SB AGRINUTRITION- Student N3529260

PROPOSAL
INTERNATIONAL STRATEGY 2016/2017
Lecturer: Mr. Uly Ma
Contents
Introduction ............................................................................................................................................ 2
Strategy #1 Investment/Raising Capital .................................................................................... 3
Strategy #2 Taxation and Jurisdiction........................................................................................ 4
Strategy #3 Corporate Social Responsibility ............................................................................ 6
Strategy #4 Managing Innovation............................................................................................... 7
Conclusions and recommendations .............................................................................................. 9
Bibliography .......................................................................................................................................... 10
Appendices............................................................................................................................................ 12
PESTL Analysis .............................................................................................................................. 12
Industry Lifecycle Analysis ............................................................................................................ 13

pg. 1
 Executive Summary

The generated recommendation for SB Agrinutrition include; a partnership with the

French government who will take up 35% of ownership; Gaining access to the
available funds offered by Bpifrance and the European Investment bank; adoption of
a flat organizational structure to maintain innovative attitude; and also operating in a
socially responsible way by encouraging the involvement of stakeholders.
These recommendations have been generated after a strategic analysis in the four
selected areas which are: Investment and Raising Capital, Taxation and Jurisdiction,
Corporate Social Responsibility and Managing innovation. The analysis of these four
areas resulted into the discovery of the highly pro-business environment that currently
exists in France. The French government is one of the leading forces behind Europes
commitment to reduce the widening gap with US innovative firms.

pg. 2
 Introduction
SB Agrinutrition is a start-up firm led by a French cohort, which consists of former research
scientists and engineers. As a result of their research they have come up with a potentially
ground-breaking product for the nutrition industry, which is the 3D printable Super Banana.
The product is generated through an innovative engineering system known as the
(Ultrawave/PEPP System). Various news headlines as well as product testing on different
people, have evidenced the nutritional and health benefits of this product.
The altruistic nature of the inventors shows how they are not willing to use the UWPG system
to generate products of high worth, such as gold or palladium. Rather they prefer using their
invention to improve the lives of people and perhaps low cost medication for cancer treatment.
Quite often public health issues due to their detrimental impact to the society experience
governmental intervention in the form of nutritional advice to citizens or regulations to ensure
transparency in labelling and safeguard the consumers (sunjuanjuan, 2011).
With this in mind it would be logical for the SB team to establish the company as a Public-
Private Partnership with the French Government. The following sections analyse the areas
worth considering prior to the establishment of the business in France.

Strategy #1 Investment/Raising Capital

In order to ensure complete establishment and production in Europe by 2018, the research
team is seeking an investment sum of 40 million.
Raising capital through Government funding
Historically the French government is quite inclined towards supporting innovative startups by
providing them with the necessary funds. The current president Jean-Franois Hollande, has
stated himself that In an economy of innovation, capital is decisive. More money must always
be found to ensure faster development. The country, together with Germany, have each
pledged to further increase their investments into European start-ups in order to narrow the
existing gap with the rapidly growing American start-ups (Schechner S., Horobin W., 2015).
These intentions are aligned with Claude Dubois intention to make SB Agrinutrition a strategic
asset of France.
For this reason the French government has a specifically established a financial institution
known as Bpifrance. The institution provides financial support as well as operational
assistance for businesses at various stages (Small, Medium and Large enterprises). In
October 2016, the institution announced a partnership with the European Investment bank.
This partnership increased the lending capacity available to innovative companies to about 2
billion Euros (Investment plan for Europe, 2016).

Foreign Investors
The French government encourages foreign investors to invest in the country as well. The
Business France institution helps provides the guidance to foreign investors on the various
ways to invest correctly within its legal framework.
The most important information provided by Business France concerns is concerned with
double taxation of foreign investors. Thanks to the stipulation of bilateral tax treaties with over
100 countries, foreign investors are able to invest in French companies without facing double
taxation. Without the treaties each investor would be taxed 30% from the French government

pg. 3
for payed out dividends, in addition to the tax rate of the individuals country of residence (Doing
Business in France 2015).
This is definitely a pro-investment environment for SB Agrinutrition to raise the necessary fund
for the business. The team should proceed with obtaining the capital from the government to
start the business.

Strategy #2 Taxation and Jurisdiction

Establishing a business in the jurisdiction of France would be advantageous for SB
Agrinutrition. The benefits from this strategy are mainly financial. In addition to the tax free
period of 15 years offered by Claude DuBois, there are further incentives offered by the French
government which attract business establishment into the country.
French corporate tax
The current tax system in France is a result of the Governments effort to promote a pro-
business environment that would encourage local entrepreneurs as well as foreign investors
to establish their business in the country.
Usually companies in France are subject to the Local Economic Contribution (Contribution
Economique Territoriale CET) which is a tax payable by people exercising a professional
activity in France (Register, F. F., 2014). However it is worth considering that CET exemptions
apply to the following companies (Doing Business in France, 2015):

New companies operating in specific regions

New innovative companies (Jeunes Enterprises Innovantes)
New businesses dedicated to scientific and technical research activities
This is undoubtedly a good opportunity for SB Agrinutrition, as the firm falls into the last two
categories.

French employment law

In France when it comes to employment contracts, most of these are stipulated on a
permanent basis. In these contracts, employers may also include a section with clauses
agreed beforehand with the prospective employee. These are necessary to safeguard the
interests of both parties involved. With these clauses employers could require their employees
to undertake different roles during the period of their professional contract, or address
ownership of inventions, and rights to intellectual property.
Furthermore, the government is in favour of employers establishing a probationary period
through which they can review the performance of their employees and assess the skills they
possess. These vary according to the type of employee, and they are as follow:

Up to two months for individual with worker and employee status

Up to three months for individuals with a Higher employee and technician status
Up to four months for individuals with a Higher employee status which specifically
includes managerial roles

pg. 4
(Doing Business in France, 2015).
Recruitment of foreign nationals
Current immigration laws also favour the integration of foreign workers in the country. This is
incentivized through a favourable legal framework, which companies established in France
can leverage to provide optimal working conditions to foreign nationals. In accordance with
their agreement with EUs freedom of movement principle, the French accommodates EU
national in the country without the requirement of a visa. What they simply need to do is
register their personal details with a local municipal office within three months of their arrival
in France.
Non-EU nationals would need to apply for a visa prior to their visit to France. There are two
types of visa which can be issued by the government:

Short-stay visa This can be for a business trip (with no intention to be employed in
the country), or for a short-term assignment in a French company.
Long-stay visa This visa has a validity of three months. The holder has to specify
their reason for living in the country, and this ranges from Employee on Assignment
to Skills and Expertise

Pros Cons
High proportion of tertiary education Expensive labour (1,446.42 pcm)
graduates
Productive workforce with thirst for Generous holiday entitlement (up to 30 days
knowledge on average)
Government-funded training programmes Shortest legal working hours in Europe (35
and apprenticeships hours p.w.)
Table 1 Pros and Cons of employment laws in France

The table above points out the key positive and negative factors that should be considered in
regards to the employment market in France. Despite the fact that the labour is expensive,
there is substantial government backing which a company like SB Agrinutrition can rely on.
This can go a long way for the company, considering it is in its initial stages.

pg. 5
 Strategy #3 Corporate Social Responsibility
The Super Banana has the potential of improving the lives of individuals in the society. SB
Agrinutritions mission in society should extend beyond the functionality of its product, and
cover the wellbeing of its workforce and the local communities in which it operates. This should
be the mission of a socially responsible organization (p.127, Johnson et al., 2013).

Figure 1. Corporate Social Responsibility stances (p.128, Johnson et al., 2013)

With these considerations, SB Agrinutritions stance should gravitate towards that of a Forum
for stakeholder interaction as shown in the figure above. The following CSR stance is
commonly adopted by companies which produce and sell products that are highly beneficial
to the society.
The following approach would require SB to evaluate its performance not just solely through
financial information, rather through other avenues. These avenues can be identified in
proactive and continuous interactions with various stakeholders. It is an approach that would
also create a synergy with the personal interests of the team behind Super Banana. In fact,
not every single individual in the team is interested in making money. People like Andrea Wang
and Emma are prime examples of this. Emma specifically is keen to promote jobs locally, with
her mission she can be a board-level champion and influence the attitudes of her colleagues.
Furthermore this approach would promote long-term sustainability for SB Agrinutrition,
interacting with stakeholders would avoid a scenario whereby the company manufactured
products that damaged social welfare. Also, the social responsibilities of SB can be
summarized with the use of a Triple Bottom Line methods as seen below. The diagram would
enable the team at SB to clearly identify and act upon their duties to society (p.129, Johnson
et al., 2013).

pg. 6
 Social Responsibilities
Contribute actively to youth
employment
Ensure good personal health of
employees and a safe working
environment
Establish a training program for
new employees

Environmental Responsibilities Economic Responsibilities

Compliance with regulatory Playing an active role in
labelling Frances economic progress
Establishing initiatives to Become a profitable strategic
promote recycling asset for the country
Attract foreign investment in
the country (EU/World)

Triple Bottom Line diagram

Strategy #4 Managing Innovation

Organisational structure
Being a company in its initial stages, it would be logical for SB Agrinutrition to start off by
establishing a flat organisational structure. This is to encourage and facilitate communication
between the companys executives and engineers. It would also facilitate the implementation
of strategies.
According to the Haley Marketing Group (2015), the further advantages that come with this
structure include:

Low Cost SB Agrinutrition can save the costs of having a middle manager. It can be
an opportunity for the members in the team such as Chat to sharpen and develop his
communication and people skills.
Front line empowerment The power would not just be concentrated in the hands of
the top executives, rather it would be empower the people at the forefront also, who
deal with customer service.
Team-Based problem solving in flat organizations problems can be solved promptly
because of the team effort put into finding the right solutions to it. The collaborative
effort also promotes the occurrence of change in the organisation. Being an innovative
company, SB would highly benefit from this approach.
With the potential benefits that can be derived from this organizational structure, it would be
logical to recruit open-minded and relationship-oriented individuals to the company.

pg. 7
Innovative approach
With the Super Banana, SB Agrinutrition should have a market-pull approach rather than a
technology-push approach to innovation (p.297, Johnson et al., 2013). The technical aspects
of the product have already been defined, the focus should shift on the products actual use
for the consumers. Historically the French Government has employed the use of practitioners
in the health and nutrition industry to promote healthy eating. This is because of their
continuous interaction with families and individuals of different social backgrounds. Their work
has enabled the detection of nutrition related conditions such as overweight and obesity.
(French National Health and Nutrition program 2011-2015, 2013). For this reason it is vital for
the firm to establish a partnership with lead users in the nutrition industry. Lead users in this
case would be nutritionists, their expertise in the field can provide SB scientists with the
essential information they would need to infuse the Super Banana with the best and most
sought-after nutrients in the society.
Pace of diffusion
A products pace of diffusion in the market is determined by a mixture of supply and demand
factors and managers of a company have considerable control over these (p.305, Johnson et.
al, 2013).

Supply Demand
Experimentation: Trials conducted with Market Awareness: promotional effort
2,350 people
Degree of performance improvement above Network effects: Lead user approach
existing products
Pricing structure complexity Customers propensity to adopt: i.e Early
adopters, Laggards
Customer relationship management system
Table 2. Supply and Demand factors for SB Agrinutrition

The table above outlines the supply and demand factors in place for SB Agrinutritions product.
There are currently more pre-established elements on the supply side than on the demand
side.

Figure 2. "The Diffusion S-Curve" (Johnson et. al, 2013)

pg. 8
A proper implementation of the proposed strategies on the demand side would enable SB to
reach the tipping point shown on the S-Curve diagram above. From this point onwards
demand for the Super Banana would increase rapidly. There is an emphasis placed on
sustainability in the food industry. Food suppliers are looking for protein alternatives to meat.
Algae and insects seem to be the replacements, however there are challenges related to
affordability and acceptability for the customer.
Technology is gaining a prominent ground in the industry. Through the use of wearable
technologies and scanners, customers can become more aware of their nutritional intake and
deficiencies. 3D printed foods give consumers the opportunity to personalize ingredients,
nutritional values, texture and size (Stones, M. & FoodM., 2015). Seizing these opportunities
would enable SB to enhance the innovative trait of its product.

Recommendations

Following the analyses in the four areas selected, the following actions are recommended for
the establishment of SB Agrinutrition:

Registering the company in France

Accept Claude DuBois offer of 35% ownership
Obtain investment funds from Bpi France and The European Investment Bank
Recruit and train new employees in order to gain advantageous tax credit
Adopt a socially responsible approach in line with the purpose of the Super Banana
product
Take on a flat organisational structure to encourage further innovation

pg. 9
Bibliography
"New function health claims under article 13.5 (2016). Available from:
https://www.efsa.europa.eu/en/topics/topic/article13-5 [Accessed 12 January 2017].

2, P. to T. (2014) France. Business Culture. Available from: http://businessculture.org/western-

europe/business-culture-in-france/ [Accessed 12 January 2017].

3D opportunity serves it up (2015). DU Press. Available from: https://dupress.deloitte.com/dup-us-

en/focus/3d-opportunity/3d-printing-in-the-food-industry.html [Accessed 12 January 2017].

COMM (2016) Nutrition and health claims - food safety - European commission. Food Safety.
Available from: https://ec.europa.eu/food/safety/labelling_nutrition/claims_en [Accessed 12
January 2017].

Doing Business In France (2015). Business France. Available from: http://invest.businessfrance.fr/wp-

content/uploads/2015/07/DB_BUSINESS_UK_2015_BD.pdf [Accessed 10 January 2017].

Fact 8: Frances advantages in terms of human capital (2013). France in the United Kingdom - La
France au Royaume-Uni. Available from: http://www.ambafrance-uk.org/Fact-8-France-s-
advantages-in [Accessed 12 January 2017].

France: Investment plan for Europe: EIB group and Bpifrance sign two agreements to support
sustainable industry and innovative SMEs (2016). European Investment Bank. Available from:
http://www.eib.org/infocentre/press/releases/all/2016/2016-232-plan-dinvestissement-pour-
leurope-le-groupe-bei-et-bpifrance-signent-deux-accords-pour-soutenir-lindustrie-durable-et-les-
pme-innovantes.htm [Accessed 12 January 2017].

French National Health and Nutrition Program 2011-2015 (2013). France: Programme National
Nutrition Sant. Available from: http://social-sante.gouv.fr/IMG/pdf/PNNS_UK_INDD_V2.pdf
[Accessed 10 January 2017].

Group, H. M. (2015) The advantages & disadvantages of a flat organization. Available from:
http://www.thecbigroup.com/2015/07/08/the-advantages-disadvantages-of-a-flat-organization/
[Accessed 10 January 2017].

Johnson, G., Whittington, R., Scholes, K. and Angwin, D. (2013) Exploring strategy: Text & cases. 10th
ed. Harlow, England: Pearson Education.

NEWSLETTER, U. T. (2017) Pledge to fight obesity reaffirmed with Vienna declaration. Available from:
http://www.bmdergi.org/en/pledge-to-fight-obesity-reaffirmed-with-vienna-declaration/ [Accessed
12 January 2017].

Regional Business Environment: Western Europe (2015). Euromonitor. Available from: http://0-
www.portal.euromonitor.com.lispac.lsbu.ac.uk/portal/analysis/tab [Accessed 12 January 2017].

Register, F. F. (2014) Territorial economic contribution. Available from:

http://www.rif.mer.developpement-durable.gouv.fr/en/territorial-economic-contribution-r71.html
[Accessed 10 January 2017].

Schechner, S. and Horobin, W. (2015) France and Germany pledge European tech startup investment.
wsj.com. Available from: http://www.wsj.com/articles/france-and-germany-pledge-european-tech-
startup-investment-1445972565 [Accessed 12 January 2017].

pg. 10
SMEs, G. A. of (2014) French social and business Culture-France market. Available from:
http://www.globalsmes.org/news/index.php?func=detail&detailid=512&catalog=24&lan=en
[Accessed 12 January 2017].

Stones, M. and FoodM (2015) Non fried breaded snacks. Fred Humphrey. Available from:
http://www.foodmanufacture.co.uk/NPD/Food-industry-innovation-to-shape-future [Accessed 10
January 2017].

sunjuanjuan (2011) Government intervention on nutrition. Le blog du Programme Lascaux. Available

from: https://programmelascaux.wordpress.com/2011/11/22/government-intervention-on-
nutrition/ [Accessed 9 January 2017].

Waylon, S. (2012) French technology status. Available from: http://toggg.com/spip/spip.php/french-

technology-status/ [Accessed 12 January 2017].

pg. 11
 Appendices

PESTL Analysis

Political Factors
- Through their National nutrition and Health Program, the French government is
committed to improve the eating habits and nutritional intake of the population.
Especially the high-risk group. (Ministry of Health, 2012)
- They encourage the implementation of public/private partnerships that enable
improvement of the quality of ingredients (Ministry of Health,2012)
- Of the 6 regions EU is the most affected region for NCDs (Non communicable
diseases).This has sparked a plan of action by WHO EU regional office, and it covers
the 2015-2020 period. Some of their plans aim to:
Improve access to proper nutrition which consequently reduces different
forms of malnutrition
Introduce easy-to-understand nutritional information about food products.
This allows consumers to have a better understanding of the products and it
makes them more aware of their nutritional choices.
- Following unbearable pressure from various stakeholder groups, EU politicians have
pledged for more effective action on the root causes of obesity and NCDs at the
Vienna Declaration in 2013 (Newsletter, 2017).
Economic factors
- Western Europe is considered as a key region for consumer goods companies, as it
accounted for 24.6% global GDP in 2014 (Euromonitor Regional Business
Environment, 2015)
- Many of its markets are the most accessible in the world, and 9 countries in the
region were in the top ten 2014 corruption index list. (Euromonitor, 2015)
Social factors
- There is a great deal of individualism in the French society. People like to feel unique
and they really value their freedom of opinion. These traits are reflected not just in
the society but also in business (SMEs, 2014).
- France is a culturally diverse country and it is a country known for its cosmopolitan
approach to life. The country culturally has a low tolerance for uncertainty, therefore
individuals doing business in the country would have to cope with the fact that there
is a low degree of risk taking (Business Culture, 2014).
Technological factors
- There a lot of French start-ups on the rise at the moment which are being backed by
government and venture capitalists funding. This is a response to the rising startup
companies in the US (Schechner S., Horobin W., 2015)
- France is the leader in high speed transport technology. This is useful for people in
business as it can make their travelling more convenient (Waylon S., 2012).

pg. 12
Legal Factors
- Regulation (EC) No 1924/2006 was introduced on the 1st of July 2007. It applies to
nutrition claims (low fat, high fibre) and health claims (Vitamin D supports bone
development in children). This law makes sure that any of these claims are based
on scientific evidence. (COMM, 2016)
- A scientific dossier should be submitted to the EFSA for assessment/approval.
Competent authorities of member states are in charge of submitting the document
(EFSA, 2016).
- Claims being processed
http://ec.europa.eu/food/safety/labelling_nutrition/claims/register/public/?event=claim
sBeingProcessed

Industry Lifecycle Analysis

Figure 3. The industry Life cycle (p.52, Johnson et al., 2013)

From the initial findings about the 3D food printing industry, we can say that it is currently in a
Development stage. This is because there are few players in the market as of now and their
product offerings are highly differentiated. Profits may be scarce initially due to high investment
requirements.
3D printing food is also referred to as Additive Manufacturing, at the moment they are a novelty
in the market and it is said that they do not have the potential to be a game-changer. This is
because it is unlikely to be manufactured by restaurants and packaged-food giants in the near
future. However, there are a lot of benefits attributed with edible AM products which include:
- Product differentiation
- Productcustomization
- Direct-to-customer relationships
(DU Press, 2015).

pg. 13