Case Scenario: In the year 2010, 5 business graduates of Southern Cross University came together to pursue their dream of starting a new business. They conducted a thorough analysis of the Australian...

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Case Scenario:


In the year 2010, 5 business graduates of Southern Cross University came together to pursue their


dream of starting a new business. They conducted a thorough analysis of the Australian market and


found a growing demand for craft beers not only from local
residents,
but also from tourists from



other countries. So they decided to start a small brewing company named ‘CHEERS’ on the Gold


Coast with an initial start-up cost of $ 500,000 (each partner contributing $ 100,000) and brew 3


varieties of craft beer. The choice of craft beers was also to avoid competition with and differentiate


from beers produced by larger and more established brands in the local market The product was


well received within this Australian niche market, and even with a slightly higher price (when


compared to other mainstream beer brands), demand for CHEERS’ varieties did not seem to deter.


In the following 6 years, the business experienced significant growth. Turnover increased from $ 2.5


million in the financial year 2010-2011 to $ 30 million in the financial year 2015-2016.
Number
of



employees also increased from 8 to 28 during the same period. However,
growth
of the business



has somehow stalled since
end
of 2015, and the management team at CHEERS
realised
that they will



need to look for
overseas market
to maintain the growth momentum. They looked into numerous



potential target markets and shortlisted 2 countries – Brazil and India.


Task:


You, being a recent recruit as an International Operations Manager at CHEERS, have been asked to


prepare a report (3000 words) for the company’s executive evaluating the risks and opportunities in


each of these two countries and recommend the best destination for the company. As a part of this

project, you have been also requested to suggest the most appropriate entry mode for the chosen

country, and the marketing (product, pricing
and
distribution only) and human resource (staffing and



training only) strategy that the company should adopt.


When completing this assignment you are required to access and use materials beyond your text


and readings. As a
guide
you should include 15 references which may include academic sources,



government websites, and reports published by international
organisations
and consultancies.



Please place the word count for this assignment on the cover sheet. 10% more or less than the


stated word count is acceptable. Executive summary, table of contents, tables, visuals, references

and
appendices will not be included in the word count. The marker may, at their discretion,



discontinue marking if you go above 10% of the recommended word limit.

Answered Same DayDec 05, 2019MNG92210Southern Cross University

Answer To: Case Scenario: In the year 2010, 5 business graduates of Southern Cross University came together to...

David answered on Dec 26 2019
106 Votes
Expansion of ‘CHEERS’ to the International market
Student’s Name
Course Name
Date
RUNNING HEAD: EXPANSION OF CHEERS TO THE INTERNATIONAL MARKET    1
Executive Summary
Within the six years of the operations ‘CHEERS’ has been a successful company in Australia whose craft beer is liked by the Australian market as well as tourists from other country. The most potential counties in the option are: Brazil and India. Both the companies have the potential to have a good market and will help in boosting the sales growth of the company.
After t
he analysis and analysing the risk, India is suited to be one of the most potential country to launch its craft beer. Because of the intense competition, the company can emphasize on franchisee based mode to enter the Indian market.
EXPANSION OF CHEERS TO THE INTERNATIONAL MARKET    5
Table of contents
Contents
Executive Summary    2
Introduction    4
Analysis of Risk and opportunities    4
Regulatory activity    5
Brazil Market:    5
Indian Market:    7
Selected destination country    8
Marketing Strategy    8
Nature of the market of Beer Industry in India:    8
Human Resource strategy    10
Conclusion    11
References    12
Introduction
Globalisation is a complex process that has been at work, in various ways, and to different degrees (Clark et al., 2009). It is agreed that the debate around a consistent definition for globalisation has emerged from the field of international business. The definitional void stems from the fact that the word ‘global’ has been used in a variety of often contradictory ways (Clark & Knowles, 2003).
In the year 2010, 5 business graduates of Southern Cross University opened a new business of the Craft beer in the Australian market. With its differentiated varieties and excellent quality, the company was able to increase its sales and demand. Because of the differentiated taste and high quality, the pricing of the products was a little high than the other beers which are available in the market. After 6 years of operations, the company plans to expand its presence to the International Market and choose one of the two countries i.e. India or Brazil. Before entering the market it is important to analyse the risks and the opportunities in the market along with the potential to grow in the selected market.
Beer is likely to remain the drink of choice throughout many developed and developing markets. Beer is expected to fare well against wine and spirits, which are generally priced higher and often must be distributed through government outlets. As emerging markets develop economically and disposable incomes rise, consumers will increasingly demand more expensive international
ands. The demand of the beer is growing and is expected to grow further because of the shift in the preferences of young drinkers towards the craft beer and other form of beers.
Analysis of Risk and opportunities
Before selecting the market it is important to have a through analysis of the market and then select the market in which the company can enter. Considering the Beer industry, it can be seen that the despite of the declining per capita beer consumption and flat volume growth, the beer producers have highly benefited because of the growth in demand of the high value craft beers and foreign label beers. BRIC nations are considered to be the fastest growing market for the crafted beer and other consumer goods. This is because of the strengthening and growing GDP of the county because of which demand of the products are likely to increase.
In many countries consumers have demonstrated waning interest in premium beers, which typically consist of affordable pilsners and lagers, and have instead favored regional craft
ands. Major manufacturers have responded to this trend by differentiating products lines and introducing variants to their standard premium beer products. There are different flavours of the beer that are increasing the demand this includes different lime flavors, citrus and other fruit flavors, as have several
ews meant to mimic the look and taste of local craft beer flavors.
In mature markets where beer consumption is stagnant or declining, revenue growth depends on increasing sales of these new products, which typically have a higher retail price. However, average industry profit over the past five years has stagnated and is expected to represent 8.4% of 2017 revenue (the same as it was in 2012).
Major beer manufacturers that possess many
eweries with close access to major retailing markets can often achieve far greater profit margins than smaller, regionally-sourced
ewers of craft beer. Small beer manufacturers like CHEERS emphasize on targeting the niche market with new ingredients which are used by the
ewer and helps in putting new flavors to the profile.
Major beer manufacturers have responded to evolving consumer tastes, not only by introducing their own versions of craft-style beers, but also by aggressively expanding marketing campaigns for these types of beers. Brewers have also increased production of less-expensive, subpremium beers, which often have a crisp and highly ca
onated flavor profile, lower alcohol content and fewer calories.
Regulatory activity
The industry is subject to a high degree of regulation in terms of its product distribution and environmental impact. Although environmental regulations are generally laxer in developing markets,
eweries across developed regions have...
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