Abstract:
Cinnamon is a renowned export commodity in Sri Lanka from the colonial time. The
glory and the demand for Ceylon cinnamon is continuing with a contribution of
85% to the global market. Despite the spices exports declined by 11.3% in year
2018, demand for cinnamon is still growing yet reported as lagging behind in
respect to the world demand. Thus, the market share at the international market is
gradually dwindling. Hence, this study tried to unravel the strategies adopted by
existing cinnamon exporters in internationalization, especially focusing on
potentials and challenges. Data were gathered through a mixed method approach
by administering a questionnaire (n=15) and in-depth interviews (n=5) with
cinnamon exporters in Matara, Galle and Colombo districts employing convenient
sampling technique. Data were analyzed using descriptive statistics and Wilcoxon
Signed Rank test. Results revealed that most of the exporters entered the
international market through direct exporting (67%) via contacts. Availability of
market information (W=3.118, p=.002), branded products (W=2.664, p=.008),
managerial motivation (W=2.439, p=.015) and lucrative nature of the business
(W=2.0, p=.046) were the significant proactive motivating factors towards
internationalization. On the other hand, consumer feedback (W=3.326, p=.001),
order inquiries from foreign customers (W=3.159, p=.002), digital media
(W=3.085, p=.002), company recognition (W=2.680, p=.007) and rivalry (W=2.432,
p=.015) are also significant reactive reasons for the sustenance in the international
market. Lack of technology (W=2.529, p=.011), insufficient information about
overseas market (W=2.245, p=.025) and smuggled low quality products (W=2.820,
p=.028) were highlighted as significant constraints for the industry expansion.
These barriers have hindered the competitive advantage in the cinnamon market.
Therefore, proper branding mechanisms (W=2.951, p=.003),value additions to
exports (W=2.657, p=.008), effective customer service (W=2.257, p=.024), ecommerce
platforms (W=2.058, p=.040), hygienic packaging (W=3.564,p<.001),
standard labeling (W=3.393, p=.001) and quality standards (W=3.434, p=.001) are
suggested as significant crucial factors to capture the international market. In fact,
the study suggested to establish business incubators for addressing these issues
and challenges while encouraging new cinnamon exporters to explore the
potentials of the industry at the international market.
