Question

Which of the following would be the best entry strategy for an olive oil producer wanting to expand to the global market?

A) Exporting olive oil directly to international retailers and consumers.
B) Building a manufacturing facility in each target country.
C) Creating a joint venture with a local food production company in each market.
D) Keeping olive oil production entirely domestic.

Answer 1

The best entry strategy for an olive oil producer wanting to expand to the global market is likely exporting directly to international retailers and consumers due to lower costs and complexity. This method enables economies of scale and maintains competitive market presence without the immediate need for extensive capital investment.

Step-by-step explanation:

Expanding into the global market for an olive oil producer requires strategic planning to take full advantage of economies of scale and sustain long-term growth. A balance between efficient production and market competition is essential. International trade allows for larger factories that can provide lower production costs through economies of scale, while still offering consumer choice and fostering competition. Exporting directly to international retailers and consumers (option A) is often the most straightforward and least capital-intensive method for an olive oil producer to expand globally. This approach avoids the complexities and costs associated with building manufacturing facilities in each target country (option B) or establishing joint ventures (option C). Keeping production domestic (option D) may limit the potential for economies of scale and market reach. In the long term, producers can explore establishing facilities or partnerships as they gain more market penetration and stability.