Reference no: EM1310160

Q. Bluebonnet Creameries is a large US ice cream company. The family-owned enterprise makes premium ice crease using only fresh, natural ingredients. Its butter-fat content is lower than that of Ben & Jerry's also Haagen-Dazs but higher than that of such national brands as Dreyer's. This allows the firm to hit the true ‘middle' of the market.

One ingredient in Bluebonnet's success has been its production also distribution model. Transporting ice cream over long distances requires that it be ‘deep frozen'. This process, unfortunately, also requires the addition of preservatives also produces a slightly altered taste. As a result, bluebonnet has built a number of mid-sized creameries near its major market centres throughout the US. The firm also has its own fleet of delivery trucks also drivers to transport the ice cream also stock grocery shelves. Using this model, Bluebonnet doesn't have to ‘deep freeze' its products because their ice cream is made with a one-day drive of each market where it's delivered. Thus, a truck can leave a creamery with a full-load early in the morning, spend the day making deliveries, and also have an empty truck by the end of the same day.

Consumers may also order Bluebonnet products online. The order is packed in Styrofoam containers, retriggered with dry ice, also shipped via FedEx or UPS with next day delivery. Because distances are so short also export requirements clear, Bluebonnet can also fulfil orders to Canada, Mexico, Central America, also the Caribbean. A potential international customer from Europe, Asia or elsewhere is informed early in the order process that Bluebonnet cannot ship to that individual's address. The primary reasons that Bluebonnet cannot fulfil orders from these locations are that normal shipping times are simply too long also customs regulations too complicated in multiple countries.

The manager in charge of online service has been monitoring foreign orders for several years also has noticed a steady but dramatic increase in online order attempts from Chin1) Indeed, the attempted order volume has grown to the point where the online service manager has brought it up to a couple of senior managers outlining that revenues could increase by 25%.

After careful Consideration, the family is considering a market expansion into Asia also has identified the following options:

1. Continue to follow their current business model also ignore the Asian market
2. Build a dedicated creamery designed for international distribution. The creamery would be built near a major FedEx or UPS shipping hub, also ice cream produced there would include preservatives. Overseas order from Asian, as well as Europe, Australia, South American, also Africa would be filled from this location only. The product would be ‘deep frozen', packed with chemicals, also be shipped within a 10-day cycle time to the customer. The expense for the additional cost would be passed onto the customer.
3. Contract with a Chinese distribution partner. Build a dedicated creamery near a west coast shipping port. Mass produce ice cream with preservatives at the creamery, ‘deep freeze', the ice cream, also pack in large refrigerated shipping containers. Ship the containers via freighters to China also require the Chinese firm to control all distribution within Chin1)
4. Contract with a Chinese partner also build a creamery in China in Beijing, Shanghai, or Hong Kong. There would be no additional preservatives also the product would be identical to Illustrate is sold in the US.

Please prepare a recommendation for only ONE of the options