International Strategy

Madagascar’s Implementation of the International Strategy in Trading Vanilla

Implementing an international strategy facilitates accessibility to a broader geographical market, hence enhancing its profitability. Madagascar’s vanilla farmers earned considerably high profits from exporting their produce to international markets such as Europe and the US (Zhu, 2018). Subsequently, the produce manifested into one of the most valuable commodities. At the same time, the international strategy allowed the farmers to bargain for higher prices for the product in areas where demand exceeded supply. Subsequently, the farmer negotiated for higher prices than those offered in the domestic market, hence enhancing its profitability.

On the flip side, vanilla produce’s limited availability adversely affected the farmers. The low supply of vanilla commodities caused the entities utilizing vanilla as the raw material to seek alternatives to lower the cost of production. They replaced the commodity with synthetic vanilla, which was low-cost, leading to a decline in demand for organic vanilla (Zhu, 2018). Subsequently, the demand for the produce considerably decreased, leading to a decline in prices that negatively affected the farmers who relied on the crop for their sustenance. International strategy incurs the company additional costs in the form of custom tax and duties and logistics costs that escalate the commodity’s cost; this contributed to the increase in prices that caused the buyers to seek an alternative to the product. Moreover, international strategy features compliance risk, whereby the product should comply with the standards and laws governing the sector (Zhu, 2018). The product was sometimes rejected because it failed to meet international quality standards. The farmers harvested the product before its maturity due to theft and the need for money, hence compromising quality. Thus, this strategy required that farmers deliver high-quality produce.

Is your assignment devastating you ? Get in touch with us at eminencepapers.com. Our homework help will save you tons of time and energy required for your assignment papers.

References

Zhu, A. (2018). Hot money, cold beer: Navigating the vanilla and rosewood export economies in northeastern Madagascar. American Ethnologist, 45(2), 253-267.

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

Question