International business strategies
Mavis Bank Coffee Factory Limited (MBC) processes and selects premium quality coffee beans from Blue Mountain and labels them as certified Blue Mountain Coffee. Mavis Bank Coffee Factory uses home replication strategy to markets its products globally. MBC Ltd features its product with originality therefore nothing should be changed in terms of production and localization (in this case, Americanization). In this strategy international business acts as a brand that no other place can replicate. People like MBC Ltd products just the way the way they are and wouldn’t want them modified any other way. The products were initially designed for the domestic customer; it then turned out to be a famous and luxurious commodity people from all over the world enjoy. In this strategy international business is a separate form and comes second to its domestic market.
In the US, Mavis Bank coffee is marketed by independent distributors, retailers and wholesalers who buy coffee directly from them. These entrepreneurs are mostly US individual citizens or companies who operate independently and therefore, have no motivation to share knowledge and experience with the Mavis Bank managers. These include Jablue Pacific, a whole sale and trading business based in Oregon and deals with coffee and wine; J. Martinez & Company traders in coffee; KMD Distribution Company distributors/wholesalers deals with coffee, cocoa, dairy products, and ginger; Coffee Pacifica, Inc, a worldwide distributor and marketer based in Berkeley, California; and Blue Mountain Coffee Inc. trademark under sole licensing agreement with the Coffee Board allows it to trade Blue Mountain coffee products in North America (Verbeke, 2009).
Advantages of using Home replication strategy
There is minimal pressure on the MBC’s managers as international business is independent from the home country one. Secondly, it is an easy option as managers in MBC Ltd do not have to have experience in international business as most of the tasks fall on foreign distributors, franchisees, licensees etc. lastly, the distributors in each country can package or do value addition in regard to their country’s tastes and preferences.
Disadvantages of using Home replication strategy
The foreign distributors may have different vision, culture and processes from those of the MBC Ltd. There is also no room for sharing of information between the MBC managers and the foreign players which may lead to duplication of activities and diseconomies of scale. This lack of sharing of information reduces chances of developing knowledge based competitive advantage for MBC’s coffee brands.
Competitive advantage of MBC Ltd
Competitive advantage in international business can be described in terms of internal potential and external relationships a firm has. This guides the firm in adopting a certain entry mode and international strategy (ies) (Jyotsan, 2002).
Mavis Bank Coffee Ltd has designed its coffee products, both Green and roasted and its operations to become and remain a unique coffee producer in the Central American region and global market under the Jablum label and M.B.C.F trademark which gurantees 100% Jamaican Blue Mountain coffee. Unique coffee quality and taste enabled by the region’s geographic and climatic conditions that combine to produce coffee not produced anywhere else in the world. By producing coffee that is unique in quality and taste, it is difficult for competitors to imitate their products especially the green coffee. Shipping of the company’s coffee is by the famous and unique wooden barrels and the special 60 Kg vacuum bags for roasted coffee. MBC Ltd has also differentiated its products by finding and dominating a niche in the US market.
Mavis Bank Coffee uses the focus advantage in adopting its international business strategy. This way, MBC becomes part of the ever complex coffee industry. The company uses this strategy with its suppliers of coffee in the blue mountain parishes for them to produce quality coffee and competitors in US market such as the Blue Mountain Cooperative Society. This way the company shares information, skills and technology with coffee industry competitors, suppliers and the farmers to enhance its competitiveness. A complex web of interdependences is formed. MBC Ltd, being the oldest, largest and most modern coffee processor in the region, has been able to maintain these interrelationships due to assets it possesses and the resources it exchanges with the partners.
Jyotsan, M. Competitive advantage and international business: examining path dependencies. Global Competitiveness Online, 2002. Web.
Verbeke, A. International Business strategy: Rethinking the Foundations of Global Corporate success. Cambridge University Press, 2009. Web.