Introduction
International business comprises of all bilateral and multilateral business transactions carried out across national borders. The world pork industry boasts one of the largest consumer base globally. Canada had dominated the world pork industry until 2004, when the United States took over as the country with the largest consumer base (AlbertaPork Industry Report 1).
Aim
The main aim of this research paper is to evaluate issues in international business with respect to the dwindling Albertan pork industry, an improved competitor market performance, and their indirect increased control of local market through increased imports by citizens.
Scope
The research paper explores international business in view of the international issues at play with respect to the pork industry. In this case, Canada, the former global leader in the world pork industry shall be examined. In addition, focus shall also be on the United States as the current market leader in the pork industry. The success of Danish producer’s in the pork industry shall also be examined, even as other countries appear to have been characterized by declining production. Borrowing from the Danish system, the focus shall be on the factors of production abundantly available to the Canadians. In addition, the drive behind American’s rise to the leaders in the pork industry will also be examined, along with the possible solutions to the issue and their attemptability.
International Issues
It is not clear why the exports by Canadians are declining whilst the imports from the US are increasing. Nonetheless, the likelihood of dumping cannot be ignored. Dumping may arise due to the presence of economies of scale enjoyed by the American producers which result in an ultimate low selling price both at the local and international market. Export subsidies often make a country’s products cheaper to importers than is the case in the local market. Its application as a policy for example, to promote exports may drive some players out of the market. Introduction of the EU export subsidies has compounded the Canadian crisis.
Danish Pork Producers’ Successes
The Danish success is attributable to diversification and expansion of their production base. A review of the Danish Crown’s profile reveals that in addition to its high adaptability, it has expanded its market throughout the world compared to Canadian firms that are more focused on a stagnant local market (Danish Exporters para. 3).
Using the Danish Crown company as the basis, it is clear that producers have automated processes and engaged in cost reducing and efficiency increasing practices ( for example, mergers between very small producers to form large firms with larger capacities), and acquisitions in areas with low operational costs. In order to keep track of the market and maintain growth, the Danish Crown engages in strategic planning. This is revealed by the realization and acclamation by the management of the need to remain afloat, maintain their market share and their consumer base.
Can Alberta producers reproduce the Danish Success’?
The basis of production is the creative integration of factors. First, diversification and expansion of production requires investment of more resources in a creative and innovative manner. This may require looking for new markets beyond borders. A firm’s adaptation to outside forces is policy based.
Processes such as integration of small firms in order to take advantage of the economies of large scale operations and buy-outs by large firms can be government-instituted. Once a firm attains a given threshold, it will be in a position to produce efficiently for both local and international markets. In this way it will be in a position to utilize opportunities in external markets Strategic planning is initiated by the management. There is no doubt therefore, that the not only can the Danish success be reproduced in Canada but it can also be exceeded by the former world no one.
Abundant Factors
Canada has several factors of production in abundance that aided in its role as a world’s number one pork exporter. Possession of the basic factor of production, land coupled with large supplies of grain gives Canada a cutting edge over competitors. Land limits the scales of production for Americans in comparison with Canadians
Human skills are vital to the success of any process. Canadian’s human skills endowment interprets to an ability to achieve fast results with high degrees of precision. These human skills have enabled the development of good infrastructure necessary for trade. Canada’s reputation for its quality pork is a fruit of the apt workforce.
American firms damaging our producers: How and Why?
Presence of well organized production systems in the USA has lead to reduced costs of production and ultimate low product costs. Since most firms in USA are double shifted it is much harder for Canadian firms to pace up and consequently, they exit business. In an attempt to expand its overall market amid stagnancy in the local market, the USA pork producers use all means, for example, improving efficiency to lower costs and remain relevant.
Conclusion
Canadians firms require reforms as opposed to complaints of unfair practices. Proposed government subsidies can also come in handy.
Recommendation
The most viable option is to restructure all firms in order to increase efficiency, lower production costs, prices, and make the products competitive in local and international markets. Restructuring should focus more on mergers and acquisitions in order to attain goals laid above. This is feasible enough owing to the high quality associated with Canadian products.
Works Cited
AlbertaPork Industry Report. Global pork production: meeting the challenge in a changing world. 3.1 (2006): 1-4.
Danish Exporters. Danish Crown, n.d. Web.