INFLUENCE OF HOST COUNTRY ENVIRONMENTS ON

THE OPERATIONS OF NATIONAL FOOD LIMITED

Submitted by:
Muhammad Haqqani (46665)
Mubeen Ul Haq (46708)
Bilal Mansoor (47191)
Muhammad Uzaif Ansari (46981)
Abdul Rahim (49024)

Submitted to:
Tanzeel Raza (Tuesday 18:30-21:30)

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 ACKNOWLEDGMENTS

First, we heartedly like to thank Almighty Allah who has blessed us with the knowledge,
insight and opportunity to work on this report. I am thankful and grateful to my respected
teacher SIR TANZEEL RAZA for teaching us the concept of International Business. This
work would not be possible without his support and guidance and his versatile knowledge
and unique teaching style in the field of business has developed our knowledge and helped a
lot with the concepts of International business in Business world. And last but not the least
we would also like to thank all those people who gave us their valuable suggestion and
support.

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 TABLE OF CONTENT

EXECUTIVE SUMMARY.............................................................................................................. 4
INTRODUCTION ........................................................................................................................... 5
CORE VALUES .............................................................................................................................. 5
NATIONAL FOODS PRODUCT PORTFOLIO ........................................................................... 6
VALUE CHAIN MODEL ............................................................................................................... 7
GLOBAL RETAIL PRESENCE AND SUBSIDIARY CHART .................................................... 9
INTERNATIONAL DIVISION / OPERATIONS ........................................................................ 11
MARKET SEGMENTATION ...................................................................................................... 11
PESTLE ANALYSIS..................................................................................................................... 12
COMPETITORS IN AUSTRALIAN MARKET ......................................................................... 14
PORTERS DIAMOND MODEL .................................................................................................. 15
CONCLUSION.............................................................................................................................. 18
REFERENCES .............................................................................................................................. 19

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 EXECUTIVE SUMMARY

The purpose of this report is to understand the influence of host country environments on the
Operations of Multinational enterprise, in our case, we chose National food who initially
started out as a spice company in the 1970 and 3 decades later has diversified into a multi-
category food company of Pakistan with over 250 products in 10 categories operating with 4
plants where 3 are being in Karachi. Due to its global expansion and catering to international
market demands, National launched its subsidiaries in 4 countries to better facilitate and
understand consumer preferences by regional representatives. In this report, we have planned
to launch National foods in Australia as the demand for spices has substantially increased in
natives and more influx of south Asians consumers is present. In this innovative day and age,
people are compelled to alter their eating habits where taste of different cuisines have blended
together and offer consumer with a unique experience. Furthermore, we looked at Market
segmentations to target our products mainly recipe mixes to certain demographic in the right
geographical location keeping in mind the behavioural and psychographic factors to
understand the market better. On top of that, we further understood macro environment of
Australia to conduct business by the help of PESTLE analysis to better comprehend any
unwanted contingencies. Then discussing competitors helped us understand which company
products are known and frequently bought by locals and to apply Porters Diamond model to
get hang of Competitive advantage National product can attain. Finally, our recommendation
states their launch with a joint venture will prove successful and mitigate their risk of
investment.

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INTRODUCTION
National Foods Limited (NFL) was launched in 1970 with the spice’s product category.
Company`s revolution is their product should be clean and healthy food. NFL initiative in the
market was to make and provide hygienic food which reduces the spending time in kitchen. 6
Their concept was to make a more positive and rewarding lifestyle for people who cook. So,
they introduce different product spices, ketchup, sauces, salt, jams, recipe masala jars,
Deserts, pickles, Mayonnaise, and scene-on snacks.

Vision:
To be a Rs. 50 billion food company in the convenience food segment by launching products
and services in the domestic and international markets that enhance lifestyle and create value
for our customers through management excellence at all levels.

Mission:
Creating food that enriches the life of people everywhere.

CORE VALUES
Ownership:
 We lead by example We are responsible for all our actions and decisions
 We empower ourselves and take initiatives to meet business needs
 We own our growth and development
 We are responsible for the safety and well-being of ourselves and our community

Teamwork:

 We work collaboratively across organizational boundaries on common objectives

 We respect each other’s ideas and opinions
 We give constructive and candid feedback
 We share knowledge and experiences to help each other develop We celebrate the
wins together

Customer centric:
 We continuously seek to understand and identify customer needs
 We focus on providing convenience and value to our customers
 We listen to our customers and treat them with respect
 We are clear and transparent in our communication We consider all customer touch
points to offer the best possible solution

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NATIONAL FOODS PRODUCT PORTFOLIO
National Foods Limited (NFL) succeeded due to its ability to respond to the customer`s
changing needs. The technological advancement and innovative make NFL unique in the
industry with wide range of brands. NFL focuses on alternative for different household to
maintain kitchen habits of customers, now they can now easily cook healthy and delicious
food in limited amount of time by wasting by mixing other masalas. Just using one mix
recipe has been habitual in every household.
There are many products of NFL like masalas, salt, masala recipe, mayonnaise, and other are
mention below:

Recipe Masalas:
This masala recipe includes 48 delicious recipe
range such as biryani, Curries, barbeque items,
Kababs, and many more variety of recipe
masalas.

Ketchup:
NFL`s ketchup taste is a perfect balance of Tart and sweet.

Basic Masalas:
NFL also provide basic recipes masalas which are
convenience use in daily cooking.

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Jam:
NFL jams are fruitful jam’s jars with delicious fruit spreads and
happiness.

Salt:
NFL salt has been the brand leader salt in the market.

Mayonnaise:
This gives a thick and creamy texture that adds the right amount of flavour
and richness to sandwiches, burgers and rolls.

VALUE CHAIN MODEL

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  Firm Infrastructure: Main production unit in Port Qasim and Nooriabad, Pakistan.

 Human Resource Management: A variable pay is launched to reinforce true

performance. A new career ladder is designed and implemented to better prepare
ourselves.
 Technology Development: Implemented SAP integration for elimination of cash
handling system.

 Procurement: Installed a purchase requisition system to improve procurement process.

 Inbound Logistics: There is a proper team in National Foods which handle all the things
related to their raw material they are the one to make sure that raw material reaches the
12 company warehouse on time and there is also a team which deals with suppliers and
make sure that suppliers provides the company quality raw material.

 Operations: Have different warehouses and packaging unit for export only and have
different warehouses and packaging unit for domestic only.

 Outbound logistics: With new talent, available resources and support from management
their supply planning showed commitment towards improvement in the existing system
by implementing LAP tool in SAP.

 Marketing and Sales: Have a strong sales team. They run their advertisements on digital
platforms, they also have a Facebook page where they launch their new products.

 Service: Offers quality product and to gain people trust they do free sampling also.

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GLOBAL RETAIL PRESENCE AND SUBSIDIARY CHART
National Foods (NTL) are selling their products on a very large scale across geographical
locations of countries to where the consumers are available in various places in the world to
achieve the global presence and awareness as well as to capitalize on opportunities in potential
international markets. If the customers are willing to accept globalization, retailers have a clear
chance to establish worldwide strategy. The company has developed its global reach over 44
countries on 5 continents with great success. National Foods continues to bring joy to people
by providing original flavours, and reconnecting them with their long-standing Pakistani
traditions. National Foods are working hard to bring the consumer experience by giving some
support or services with their items in today’s highly competitive industry. The National Foods
collaborate with famous cash and carry store A1 Bags & Supplies Inc. in Canada as in order to
seek new opportunities and to provide their products & service worldwide and to minimize the
risk of financial activities and to cope up with the people easily and fastly.
The emergence of E-commerce has caused a tremendous upheaval in the retailing sector. As a
result, adopting e-retailing as a means of establishing a global presence has become a
requirement for business and that’s why National Foods introduced their ecommerce platform
Madeeasy.com.pk for the convenience of the people to promote their products on a worldwide
audience and earn a global reputation.
Strategies:
Franchising the business model brand, methods, copyrights, and other aspects of global
commerce and establishing franchise shops in different nations is one of the most prevalent
tactics. It’s a good method for National Foods for entering new markets that are both culturally
remote and accessible.
The company occasionally works with established enterprises to reach markets that are both
tough to enter and socially distant. In order to achieve technology-driven growth, the National
Foods formed a Joint Business Partnership with Google to collaborate on areas such as Digital
Development, Brand Love and most importantly Consumer insight and feedback.

National Foods Subsidiaries Organizational Chart:

National Epicure Inc. and National Foods Pakistan (UK) are two completely owned
subsidiaries of National Foods DMCC in which Epicure is in process of collecting &
controlling interest of a company in Canada named A1 Bags & Supplies.

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 Board of
Directors

Chief Executive
Officer

National
Foods DMCC
(UAE)

National National
Epicure Foods
Inc. Pakistan UK
Canada Ltd.

A -1
Bags &
Supplies
Inc.

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INTERNATIONAL DIVISION / OPERATIONS
National has been in the market for 50 years and now it has established its presence across the
globe in terms of exporting its products to different countries. Just like its subsidiaries are
located in Dubai, London and Canada who have regional representatives on the scout in the
international market understanding existing and potential consumer taste preferences of that
region. To overcome the cultural barriers and taste preferences, national once launched its
product Rivaaj which included every ingredients in a paste form in order to save time preparing
meal that became popular among Locals but soon its sales started dropping because of the
pungent smell it produced. National was popular amongst Natives because of its mild taste but
now as the taste preference changes, they had to cater to the market who loved spicy products
so then instead they launched Ronaq for the market who loved spicy foods and it because
popular right after its first launch.
National can decide to make its product fully available and on every shelves and capture
maximum Australian market by breaking the clutter and providing with innovation and
customer value through its products. Products like Ronaq can cater to people who mostly prefer
spicy foods while the Standard national spice mixes can provide Natives with mild taste.
National is already known for its best spices in premium packaging and has been in the industry
for quite a while who can create Goodwill and a strong competition amongst Major brands like
Shan, Everest, Rajesh, Zoff, etc in the Australian market.
In Order to understand the market better, we have used Market segmentation theory to better
ascertain the potential market.

MARKET SEGMENTATION

Market segmentation may aid in the identification and comprehension of your target
audiences and ideal clients. If you're a marketer, this helps you to focus your marketing more
efficiently by identifying the correct market for your items. Instead of sending a general
message to your whole audience, market segmentation helps you to deliver your content to
the appropriate individuals at the right time. This increases the likelihood of consumers
connecting with your ad or content, leading in more efficient campaigns and greater ROI.
Market segmentation consists of 4 parts Demographic, Behavioural, Geographic and
Psychographic.

Demographic side split up the audience into categories such as age group gender, education
level, income level, religion and race. On the other hand behavioural side shows up the
consumer behaviour towards the product and services that are being circulated in market or in
future will be available for consumers. This part also consists of habits and buying behaviour
of consumers, as well as actions, loyalty towards the brand and usage rate of that product.
Moreover in geographic segmentation marketer split market over locations and regions based
on where the product will be sold more and more and which region will be in more favour in

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terms of sales and profit. In addition psychographic segmentation deals with the
characteristics of audience, personality traits, values, beliefs, attitude and lifestyle.

Keeping in view these points National Food LTD have to follow these key aspects to launch
their operations in Australia.

1) Demographics: In this particular segmentation housewives and young audience will be

targeted as well as the cooks and restaurants and small cafes should be targeted.
2) Behavioural: In this segmentation NFL have to carefully monitor the buying behaviour of
consumer’s in Australia particularly the spices and other articles that will be sold as well as
the competitors market area, consumers habits and tastes.
3) Geographic: This is the most important part of segmentation towards NFL because the
area that will be chosen must have more south Asian population such as Sydney, Perth,
Melbourne and Brisbane. Along with the region the local market area must be the busiest area
in terms of supermarkets, restaurants, shopping area and branded stores nearby.
4) Psychographic: This segmentation is in resemblance with behavioural but in behavioural
the consumers are targeted and in psychographic complete audience is judged on basis of
values, beliefs and lifestyle. NFL on this side have to work on the people actually want and
what taste they are in comfortable in, because with the preference of Desi’s or south Asians
NFL have to work on how to cater Australian natives.

PESTLE ANALYSIS

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SOCIAL: As per the taste preference of Native Australians and their indigenous condiments
and food preferences, majority are brought up eating mid to low spicy foods but as the influx
of immigrations at their shores started increasing, they brought forth their culture and traditions
which got mixed with the Australian cuisines where as of now, you will see spicy dishes
available in the urban cities and their preference to eat spicy food also increased. We can see
that majority of Asians are settled and their demand for packaged spices like National food is
offering has to be met resulted in the availability of packaged spices at the retail stores like 7
Eleven, Kmart, Coles in the urban metropolis. Although because of the major influence India
has on Australia, Spices from India are vastly available than Pakistani Masalas. National is
finding challenging to Break the clutter and establish its presence in the Australian market and
tried to introduce Raj masala as its international brand to cater to the local consumer.

POLITICAL: Australia having low barriers to entry, sophisticated consumer and industrial
sector and an English speaking country, it welcomes foreign investments and is a big
contributor to growth and prosperity. Generally, Australia is home to many nationalities and
the political environment is stable and favourable for new entrants of MNEs. We can see it
listed in the top of Anti-Corruption country scoring 73/100 placing 18th in the listing. Moreover,
Australia is very particular about labour laws being paid at least the minimum wage, paid
leaves, safe place to work and pensions. As a democratic country, we don’t see political
intervention which makes it best place to conduct business.

ENVIRONMENTAL: This goes without saying that Climate conditions in Australia are very
unique. One will generally expect winters starting from fall till spring while it is the complete
opposite in the land of Kangaroos. The company has to take consideration of the increasing
weather changes that are engendering hotter summer days, intense rainfalls, droughts and the
infamous Australian Bushfires which are the antecedents of Increase in greenhouse gases
through mass carbon footprint in the atmosphere caused by Human activities. The supply chain
of National can get disrupted in these conditions. We also have an example of Unprecedented
COVID-19 which disrupted the entire business processes. Therefore, Australia has to take
some measures and move towards renewable energies in order to mitigate these environmental
challenges that are causing human and monetary loss and move towards sustainability for the
MNEs like National foods.

TECHNOLOGICAL: The innovation and R&D has brought unique flavours that are being
propagated in the Food market of Australia that are catering to ever-changing taste preferences
of people and try to keep their taste buds engaged with introducing new flavours into the
markets. With the Increase in Technology has brought internet into existence which is the result
of globalization and now we can see how easily Brands like National foods are marketing their
products and retaining their positions in the market by providing customer value through
technological tools to cater to existing and potential consumer base.

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LEGAL: The legal aspect influences the success and failure of any business. As for the cases
of companies like National foods, it is important to comply with legal standard of conducting
a business in a foreign setting. National has to consider their employees’ rights such as bullying
and sexual harassment laws in the Australian setting are taken very seriously and can put the
culprit behind the bars. Companies such as National foods are prone to collecting existing and
potential consumer data and using that data to curate and perfect their products. However,
doing business in Australia, they must understand there is a proper collection for data, storing
and usage of data and if it is misleading can put penalties on the company. Therefore, the
Company should learn and educate their employees to avoid any uncertainties.

ECONOMICAL: Australia has an open-trade exposed economy and has around $1.3 Trillion
GDP mostly by its exports of agricultural and mining commodities used in the production of
electricity and industrial goods. Pakistan has a good Bilateral Agreements with Australia in
terms of trade as their major export to Pakistan is oil seed, pulses and scrap materials while
also their education services exported to Pakistani students. As per the research, Export of
spices from Pakistan is the biggest chunk to export to Australia where National foods is
predominantly exporting Recipe Mixes and plain spices catering to the Asian customers and
new users who are Australian natives. The turnover is around $46k for 19,000 KG of spices
exported to Australia including ginger, saffron, turmeric, pepper, etc. According to
COMTRADE, The data of 2021 indicated the export of Coffee, tea, mate and spices to
Australia was US $4.62 Million.

COMPETITORS IN AUSTRALIAN MARKET

The global spices market size was valued at USD 5.86 billion in 2019 and is expected to expand
at a compound annual growth rate (CAGR) of 6.5% from 2020 to 2027. Increasing demand for
authentic cuisines globally is one of the foremost factors driving the consumption of spices.
The growing fondness towards enjoying various kinds of flavours in foods and snacks is likely
to prompt manufacturers to produce high-quality, appealing, and reliable products that can
maintain consistent standards globally. Spices can alter the taste of specific cuisines and
correlate with flavours of various regions. For instance, the Middle East and Southeast Asia
are likely to contribute to fusions, which is expected to gain presence in the market over the
forecast period.
Powdered spices accounted for more than 50.0% share of the global revenue in 2019. Growing
consumer preference for whole spices to save time and attain authentic flavour is anticipated
to propel their demand. These products are largely sold in the form of various mixes. Powdered
forms are used as marinades, rubs, snack mix, and flavouring agents for curries. Furthermore,
these products are often used in bread dough and batters to create a rich crust on bread pieces.

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These have a long shelf life and don’t have to be stored in the refrigerator. They can be mixed
with water or can be directly sprinkled into the recipe
Asia Pacific held the largest share of over 35.0% in 2019. Asia Pacific is one of the leading
producers and exporters of spices. The region has the largest population in the world and has
been witnessing impressive growth in the demand for spices. Most of the spices and herbs are
grown in countries, such as India, Vietnam, China, and Thailand, thus making the region the
major exporter in the world.
There are many Indian and Pakistani Spice companies which are already in competition
globally and many are making their place to enter the market as it's a billion-dollar market
which has already place for more companies because everywhere many Pakistan is India and
Bangladesh is and other Asian people from Afghanistan Iran and Central Asian States visit
and migrate to Western countries where they demand these Asian spices
If we go through the different name from the Indian masala spices companies which are
doing their business globally the biggest Indian company form you found is Everest spices
MDH masala butter masala catch spices
Which is making India the largest exporter of spices globally with the worth of us 4.18 billion
dollar and its 34% increase after the year 2020
On the other hand, Pakistani firms and also big explorers globally for this Asian aur indo-
Pakistani masala spices the major Pakistani competitor National food will face will face is the
Shan foods and the Dali Earth food, Milani foods pure, Mehran foods, foods Eastern foods
and Karachi.
The many like hundreds of small fishes in the business but there are few big fishes like Shan
foods Eastern foods and Indian Everest and MDH masala and different and few more farms
like them which are running and capturing the whole Indian Pakistani market in Europe and
Asia Pacific and America

PORTERS DIAMOND MODEL

What is Michael Porter's Diamond Model?

Michael Porter's Diamond Model (also known as the Theory of National Competitive
Advantage of Industries) is a diamond-shaped framework that focuses on explaining why
certain industries within a particular nation are competitive internationally, whereas
others might not

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The Porter Diamond model is a strategic economic model that tries to explain why one
nation-state is more successful in a given industry than another. Four determinant elements
must be present, according to the model, for an industry to have a national competitive
advantage.
The following are the four elements:
1. Factor conditions
2. Demand conditions
3. Related and supporting industries, and
4. Firm strategy, structure, and rivalry

Factors
The various types of resources that may or may not be present inside a country are referred to
as factor conditions. Human resources, capital resources, natural resources, infrastructure,
and knowledge resources are all examples of resources.
Like Asian who demand these spices globally aware about the background of the spices
which recipes and taste of specific dish you better get from which country and which spices
are good in which country which will influence their decision.

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Demand Conditions
The level of beneficial industries inside a country is mostly determined by domestic demand.
A wider market means more obstacles, but it also offers more chances for the organization to
develop and improve. In fact, the more demanding home market customers are, the greater
the pressure on corporations to innovate and improve.
As these customers are mostly migrated from Asian country and they know that which brand
is more successful in their country they analyze their market share in their parent country and
then came to the decision like Shan and National food in Pakistan and Everest and MDH in
India.
Related & Supporting Industries
One industry’s success may be influenced by the success of linked industries or suppliers.
The presence of internationally competitive suppliers within a country can be beneficial to
the businesses that use them. This is due to the fact that it allows for the most cost-effective
access to inputs. In addition, it provides early access to new items and stimulates information
exchange.
In this scenario people will see which distributors are selling this product like if Walmart
having something on shelves means they have properly analyzed the firm and product for
their quality standards and also like who are the suppliers of that product are they up to mark
or not.
Firm Strategy, Structure & Rivalry
The competitiveness of a country’s businesses is determined by how such businesses
formulate their strategy and organize themselves. The amount of competition between
enterprises in an industry also influences competitiveness.
Domestic competition is also important for international competitiveness because it drives
organizations to create distinctive and long-term strengths and capabilities. Companies are
compelled to innovate and improve to keep their competitive advantage as domestic
competition becomes more intense.
It’s like Shan and National food competing in Pakistani local market for their increased in
market share and for the rivalry they go global and will add value for their customers and
both want to deliver better quality and taste and value to its customer or consumer to maintain
its rivalry in the market locally and globally. In the end, this will only benefit businesses
when they reach the global market. The Japanese automobile industry is a notable illustration
of this, with fierce competition between Nissan, Honda, Toyota, Suzuki, Mitsubishi, and
Subaru. They have been better able to compete in global markets as a result of their own
tough home competition.

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CONCLUSION

The tactics for competing in overseas markets were discussed in this Report. When it comes
to competing in foreign markets, CEOs must weigh the rewards and dangers before deciding
whether or not to grow internationally. Executives should also think about their existing
(domestic) demand circumstances, factor conditions, linked and supporting sectors, as well as
strategy, structure, and rivalry, which can all impact the likelihood of success in international
markets. When a company decides to expand internationally, it must decide whether to
pursue a multidomestic, global, or transnational strategy. Finally, executives might choose to
manage a company's entry into a new market via exporting, becoming a fully owned
subsidiary, franchising, licencing, or forming a joint venture or strategic partnership.
Here in this report we have chosen Australia for NFL to expand its operations there and all
the factors of competition and demand forecasting have been discussed. The international
strategies that we have selected for NFL are multidomestic and transnational strategies as
there are some minor changes in packaging and in taste that have to be made for sell your
articles according to the buying habits of Australian consumers and Asians living there.
On the other hand NFL should go for joint venture in Australia as moving into new market
there will be greater source of resources, risk will be divide, greater capacity as well as access
to established markets and distribution channels. The firm will have to build stronger R&D
team in overseas to achieve all goals, split market segmentation and apply proper strategies,
promoting articles, placing prices and where product should be placed.

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REFERENCES
https://www.trade.gov/knowledge-product/exporting-australia-market-overview
https://www.quora.com/Are-Australian-foods-spicy
https://quisine.quandoo.com.au/stories/modern-australian-cuisine
https://www.dailymail.co.uk/news/article-2760533/New-study-shows-Australians-opt-away-
spicy-food-spicy-taste-buds-higher-self-esteem.html
https://sourceessay.com/common-legal-issues-faced-by-australian-businesses/
https://propakistani.pk/2022/01/10/national-foods-expands-its-footprint-to-usa/
https://en.wikipedia.org/wiki/National_Foods_Limited
https://www.nfoods.com/our-story/global-presence/
https://www.nfoods.com/app/uploads/2021/06/Annual-Report-2020-P1.pdf

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