Учебная работа. Expanding Finnish fertilizer and soils market
Expanding Finnish fertilizer and soils market
Санкт-Петербургский государственный
Политехнический Университет
Международная Школа Управления
Курсовая работа
На тему:
«Expanding Finnish fertilizer
and soils market»
Выполнила:
студентка гр.4151/10 Черезова О.С.
Проверила:
доцент, к. э. н. Евсеева О.А.
Санкт-Петербург 2013
Content
Introduction
Chapter 1. Company’s characteristics
1.1 History
1.2 Mission, aims, directs of development, resource potential
Chapter 2. Analysis of the potential opportunities and threats of
international business
2.1 Description of the factors that characterize the business
opportunities in Finland
2.2 Assessment of the potential company seeking to expand its
operations
2.3 Absolute and comparative advantages of entering Finnish market
2.4 Analyses of risks due to entering Finnish market
Chapter 3. The business plan of the penetration Finnish market
3.1 Production description
3.2 The production plan
Conclusion
Resources
Introduction
Nowadays more and more companies see their way of
development in entering new markets and as usual they are international. This
happens because internal markets of regions inside country are saturated or
this is not profitable to penetrate them. But at the same time international
market could afford more perspectives for company to grow.a country for my
research Finland was chosen. In 2012 Finland became «the most stable
country in the world» according American fund «Fund for Peace”. Also,
my choice was based on this fact that the boarder is close to Saint-Petersburg,
the turnover between Russia and Finland is growing from year to year, and even
on government level the business partnership between countries has a strategic
direction for development. Many organizations were founded to help in creation
contacts between Finnish and Russian business, for example Finnish-Russian
Chamber of Commerce. Both countries are interested in development partnerships,
so, I think that Finland is a good country for entering as an foreign
market.other side, the population of country is not high, about 5 429 894
(according 2013 year), but according the UN estimation Finland is ranked 6th in
the world for quality of life. To choose the sphere where my possible company
could operate, I decided to found out some features are typical for local
population to determine customers’ needs. After looking through statistics
characterized Finnish people, I found out that about 75% of residents in
Finland are homeowners, and 64% owned an individual house with land. In the
private property is 400 thousand apartments / houses, 240 thousand from them
(60%) is owned by private individuals, so 64% from 240000 is about 153600
private houses with land.
market finland business plan
Unlike Russia growing vegetables and maintenance
vegetable gardens are not typical for local citizens, just for part of Russian
immigrates, but breeding aesthetic plants, flowers and lawns are popular among
householders.’s why I chose the company which scope is fertilizer production. I
decided to focus on middle size company with sufficiently diversified products
which focus group is horticulturists and gardeners as amateurs and
professionals.
ЗАО «МНПП «Фарт», which further in
this work is named as «Phart» company, in my opinion fits these
criteria., the aims of this work are:
· characterize
the company
· analyze
Finnish fertilizer and soil market
· analyze
factors influence on new market penetration
· develop a
strategy of new market penetration
· work out
recommendations
Chapter
1. Company’s characteristics
1.1
History
«Phart» company was established in 1990
in Saint-Petersburg. First sales of bio-fertilizers were in February 1991. In
1994 was created new brand «живая Земля”, which was made by a new technology and still
stays the most favorite among Russian costumers. Then company continued to
diversify products by creation new kinds of fertilizers with different
content.company continued to grow. In 1996 — 1997 the company’s sales
significantly increased. In many ways, this was due to the fact that the
«Phart» was the first manufacturer of organic fertilizers began to
focus on the studying of the range and advertising. The company’s products
became in high demand throughout Russia. By 1999, the company embraced a dealer
Network all over the regions of the Russian Federation and achieved sales
increasing in 2.5 times compared with 1998. The further growth of the company
was because of expanding of the production base. New technology and equipment
were bought in 2004.recent years, the marketing approach was the basis for the
development of the company. Specialists of «Phart» constantly monitor
the market, carry out various studies, working closely with customer reviews.
The result was a new assortment policy of the company.quality of the products
provided by the fact that at the time «Phart» is one of the most
modern company in the industry: a fully renovated park peat technology,
expanded manufacturing facilities and almost completely automated production of
soils and fertilizers. sales Network was organized — five regional offices in
the cities of Moscow, Perm, Novosibirsk, Krasnodar and Ulyanovsk and many large
wholesale customers in all regions of the Russian Federation and foreign
countries.
1.2
Mission, aims, directs of development, resource potential
The work of the company is guided by the
principle of «land health — the health of your family,» and is
committed by providing gardeners and florists natural organic fertilizers and
soil-ground of the highest quality. All products are harmless to humans and the
environment, production has the necessary certificates and included in the
National Catalogue of pesticides and agricultural chemicals permitted for use
in the Russian Federation.the company’s front Page the mission wasn’t strongly
defined, but from the description above I formulated it as «To provide
costumers natural organic fertilizers and soil-ground of the highest quality,
which are not harmless to human and the environment”., aims were not founded as
well, so I formulated them as:
· Stay a leader
at the Russian natural organic fertilizers’ market
· Be social and
environment responsible company
· Take stable
growing niche on foreign market
These are global and general aims and concerning
this project to take 5% of Finnish organic fertilizer market in 1 year
operation., in my opinion, company’s values should be:
· Costumer’s
needs
· High
professional qualification
· Economic
profitability
One-third of the market of packaged organic
fertilizers (capacity — 100 thousand tons per year) is controlled by the St.
Petersburg company «Phart», producing soils is based on the life of
the product Californian worms and peat. The company is positioning itself as a
leader on Russian fertilizer market. The company produces peat on deposit
«Kaushtenskoe» an area of 998 hectares.
It registered the deposit, where there is complete cycle of bog-preparation
work.company’s production has really massive demand both in Russia and abroad,
Belarus, Ukraine, Lithuania, Latvia, Estonia, Moldova and Kazakhstan. In some
countries «Phart» has partners and retailers, with another works by
export.my opinion, directs of development should be focused on expanding
foreign markets, product range and production base.my work focus on Finnish
market, so and company’s future development I see in penetrating this market
and in adopting production to special costumers’ needs that could be different
from usual for «Phart» clients.
Chapter
2. Analysis of the potential opportunities and threats of international
business
2.1
Description of the factors that characterize the business opportunities in
Finland
Finland belongs to the group of countries that
effectively use boarder functions between the post-Soviet countries and Western
Europe. Finland is the only member of the European Union, directly adjacent to
the largest post-Soviet state — Russia. This allows the country to effectively
manage its economy, being a member of one of the most powerful nowadays,
economic and political associations and building a defined relationship with
the equally influential northeastern neighbor. Thus, the geopolitical situation
in Finland is quite profitable and creates diverse perspectives on the
development and deepening of economic relations with various partners. The
undeniable advantage of Finland is its stability, reliability, and advanced
infrastructure of telecommunications, which provides a high level of
interaction between economic entities.2013 according World Bank list «Doing
Business” Finland took 11 place as one of the most attractive countries in the
world. and its economy base on forest industry. Indeed, Finland has no other
natural resources, forest — the main wealth of Finland. Finnish wood processing
company UPM-Kymmene and Stora Enso — one of the largest in the world. By 2007,
Finland accounted for 10% of world exports of wood and paper products, printing
paper for its segment in world exports was 20%. Among the leading sectors of
the Finnish economy are an information and telecommunications, metallurgical,
energy, business services, health care, engineering, food processing,
construction.we consider the social aspect, it is important to note the high
educational level of the population in Finland, which in turn has a positive
impact on the speed of learning innovation and ensuring the overall
competitiveness of the state. The strong 2.2
Assessment of the potential company seeking to expand its operations
an any other market, fertilizer market has a
segment division. In composition, fertilizers are divided into the following
categories:
· Mineral
· Organic
· Organic and
mineral
· Bacterial
fertilizers.
For «Phart» company the market segment
is organic fertilizer.
«Branded» organic fertilizers
characterized by low degree of consolidation, low volume (turnover less than
200 million euro in Russia in 2008), a growing market and is primarily a
«business-to-consumer» — small package. Market entry requires
significant marketing efforts. This is a regional niche market, but can be
considered delivery to other regions / countries in a relatively small scale.
the Russian market of organic fertilizers growth opportunity could increase
significantly. In this area there are no large companies today. Only 7.5% are
organic fertilizers that are made to fertilize the soil in the vast Russian.
Thanks to the marketing survey, and then further analyzed the fertilizer market
was found to be virtually no competition. None of manufacturers of organic
fertilizers does not seek to consolidate; manufacturers prefer to work
exclusively in their niche. All this is due to the very low volume of
production of such fertilizers and even a small fraction of the total
production of fertilizers in the other species.usual in Russia companies
operating in this segment focus on holders vegetables and flowers gardens. As
usual, big agricultural farmers prefer mineral and organic and mineral fertilizer.»Phart»
focus group is holders vegetables and flowers gardens, as professional and not.
A good developed product rang afford to cover a big sorts of flowers, fruits
and vegetables. Also, in addition the company produces special protections for
plants, what also has division due to kind of plant.fertilizer consumption per
unit area
fertilizer market in Russia shows signs of
recovery after more than 15 years of decline. However, the market volume in the
Leningrad region is small, so it is needed to organize sales in other regions /
countries and make serious marketing efforts in this direction., entering
Finnish market must help to expand sales market. The focus group will be the
same, but the product range will have more accent on fertilizer and protection
for flowers than for vegetables, as first one are more spread among local
people.about promotion and attraction costumers, the company presents
production as high quality, ecological, not only save, but healthy for
environment.company takes part in many competitions as local and international
and have certificates as a winner, for example, «Phart» is awarded
with Gold quality «Russian Brand», «GOLDEN AWARD FOR TECHNOLOGY
AND QUALITY new millennium award» (Switzerland, Geneva, 2004), The
American Golden Certificate of Quality. , the company has a certified testing
laboratory, which is equipped with modern equipment and controls the entire
production process cycle for a particular program — from incoming inspection of
raw materials and ingredients, manufacturing process control, before the
release of the finished product. The staff of the laboratory has extensive
experience of research work in the peat industry. The program of laboratory
testing includes a complete quality control more than 60 kinds of products,
performed more than 400 tests per month. Held constant research of soil and
fertilizer on the market, allowing company to analyze competitors’ products and
make improvements to their own., to attract clients, company must make its
product available. For this, it is needed to present product on shelves of big
supermarket in department for garden as well as in specialize stores.
2.3
Absolute and comparative advantages of entering Finnish market
In the course of marketing research «Russian
market of organic fertilizers: results of 2011, forecast for 2012-2013.»
Conducted by NeoAnalytics revealed that the main importers of organic
fertilizers in the years 2007 and 2010 is Germany.in 2010, the import of organic
fertilizers was 96 tons; in value terms, imports of organic fertilizers totaled
392.2 thousand dollars, which is 8.1 times more than in 2009.of organic
fertilizers in 2010 was 552 tons (4810.2 million dollars). In real terms,
export growth was 17.4% and 97.3% in value compared to the previous year. Since
2005, there has been growth in the export of organic fertilizers (except for
2007). Growth in exports shows the popularity of using organic fertilizer as
the most environmental friendly.currently exports organic fertilizer mainly to
the countries of the CIS. The main export in 2010 — was to countries as
Uzbekistan, Kazakhstan, Turkmenistan, which accounted for 77% of total exports
of organic fertilizers. Also, organic fertilizers are exported to Ukraine,
Kirghiz, India, etc.the short-term export potential of organic fertilizer
market will also grow. It will be promoted environmental degradation of the
land in the world, as soil degradation, desertification, increasing the salt
level of agricultural land. Even now a high demand for organic fertilizers in
countries with arid climate (Central Asia, the Middle East, Persian Gulf,
etc.).about «Phart» company advantages, penetration of Finnish market
opens a new sales market, what will be a push company to continue to grow. As
was told earlier, Russian market just on its way of developing, beginning
stable and in some regions even creation. Now, expanding new market, especially
Finnish, where the costumer’s playability is high afford company to grow,
increase financial potential and fixed assets, what in future afford company to
react on changes in domestic market and have enough recourse to increase
production with domestic market growth., absolute advantages for
«Phart» are conditions for large-scale production, as well as its own
laboratory for quality control and product development improvements.competitive
advantages are difference in the standards of living and in comparison with
Finland lower level of living minimum and a level of salaries as well afford
produce more cheaper production.
2.4
Analyses of risks due to entering Finnish market
Political environment
Risks
decreases
profit on. %
Weight
%*weight
Political
environment
Form of
government
0
0
0
Political
stability
0
0
Foreign policy
10
0,1
1
State companies
10
0,1
1
Role of
military
5
0,2
1
Level of
terrorism
0
0
0
Restrictions on
import
20
0,5
4
Total
7
is democratic country and was one of the first
countries equalized the rights of women and men, clearness of election afford
to avoid political instability. Of cause, as many countries Finland has sectors
of economy closed for foreign investors, but in general it is transparency and
open. Also, there are some barriers on import, but most of them were created as
a control system to provide a acceptable quality of import production.
Economic environment
Risks
decreases
profit on. %
Weight
%*weight
Economic
environment
Economic system
10
0,2
2
Stage of
development
10
0,4
4
Ecomomic
stability
10
0,2
2
GNP
0
0
0
International
financial standing
10
0,1
1
Monetary policy
15
0,1
1,5
Foreign
investment
0
0
0
Total
10,5
economy is stable, but in difference from Asia
developing economies, the volume of growth is not so high. Economic environment
risks are not high, with exception of those fact, that Finland is involved in
Euro zone and is under the negative influence of its instability and has to
take part in solving financial questions of problematic countries.
environment
Risks
decreases
profit on. %
Weight
%*weight
Regulatory
Environment
Legal system
5
0,3
1,5
0
0
0
Protectionist
laws
5
0,2
1
Tax laws
Appropriability
15
0,5
7,5
Role of
contracts
0
0
0
Protection for
proprietary property
0
0
0
Total
9
this sphere, in my opinion, just very high level
of taxes could be weighty problem for company to face with. Finland has one of
heights taxes in the world, for example income tax 10-48% depending on salary.
Technological environment
Risks
decreases profit
on. %
Weight
%*weight
Technological
Environment
Level of
technology
1
0,1
0,1
Availability
of local technical skills
5
0,2
1
Technical
requirements of country
0
0
0
Transfer of
technology
2
0,5
1
Infrastructure
0
0
0
Environmental
protection
5
0,2
1
Total
2,1
is high developed, post-industrial country, where
share of services is about 60-65% and technological risks are minimum as well.
Risks
decreases
profit on. %
Weight
%*weight
Political
environment
7
0,2
1,4
Economic
environment
10,5
0,3
3,15
Regulatory
Environment
9
0,3
Technological
Environment
2,1
0,2
0,42
Total
7,67
, from risks analyses «Phart» has a high-tech production
facilities, including only one in Russia fully automated line (the Netherlands)
on the packing of soil from 20 to 80 liters up to 600 packages per hour,
automatic lines (Denmark) for the production of kits for growing seedlings,
automatic lines on the packing of soil capacity from 2 to 10 liters capacity of
1,500 bags per hour, the plot on the packing of bulk products and granular
fertilizers on high-weigher automatic bottling line of liquid fertilizers. The company
has developed logistics structure. Warehouse complex with private access roads
allows loading and unloading of 12 carriage and four cars at the same time.
company produces more than 70 kinds of fertilizers, soils and plant protection
products, manufactured on the basis of biohumus, which is a natural organic
substance that stimulates the growth and harmonious development of the
plant.»Phart» is a market leader in natural organic fertilizer, its
products are available in most stores in Russia and the CIS countries.main way
of marketing products are wholesale. The company always tries to find an
individual approach to its wholesale customers, depending on their
specialization, size and requests. Serious attention is paid to the development
of the branch Network, enabling ease the process of working with regional
wholesalers. Representative offices are in five cities: Moscow, Perm,
Novosibirsk, Krasnodar, Ulyanovsk. In all major cities there are large
wholesale partners that have established long-term relationships. In addition,
a special section deals with the development of sales in the near and far
abroad.managementthe research center specialists are involved of the
agricultural sector as well as the establishment of partnerships with
scientists from agricultural institutions for staff development and expansion
of the spectrum of research.work in automated lines as career advancement will
be involved more low-skilled workers from the manufacturing stage after
succefull completing the education course.on the production work can be
attracted college graduates, as well as providing students with a changing
schedule.
Chapter
3. The business plan of the penetration Finnish market
3.1
Production description
Benefits of vermicompost and peat:
· Vermicompost
manure and compost exceeds the content of humus in the 4-8 times
· The presence
of growth hormones, development, multivitamins
· Large water
capacity
· Increases the
yield by 30-40%100% natural fertilizer
It does not contain pathogenic organismssoils are
made of a mixture of peat with the addition of high-quality natural structuring
components of complex mineral fertilizers and natural growth promoters — humic
substances.soils are divided on 3 groups, but on Finnish market just 2 kinds
will be sold: soils for gardens and for houseplants. Each group has around
18-21 sorts depending on plant it will be used for. The package volume is 5
litters, expiration date — 3years., fertilizers that contain a complete set of
essential nutrients, trace elements and growth stimulants, special complexes
useful natural soil organisms. Fertilizers have the same division as and soil.
The package volume for dry fertilizer — 2,4, 10 litters, for liquid — 0,25 and
0,5 litter. Expiration date is 3 years.
3.2
The production plan
Market prospects of organic farming:
· In the EU, the
number of organic farms in the past 15 years has increased more than 20 times.
· The global
market for organic products is estimated in 2011 at U. S. $ 39-41 billion
The main consumers of vermicompost:
· landscape
companies and nurseries
· trading
networks
· farmers
· small
wholesale
Manufacturing plan for export to Finland for the
first year
· 70 tones of
soils
· 20 tones dry
fertilizer
· 10 tons liquid
fertilizer
Sources of financing — own funds.for the overall
strategy, all actions related to the company’s growth strategy. There are three
types of strategies: the strategy of concentrated growth strategy and
integrated growth strategy and diversified growth strategy. «Phart»
concentrated growth strategy is the most suitable one. According this market
development strategy of seeking new markets for the product is already
manufactured is implemented. Here we have domestic market, product range is
created and the company just needs new sales markets for expanding.about
competitive strategy on the domestic market, as «Phart is a leader company
so strategies for leader are needed. The first one is based on activities that
make potential competitors’ attacks impossible or significantly weaken them, such
as anticipating the emergence of a new competitor in the market, the company
can lower the price on its products. And the second strategy is based on
expanding new sales market to increase company’s size, fixed assets,
strengthening the image and brand. And as the result the potential significance
of the leader makes attacks from competitors unpromising.the expanding strategy
I think the most suitable is unlike its competitors, a significant expansion of
modifications of the product and at the same time sharp expansion the price
range. Here the company will focus on a narrow specialization of their soils
and fertilizers for the different species of plants, meanwhile offering a
series of universal ones.strategies reflect both general and competitive strategies
can be implemented.
· Opting for
wholesale (contracts for the supply of large wholesalers)
· Conducting
laboratory tests on their own
· Own
production, to be a production company
· The
innovations implementation
· Automated
production
· Electronic
document
· Staff
Development Strategy
· Closing the
company to outside investors
· Focus on the
capitalization
Conclusion
The description of company showed its possibility
to do international business company already has had foreign sales markets and
shows stable growth. The second chapter shows us that Finland is attractive
country for penetration, risks were found as minimum.focus group and production
were determined. According these, manufacturing plan and strategic were
developed.about recommendation, I think that «Phart» should invest
into wholesales partnership development, it could be a discount depending on
the volume of purchases, as well as installment benefits, but for company the
best way is to attract.
Resources
1. HTTP://rusnk.ru/news/housing/foreign/#5
2. <HTTP://www.phart.ru/about/history/>
.
4. Human
Development Reports (режим доступа HTTP://hdr. undp.org/en/statistics/)
5. http://megaresearch.ru/files/demo_file/10235.
pdf <HTTP://megaresearch.ru/files/demo_file/10235.pdf>
6. Внесение минеральных
и органических удобрений. HTTP://www.unece.org/fileadmin/DAM/stats/documents/ece/ces/ge.33/2009/zip.29.
r. pdf
. РБК. исследование
рынков. http://marketing. rbc.ru/news_research/15/11/2012/562949985141082.
shtml
<HTTP://marketing.rbc.ru/news_research/15/11/2012/562949985141082.shtml>
8. HTTP://megaresearch.ru/files/demo_file/10235.
pdf
