FINAL PROJECT
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ENEB Business School
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BACKGROUND
The company "Señorío de Begué", originally from the province of Jaén (Spain),
is dedicated to the sale and distribution of olive oil. For the next year, it intends
to export its products outside of Spain.
Señorío de Begué (fictitious company), has a high quality product, very
prestigious and well known in Spain, as well as a good structure of production
and sale for national trade.
Although sales continue to increase in Spain, they have decided to make the
leap to the international market to continue this line of growth.
The company needs someone to take charge of this important new phase for
Señorío de Begué. In this case, you will be the chosen one to carry out the task.
DEVELOP
1. In the first place, you will have to carry out a study of the product and the sector
in Spain, as well as its compition.
The USA of Spain is the world leader in the manufacturing of Olive oil. In 2018
Spain produced 1.24 million metric tonnes of olive oil out of the whole world
production of 3.26 million metric tonnes, which equates to roughly 38% of the
world supply. As some distance as the production of olives is concerned, Spain
produces over half of the world’s supply.
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Vergin Olive Oli Production 2018/2019
Country Production (Tonnes)
Spain 1,789,900
Morocco 200,000
Turkey 193,500
Greece 185,000
Italy 173,600
Tunisia 140,000
Protugal 100,300
Syria 100,000
World 3,217,500
In the province of Jaen in Spain the place our Fictitious olive oil producing
employer is situated, we research that Jaen province is responsible for over
20% of the world furnish of olive oil, which in fact is extra than Italy’s production.
Jaen province produces about 50% of the complete olive oil in Spain. Our oil is
offered in greater than a hundred and eighty nations all through the world.
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If we compare the consumption of olive oil bump off by using Greece at 20 litres
per annum to the consumption in the USA at 1.1 litres, there seems to be a
terrific difference in average usage however take into account that even with
Greek eating 20 litres of olive oil a yr they solely devour about 7% of the world
production, compared to the U.S.A. where even with the consumption of 1.1
litres a 12 months the Americans use 9% of the world’s production.
Some of the frequent classifications of Olive oil are listed under and the price, of
the product is dependant on the grade of oil being purchased:
Extra Virgin Olive Oil: Extra Virgin is the easiest grade of olive oil, reachable in
both typical and organic varieties. First, the olives are harvested and washed
with cold water. They are ground into a paste and spun in a centrifuge to extract
this initial, high-quality oil. Typically, this technique takes place within 24 hours
of picking the olives from the trees. By definition, EVOO is known as the “first,
cold-press”, even though it’s truly spun incentrifugal machines as a substitute of
being pressed. It is technically an olive fruit juice due to the fact it’s honestly the
liquid extracted from the fruit of the olive.
Virgin Olive Oil: Virgin Olive Oil is processed in a similar way to Extra Virgin
Olive Oil.
The issue that differentiates Virgin and Extra Virgin is the acidity level after
pressing: Virgin Olive Oil has a max acidity level of 2.0% while Extra Virgin
Olive Oil should be below 0.08% acidity. The distinction in acidity stage is
induced by the olives themselves and the time prolong between harvest and
production. After the olives are harvested whenthey’re waiting for pressing, the
fruit continues to be affected by the environment. For example, some olives
may also continue to be in the field longer, some may also be slightly riper or
havemore sun exposure. Each of these herbal elements motives them to
oxidize faster, which will increase the acidity level. Lampante Virgin Olive Oil is
a lesser grade of Virgin Olive Oil now not healthy for human consumption.
Often, this oil is made from very overripe or badolives, and is used for lamp oil
or makes use of different than food. It is now not a common grade on hand in
the U.S.
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Refined Olive Oil: Refined Olive Oil is Virgin Olive Oil that has been processed
and subtle to create a mild, mild tasting, and more secure oil. The refining
technique additionally removes many of the fitness advantages that Extra Virgin
Olive Oil offers, even though this is debated.
Olive Oil (Pure Olive Oil): Defined through the USDA, the grade “Olive Oil” is
commonly referred to as “Pure Olive Oil” in the U.S. bulk and retail markets. By
definition, this grade is comprised of Refined Olive Oil combined with Extra
Virgin or Virgin Olive Oil; frequent combination ratios are 85% Refined and 15%
EVOO or Virgin, although they can rangefrom 70/30 to 99/1. These ratios are
decided by means of the supplier/ manufacturer and can account for some of
the price differences in Pure Olive Oil across the market. This oil has a milder
style and coloration than Extra Virgin or Virgin Olive Oil.
Olive Pomace Oil: Olive Pomace Oil is an oil that is extracted from the pomace
of the olive. “Pomace” is pulp made from the olive pit and already squeezed
olive fruit. When an olive is picked, it is floor into a paste which is squeezed or
spun to get the initial oilout. The dry pulp leftover is known as the olive pomace.
A solvent (typically hexane) is delivered to the pomace to extract any last oil.
The solvent is removed, and the ultimate Olive Pomace Oil is refined. This is a
similar procedure used to manufacture seed oils like Soybean and Canola.
Blends: Soybean / Canola Oil and Olive Oil: Olive Oil can be blended with
Canola or Soybean to create a blended oil that is decrease in value and has a
milder taste. These blends can be made in any ratio, with any grade of olive oil.
The most frequent ratios are 75/25, 85/15, and 95/5. Depending on your market
and your necessities you can pick out whatever profile/ratio primarily based on
taste, price or preference.
Most of the agricultural products in the world are offered and sold in the
commodities market and the price fluctuates pretty rapidly relying on the crop
yield, first-class of the harvest, a surplus of product or shortage of product
dictates what the fee would be in the wholesale market and conversely what the
give up purchaser will pay for their purchases
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The pricing of distinct grades of olive oil is based upon the present day market
price as of Nov. 27, 2020, and will fluctuate based totally upon the provide and
needs of the market. The price is broken down to charge per litre and stated in
U.S dollars, the most frequent currency used for global trade. The natural
greater virgin oil ( OEVO ) sells for roughly $ 5.60/litre and Pure virgin oil sells
for $2.04/litre.
We will seem at the opposition in the olive oil commercial enterprise by using
doing an analysis the usage of Porter’s 5 forces: competitive rivalry, energy of
suppliers, electricity of buyers, hazard of new entrants in the marketplace, threat
of product displacement or [Link] RIVALRY: There is a lot
of competition domestically as well as from other olive oil producing companies.
Spanish olive oil is primarily bought in bulk to different countries, especially
Italy, the place it is bottled and offered as Italian Olive oil.
POWER OF SUPPLIERS: There are very few big producers and small
producers undercut every other's costs to attain market share. There is a lack of
cohesive force between the small producers who can team collectively and
market their wares for a better price.
POWER OF BUYERS: The give up patron has a lot of energy as they figure out
which specific product to purchase from their retailer. The outlets on the other
hand who are our shoppers have superb strength because the retailers manage
the market and figure out what product will be displayed on their shelves so that
the give up purchaser can purchase the oil. These giant outlets and retail chains
buy the oil in bulk and package deal it beneath their personal company names
or house brands, therefore the farmers and distributors are shut-out of the
market.
THREAT OF SUBSTITUTION: There is an massive risk from substitute
products such as canola, rapeseed, soybean, corn, and the most recent craze
in the market, coconut oil, plus animal fat products such as butter and ghee. All
these substitute merchandise are cheaper than olive oil. Despite these
alternative products available, humans are nevertheless gravitating in the
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direction of olive [Link]”In the United States, the FDA allows producers of olive
oil to location the following certified health declare on product labels
Limited and not conclusive scientific evidence suggests that ingesting about two
tbsp. (23 g) of olive oil every day may also limit the danger of coronary heart
ailment due to the monounsaturated fat in olive oil. To acquire this feasible
benefit, olive oil is to substitute a comparable quantity of saturated fat and not
enlarge the common range of energy ate up in a day.”6 These fitness claims
have helped with the consumption of olive oil.
THREAT OF NEW ENTRANTS: There is a very high probability of new entrants
commonly supermarket chains and massive conglomerates from buying bulk
products from farmers and suppliers and packaging and advertising these
merchandise for a healthful earnings [Link] Spain is in a right role to
sell its olive oil as compared to the different olive oil-producing countries of the
world. One aspect Spain has to do is market Spanish olive oil overseas so that
when people see “ Product Of Spain” it is synonymous with a amazing product,
the same way we accomplice it with Italian Olive oil.
2. Choose 3 countries to export and analyze the external situation in each one of
them. The countries should be:
- One of Europe.
- One from Latin America
- One from Southeast Asia.
We would have to get assist from the ASOLIVA ( Spanish Olive Oil and Pomace
Olive Oil Exporters Association ) in exporting our products to the above-named
countries.
BRAZIL: I have chosen Brazil as my desire of u . s . a . from Latin America as it
is the most populous united states of america in the area with a populace that
tops at over 210 million. “Brazil is rapidly getting shut to 104 million humans in
the center class, which corresponds to fifty three p.c of the complete of 194
million inhabitants (estimated for December 2012). Thus, if the Brazilian middle-
class were an independentcountry, it would have the twelfth biggest populace in
the world.”7The OEC file tells us that in 2018 Brazil imported $837K of olive oil
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and Spanish olive oil imports had been at the top with a figure of $437K. That
capability that 52% of the market used to be dominated via olive oil originating
in Spain.
We at Senorio de Bergue have a wonderful benefit in increasing the Brazilian
olive oil market and gaining a larger market share as the Brazilian middle
classification population is rising and consumption is sure to expand as
thepopulation equates olive oil as being a healthier alternative to butter and
different oils handy in the market.
Importation of merchandise in Brazil requires: a) that we get an import licence
that we can practice for or use the custom brokers licence who will be clearing
our goods. b) Have an International Sanitary Certificate to denote that our
product is free of any ailment or pest. c) Product labelled in accordance to
neighborhood legal guidelines such as weight, date of manufacture, expiry date,
us of a of foundation and be in Portuguese language. d) Custom clearance of
the imported goods, where the customs officers take a look at the physical
goods in opposition to the waybill and custom documentation denoting the class
of product being imported. e) Payment of import obligations and taxes. There
are three distinctive taxes i) importtax calculated on CIF
( Cost+insurance+freight) ii) Industrialized Product Tax ( IPI) iii) Merchandise
and service circulation tax ( ICMS)9 f) transportation from seaport or airport to a
storage facility, both our warehouse or distributor’s warehouse.
The Brazilian market is quite fragmented, therefore we would want to appoint a
distributor who can warehouse and market our [Link] Brazil used to be
a Portuguese territory from the 16th-19th century, there is a sturdy Portuguese
have an effect on which bills for Portugal importing the majority of olive oil fed
on in Brazil. We will have to enlarge our market share by using having a sturdy
income and marketing team to market our products that exceed in first-class
compared to the Portuguese brands. We can outshine our competition through
advertising our products to the more state-of-the-art and affluent purchasers
who save at local markets and gourmet stores.
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MALAYSIA: My desire for a u . s . in Southeast Asia is Malaysia. Please word
that I supposed to select both India or China as my choice of country but most
Geography maps and websites country that India is in South Asia, whilst China
is in East Asia. Both these countries exhibit super market workable for the
consumption of olive oil as these two most populous nations in the world debts
for over 35% of the world population. Both these nations have a rising center
class that quantities to over a billion people.
Malaysia has a population of over 32 million, which makes it the 43rd most
populous u . s . in the world. It has a GDP of over $10K however when
purchasing electricity parity ( PPP ) is calculated the GDP figure jumps to
$27,282 per [Link] imported the largest amount of olive oil from
Spain at 36% valued at $4.59m observed with the aid of Italy that has a 31%
market share in olive [Link] ¾ of the olive oil imported was once Virgin olive
oil category 150910 that totalled $9.17m, while the relaxation was once olive oil
category 150990, valued at $3.33m. The imports of olive oil have accelerated
3x ( threefold ) over the last12 years and are increasing each and every
[Link] purpose at Senorio de Begue is to seize a larger market share in an
expanding market by being at the very forefront in the thinking of the
consumers; a company that consumers ask for through name.
GERMANY: This was once a very tough desire to make however I selected
Germany forthe following reasons: “Germany is a incredible electricity with a
sturdy economy; it has the largest economic system in Europe, the world's
fourth-largest financial system via nominal GDP, and the fifth-largest by way of
PPP. As a world chief in various industrial and technological sectors, it is both
the world's third-largest exporter and importer of goods. A incredibly developed
country with a very excessive fashionable of living.
Germany’s consumption of olive oil is excessive and secure while the
consumption figures in the relaxation of the EU are declining. Germans devour
the greatest amount of olive oil in Northern European nations after France and
U.K. Most of the olive oil bump off in Germany is Virgin Olive oil and there is a
precise probability in selling organic olive oil as well. German imports of olive oil
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have grown with the aid of 3% annually by using quantity and 6% by means of
value. Germany does not produce any olive oil. The biggest olive oil importing
usa to Germany is Italy, which has captured almost 75% of the market share.
3. Conduct a market study of each of these three countries regarding the oil
market. Find out what would be the product distribution in the country, taking
into account issues such as documents, agents, tariffs, etc.
These are the labelling necessities for Germany and as a be counted of reality
formost of the EU. Article 5 of Regulation (EU) No. 29/2012.
■ List of ingredients.
■ Quantity/categories of ingredients.
■ Net quantity.
■ Date: minimum durability.
■ Special storage/usage conditions.
■ Declaration of allergenic substances.
■ Business title and address.
■ Instructions of usage.
The documentation required for importing into Germany and the relaxation of
the EU is as follows:
■ Certificate of Analysis .
■ Technical Data Sheet (TDS)
■ Material Safety Data Sheet (MSDS)
■ Certificate of Origin (natural vs. synthetic, nearby vs. imported and
naturalized)
■ Allergens announcement
■ CMR announcement (non-Carcinogenic, Mutagenic, or Toxic for reproduction)
■ Declaration: free from BSE (Bovine Spongiform Encephalopathy)/TSE
(Transmissible Spong-form Encephalopathy) contaminants
■ Gluten-free declaration
■ Heavy metals statement
■ Non nanoparticles assertion
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■ Other certificates, such as organic and Fair Trade (if applicable)
4. From the study carried out, detail the advantages and disadvantages that each
of the countries has when marketing the product.
If you had to choose one of these countries to start the adventure towards
foreign trade, which would it be? Explain your answer.
ADVANTAGES AND DISADVANTAGES:
Germany Advantages:
● Largest country in the EU with the strongest economy.
● 4th greatest economic system in the world
● Highest income levels
● More prosperous and middle-class clientele
● Part of EU trading block- makes it less difficult to import
● Market for olive oil increasing
● Close to Spain, therefore transportation is quick and cheap.
Germany Disadvantages:
● No massive chain of hypermarkets
● Discounters such as Aldi and Lidl manage over 66% of the olive oil sales.
● Numerous fitness and welfare labelling and regulatory hurdles
● Traceability of product● Origin of product
Brazil Advantages:
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● Spanish olive oil in #2 in the market
● Large middle-class and rising
● People are experimenting and buying greater upscale merchandise
Brazil Disadvantages:
● Corruption
● Cumbersome import requirements
● Have to have distributor to market your products, therefore income margin will
be lower
● Transportation prices higher
● Distribution network is fragmented
● Trade limitations for Spanish olive oil
Malaysia Advantages:
● High GDP
● Spanish olive oil has 36% of the market share
● Market is concentrated in urban centres, consequently effortless to market
and distribute product
● Hyper-markets are rampant therefore convenient to market
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Malaysia Disadvantages:
● Volume of sales is very low
● Transportation fee to Malaysia are high
● Transportation time will be substantial
● Quality of Olive oil should degrade in the long ride on a sea container, until its
temperature-controlled, equating to even higher value
If I had been to select one of the countries, I would truely select Germany
because the advantages that are outlined above some distance outweigh the
negative, the disadvantages. Germany is a massive us of a with incredible
workable and with a fantastic advertising and sales plan that manufacturers our
merchandise in fascinating packaging such as glass bottles with built-in tap or
Bag-in-a-box ( BiB ) we can capture a large share of the market. Some of the
reasons for selecting Germany are as follows :
● Largest country in the EU with the strongest economy
● Highest income levels
● More prosperous and middle-class clientele
● Part of EU trading block- makes it easier to import
● Market for olive oil increasing
● Close to Spain, consequently transportation is speedy and cheap.
●4th greatest economy in the world
●Our share of the market can solely increase as Italian products have come
beneath acloud of suspicion due to the fraudulent marketing of overseas oils as
Italian.
●No change boundaries exist
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●Great manageable for natural and infused olive oilTaking all these elements
into consideration, and from what we have realized in our MBA software via
ENEB, my choice is Germany.
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REFERENCES :
Works Cited
Aparecida da Silva Alves,
Anderson; “Countryside
Middle Class Growth in
Brazil and Its
Impacts on Domestic
Tourism.” Via . Tourism
Review, no. 7, July 2015,
[Link]/
viatourism/578,
[Link]
g/viatourism/578.
“Brazil - Import Tariffs |
[Link].”
[Link],
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[Link]/article?
id=Brazil-Import-Tariffs.
Broaddus, Hannah. “Who In
The World Consumes The
Most Olive Oil? Hint: It’s
Not the
US.”
[Link],
[Link]/blog/
who-in-the-world-consumes-
the-most-olive-oil.
“Home.” International Olive
Council,
[Link]
g/.
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“How to Import Goods in
Brazil Step by Step?”
Novatrade, 30 June 2016,
[Link]/
en/brazil-import-guide/how-
to-import-goods-in-brazil-
step-by-
step/.
“How to Import to Malaysia,
Step by Step Process.”
[Link],
[Link]/
How-to-import-to-Malaysia-
step-by-step-process--
[Link].
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“Malaysia | Imports and
Exports | World | Olive Oil |
Netweight (Kg); Quantity
and Value
REFERENCES :
Aparecida da Silva Alves, Anderson; “Countryside Middle Class Growth in
Brazil and Its
Impacts on Domestic Tourism.” Via . Tourism Review, no. 7, July 2015,
[Link]/viatourism/578,
[Link]
“Brazil - Import Tariffs | [Link].” [Link],
[Link]/article?id=Brazil-Import-Tariffs.
Broaddus, Hannah. “Who In The World Consumes The Most Olive Oil? Hint: It’s
Not the
US.” [Link], [Link]/blog/who-in-the-world-
consumes-
the-most-olive-oil.
“Home.” International Olive Council, [Link]/.
“How to Import Goods in Brazil Step by Step?” Novatrade, 30 June 2016,
[Link]/en/brazil-import-guide/how-to-import-goods-in-brazil-
step-by-
step/.
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“How to Import to Malaysia, Step by Step Process.” [Link],
[Link]/How-to-import-to-Malaysia-step-by-step-process--
[Link].
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