Task 1:
Crucial Role of International Market Research in Global Business Expansion
Research on markets in international business is an important factor since it assists in accumulating valuable information on the market situation, customer preference, competitors, and the law, which are critical in strategic development (Tien et al., 2019). It also helps the firms to find out if the target market has interest in the products or services offered by the business (Osano, 2019).
This involves assessing factors like the size of the market, its growth rate and customers’ buying behaviour in order to ensure that products and services being offered are appropriate for the market. For instance, a product that is effective in one market may require a complete overhaul to be effective in another due to the cultural and anticipations of the consumers in the two markets.
Another important aspect that market research assists in identifying is competition. It gives information about the competitors in the market and their market share along with their strengths and weaknesses which helps business to differentiate itself and get an edge over the competitors (Ghauri et al., 2021). Perceiving the competitive environment makes it possible to foresee threats and risks, and seize opportunities (Tien et al., 2019).
Furthermore, using market research, businesses get to determine the most appropriate entry mode to use. Strategic alliances with other local organizations or venturing with local players may be of great importance since they will assist the company in developing a market entry and development strategy (Osano, 2019). They are particularly valuable when venturing into unknown areas and securing a foothold in new locations.
Task 2:
Evaluating Hummingbird Technologies’ Readiness for International Expansion
Hummingbird Technologies – a company that operates in the UK and that offers AI solutions for precision farming – is now ready for the international expansion due to its innovative technologies, partnerships, and funding. Employing AI, ML, and satellite imagery since 2016, Hummingbird provides farmers with actionable insights to enhance crop and operational productivity (Space Solutions, 2019).
Some of the areas it has already started to break into the significant global markets of North American and Australia demonstrating its capability of working in numerous types of agricultural environments (Hummingbird Technologies, 2024). It also shows how Hummingbird can apply and develop its high-quality technological services for the need of different fields. For example, their operations in Salinas, California, which is acknowledged as a center of innovation for agriculture, prove their correct market analysis and positioning (Hummingbird Technologies, 2024).
Over the years, strategic investments have been very central in the development of Hummingbird. The firm has secured significant funding from key investors like BASF and TELUS Ventures, which have enabled the company to enhance its technological fundamentals and market footprint (Fenwick, 2019). In addition to the financial support, BASF also introduced Hummingbird to their Agricultural Solutions which will provide Hummingbird with a vast amount of resource and information in the industry. The purpose of this partnership is to generate new market opportunities and new ways of operating, thus allowing Hummingbird to build on its position within the market.
The company has recently been acquired by Agreena, a carbon farming platform. This strategic move entails integrating Hummingbird’s MRV technology in Agreena’s platform, making agricultural carbon certificates more credible and sustainable (Marston, 2022). This partnership is expected to enhance the development of improved and efficient agricultural practices, a vision that Hummingbird holds of championing for sustainable farming globally.
In addition, through its membership in the Greentech Alliance and the Cool Farm Alliance, the company is committed to sustainable farming and adoption of new technologies (Hummingbird Technologies, 2024). It is essential for knowledge sharing and cooperation during the internationalisation process, such affiliations provide access to a broader network of partners and consumers. Therefore, it is possible to state that Hummingbird Technologies is incredibly well-positioned for the international expansion.
Task 3: Comparative Market Analysis: Italy vs. Australia
In light of the thorough assessment in Appendix A, Australia is established as the most suitable market for Hummingbird Technologies to venture into, outcompeting Italy in all relevant criteria. The main factors that make Australia highly attractive are its well-connectedness with other countries, political stability, sound legal systems, economic-friendly environment, and technological development. The following is a discussion of these factors in detail:
Global Connectedness
The trade-to-GDP ratio is 45.14% for Australia, making it an active and open market (MacroTrends., 2024). It enjoys numerous International Trade Relations which make business easy by removing barriers to trade and ease on market access. Additionally, the strong position of Australia on the Logistics Performance Index (4.01) guarantees efficient transportation and delivery systems, crucial for timely and accurate data collection and analysis (World Bank, 2023).
On the other hand, although Italy has high trade openness and many EU trade partners, it has lower logistics quality and business environment. These factors make Australia more favorable for smooth international operations and its integration into the global market.
Political Stability
Australia has a high political stability index (0.93) and the governance (1.5) in the country is efficient thus making the country safe for business (The Global Economy, 2023). Low political risk and high scores in corruption perception indicate that the country has a stable and sound political environment, which is crucial to foreign investors and strategic planning (Chong et al., 2020).
Italy, however, has moderate political risk with political instability, which might lead to uncertainties and disruption of business. This makes Australia a safer and more stable option for expansion.
Legal Framework
The legal structure in Australia is well developed and friendly to business operations. The country has high ratings in regulatory quality and contract enforcement, meaning that the legal framework governing business is dependable (Gordon et al., 2024). Legal protection of IPRs is strong, thereby fostering invention and shielding patented products.
Italy still faces challenges in the regulatory quality and bureaucracy even though it has a good legal environment (Bellodi et al., 2024). This makes it slightly difficult for a foreign business to invest in Italy due to the legal structures, unlike the easy and business-friendly legal frameworks of the Australian legal systems.
Economic Factors
The Australian economy is quite robust and favorable for doing business. Australia provides a stable economic environment with a low unemployment rate, which is at 3.7% and inflation at 4.1% as per the data of FXStreet in 2024. They have a relatively big market with a GDP of about 1.74 trillion USD, the fact that there is still much potential in terms of market share gains (O’Neill, 2024).
Italy on the other hand has a larger market size with a GDP of 2 trillion USD, though it has a higher unemployment rate of 7.7% and inflation rate of 5.9% (Canelli et al., 2024). It is thus more appropriate that Hummingbird Technologies should expand to Australia since the conditions are more conducive in terms of economic freedom.
Technological Landscape
The technology usage in Australia is very advanced and this is advantageous to Hummingbird Technologies. A high tech index and a large R&D spending (1.2% of GDP) indicate that the country is keen on innovation and technology (Myers et al., 2024). Australia has a strong digital foundation, making it easy to implement precision agriculture technologies.
Italy, which is also a technological powerhouse, is less advanced in technology usage and digital ecosystem than Australia. Technological advancement and connectivity in Italy is relatively slower than in Australia, which makes it difficult to adopt innovative technologies in agriculture (Benecchi et al., 2023).
Essentially, these factors not only facilitate effective business functioning but are also in line with Hummingbird Technologies’ mission of driving sustainable agriculture through technology (Hummingbird Technologies, 2024). Hence, the expansion into Australia will allow Hummingbird Technologies to tap into new markets, spur innovation, and grow sustainably.
Task 4:
Porter’s Five Forces: Assessing the Australian AgTech Industry
In the context of Hummingbird Technologies’ market entry into Australia, the use of Porter’s Five Forces framework provides a clear understanding of the competitive forces at play. This strategic analysis assists in identifying the most important opportunities and threats that are vital for a successful market entry.
Threat of New Entrants (Moderate)
The market is very appealing because of the growth prospects and the need for better solutions in agriculture. However, there are major entry barriers. These are high fixed costs of investment, highly skilled technology, and the challenges of dealing with regulations (Tesla, 2021). Also, it is necessary to gain the trust of local farmers since they may be reluctant to embrace new technologies that have not been tested in the region.
Industry giants such as Hummingbird Technologies with a well-established reputation and prior experience in the market can reduce the effects of new entrants (Marston, 2022).
Bargaining Power of Suppliers (Moderate)
Since the components like sensors, drones, satellite images, etc. are highly specific, the suppliers of these inputs have considerable bargaining power. However, the nature of suppliers in Australia is relatively competitive, which enables firms to bargain for better conditions and prices (Tesla, 2021).
Hummingbird Technologies can minimize supplier power through supplier diversification and internal development of some technologies (Holloway, 2024). The fact that there are many suppliers across the globe means that no particular supplier can monopolize the market and this offers Hummingbird a chance to source quality components at reasonable prices.
Bargaining Power of Buyers (High)
The buyers in the agricultural sector, especially farmers and agribusiness organizations, are knowledgeable and looking for affordable value-added solutions that would increase efficiency and profitability while being environmentally friendly (Amin-Chaudhry et al., 2022). This implies that the buyers in the AgTech market have options to choose from due to competition within the market.
In the case of Hummingbird Technologies, there is a need to emphasize the tangible advantages of precision agriculture solutions for consumers, including higher yields and resource utilization (Amin-Chaudhry et al., 2022). Reducing the buyer power depends on the ability to provide customized solutions, superior customer service, and affordable prices.
Threat of Substitute Products or Services (High)
Conventional practices and new technologies are some of the challenges that farmers face. This is because farmers may not see the need to spend more if they feel that cheaper solutions will suffice (Pannell & Rogers, 2022). Moreover, other companies in the AgTech space continue to create new products that can act as substitutes.
In response to this threat, Hummingbird Technologies needs to focus on key benefits that its products offer, including increased accuracy, integrated data, and lower long-term costs (Holloway, 2024). Substitute threats can be managed by ensuring that there is continuous innovation in the development of solutions that are easy to scale.
Competitive Rivalry (High)
Many local and foreign companies compete for market share, providing various technological services intended for enhancing agricultural yields (Amin-Chaudhry et al., 2022). This competition leads to better ideas on how to design products, how to advertise them and how to cultivate a good relationship with the customers. This is an area where Hummingbird Technologies is a clear winner owing to its AI and data analytics (Hummingbird Technologies, 2024). The strategies such as sharing best practices, establishing alliances, and forming a strong image will become imperative to survive in the competitive environment.
Opportunities
Technological Advancements: There is an opportunity for Hummingbird Technologies considering that the adoption of IoT, AI, and machine learning has advanced at a fast pace in agriculture (Araújo et al., 2023). These technologies possess the capabilities of improving farming practices, conserving resources, and increasing production.
Government Support: The policies of the Australian government, which focuses on subsidies for emission reduction and environment-friendly agriculture, provide a favorable environment for AgTech companies (Marston, 2022). Government policies encouraging the transition to net-zero emission by 2050 fund the development of progressive farming practices which in turn position Hummingbird Technologies to participate in these endeavours.
Threats
Regulatory Challenges: The market in Australia is highly regulated due to the numerous standards and certifications that are necessary for agricultural technologies (Holloway, 2024). These are regulations that must be observed and this can be very expensive.
Economic Fluctuations: Similar to the global economy, the agricultural sector faces risks associated with economic volatility and prices of different commodities (Araújo et al., 2023). Fluctuations in the market environment may affect the farmers’ ability to invest in new technologies, which is a threat to Hummingbird Technologies’ market expansion.
Competitive Pressure: Intense rivalry from incumbents and emerging competitors in the AgTech market requires constant innovation and positioning (Marston, 2022). This could lead to a loss of market share if the company is unable to progress as fast as its rivals.
Task 5: Sales Forecast and Strategic Partner Recommendation
Hummingbird Technologies has several main products that are aimed at enhancing farming practices through technological solutions. However, for this sales forecast, the focus will be on the following three products:
- Precision Agriculture Software
- AI-driven Crop Analytics
- Integrated Drone and Satellite Imaging Solutions
| Quarter | Product | Units Sold | Average Selling Price (AUD) | Total Revenue (AUD) |
| Q1 2025 | Precision Agriculture Software | 100 | 50,000 | 5,000,000 |
| AI-driven Crop Analytics | 50 | 100,000 | 5,000,000 | |
| Integrated Drone and Satellite Imaging | 25 | 200,000 | 5,000,000 | |
| Total Revenue | 15,000,000 | |||
| Q2 2025 | Precision Agriculture Software | 150 | 50,000 | 7,500,000 |
| AI-driven Crop Analytics | 75 | 100,000 | 7,500,000 | |
| Integrated Drone and Satellite Imaging | 50 | 200,000 | 10,000,000 | |
| Total Revenue | 25,00,000 | |||
| Q3 2025 | Precision Agriculture Software | 200 | 50,000 | 10,000,000 |
| AI-driven Crop Analytics | 100 | 100,000 | 10,000,000 | |
| Integrated Drone and Satellite Imaging | 75 | 200,000 | 15,000,000 | |
| Total Revenue | 35,000,000 | |||
| Q4 2025 | Precision Agriculture Software | 250 | 50,000 | 12,500,000 |
| AI-driven Crop Analytics | 150 | 100,000 | 15,000,000 | |
| Integrated Drone and Satellite Imaging | 100 | 200,000 | 20,000,000 | |
| Total Revenue | 47,500,000 | |||
| Total 2025 | Precision Agriculture Software | 700 | 50,000 | 35,000,000 |
| AI-driven Crop Analytics | 375 | 100,000 | 37,500,000 | |
| Integrated Drone and Satellite Imaging | 250 | 200,000 | 50,000,000 | |
| Grand Total Revenue | 122,500,000 |
Table 1: Sales Forecast Table
(Source: Self-created)
Justification and Insights
- Precision Agriculture Software: This software is very useful in enhancing farming practices. At an affordable price of AUD 50,000, it is affordable to most agricultural businesses (Cisternas et al., 2020). The increase from Q1 to Q4 is an indication of market penetration and adoption of the smartphones.
- AI-driven Crop Analytics: These analytics tools are available for AUD 100,000 and provide a high return through improved crop yields and resource utilisation. The sales are expected to rise gradually as farmers embrace artificial intelligence in farming practices (Hassan et al., 2022).
- Integrated Drone and Satellite Imaging Solutions: These high-value products, costing AUD 200,000, offer detailed information and analysis. They are relatively costly due to enhanced technology and the fact that they are associated with many benefits, and sales are expected to rise steadily throughout the year (Hassan et al., 2022).
Recommended Business Partner for Hummingbird Technologies in Australia
AgUnity can be seen as the ideal partner for Hummingbird Technologies as it seeks to enter the Australian market. AgUnity is an award-winning technology company that focuses on bridging organizations working on the UN Sustainable Development Goals with smallholder farmers using technology (Agunity, 2024). They have vast experience in applying technology in the agricultural sector, which makes them suitable partners for Hummingbird Technologies.
Justification
Technological Expertise: AgUnity stands out in leveraging blockchain and mobile technology to improve supply chain traceability and accountability in the agricultural sector (Agunity, 2024). This is in line with Hummingbird’s emphasis on precision agriculture and enhanced data analysis, making AgUnity a strategic fit.
Established Network: Given the strong connections with agricultural organizations and farmers, AgUnity can greatly help Hummingbird with market penetration (Tian et al., 2022). Their connections will help Hummingbird to easily build the necessary relationships with local farmers and agricultural related businesses to facilitate the adoption of its technologies.
Sustainable Practices: AgUnity focuses on supporting sustainable agriculture, which is in line with Hummingbird’s goal of enhancing the farming process and minimizing its negative effects on the environment with the help of technology (Hummingbird Technologies, 2024).
Innovation and Impact: AgUnity’s success in different markets proves that they can effectively encourage farmers to use technology (Holloway, 2024). AgUnity’s platform can be leveraged to show how Hummingbird’s products can be useful to Australian farmers, which would create trust and credibility.
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References
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