the neighborhood circulation, an organization might have nearby
representatives making the items that will interest the nearby market, they might be
produced locally and afterward should be delivered a more limited distance. This expands
the effectiveness of the interaction and likely likewise decreases costs.
 Less Cost: Having neighborhood workplaces or areas can set aside an organization cash
over the long haul for a couple of various reasons. Nearby representatives might expect
lower pay rates or wages contrasted and the nation of origin of the business, so recruiting
them to accomplish the work is less expensive than bringing in workers or employing more
representatives in the business' essential area. Organizations that make items or have
distribution centers of stock might find that having nearby stockrooms and assembling
offices can lessen the expense to have those things dispatched into the country, particularly
with customs costs.

Short and Long Term Goal:

 Short Term Goal: We will offer all the help to our clients so they can buy our item. Our
need will be client and the value range. We likewise need to work for supply the crude
material accessibility throughout the year.

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  Long Term Goal: Jam/Jelly have a wide scope of purchasers, so for long haul we need to
guarantee our item and quality. By this we can make more market for our Jam/Jelly.

Conclusion
As a country where most of the people dependent on agriculture sector, it is easy to produce more
fruits like mango, lychee and guava. The cost of production can be less if there is a proper and
perfect production of the Jam/Jelly and export it to the USA market as expectation. In modern
countries the consumption of Jam/Jelly is increasing day by day. People are consuming the product
with taste buds and also it is easy to consume in a short time in morning before the office hour and
the evening snacks. With proper utilization it’ll be a good market for export of Jam/Jelly.

References
 Editorial Team, I., 2021. Transnational Strategy: Definition, Benefits and Challenges. [online]
Indeed.com. Available at: <https://www.indeed.com/career-advice/career-
development/transnational-strategy> [Accessed 1 April 2021].
 Masum Molla, M., 2021. Fruits for all seasons. [online] The Daily Star. Available at:
<https://www.thedailystar.net/frontpage/all-seasons-fruits-production-in-bangladesh-
1746565> [Accessed 21 May 2019].
 exporters, T., America, C., America, N., East, M., America, S., products, T., care, P., metals,
P., PARTNERS, T., partners, T., America, C., East, M. and America, N., 2021. Top Jams
Exporting Countries 2019. [online] Worldstopexports.com. Available at:
<https://www.worldstopexports.com/top-jams-exporting-countries/> [Accessed 29 August
2021].
 WIRE, B., 2021. Global Jams, Jellies and Marmalades Market and the Impact of COVID-19
in the Medium Term - ResearchAndMarkets.com. [online] Businesswire.com. Available at:
<https://www.businesswire.com/news/home/20200521005265/en/Global-Jams-Jellies-and-
Marmalades-Market-and-the-Impact-of-COVID-19-in-the-Medium-Term---
ResearchAndMarkets.com> [Accessed 21 May 2020].

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 Saxena, D., 2021. What is Transnational Strategy in International Business? - Super Heuristics.
[online] Super Heuristics. Available at: <https://www.superheuristics.com/what-is-
transnational-strategy/> [Accessed 29 August 2021].

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