Entrepreneurial Marketing Strategies: The Essay On International Growth.

Discuss about the Entrepreneurial Marketing Strategies The Growth Of International.

The industry that has been selected is tea which is a part of the beverage industry.  For a new venture to move into the global market there are a number of aspects that has to be considered by the entrepreneur. Strategic management decisions are made by the entrepreneur to decide in which country they can extend the business in order to generate profit making revenues (Hill & Schilling, 2014). Out of the five countries selected the company had chosen to expand to Australia as the political stability and the support from the government is important (refer to appendix one to view the PEST-C analysis). The industry that has been selected to conduct the assignment is Tea and the country of expansion is Australia. The company will not only cater to the end consumers but will also cater to the Business2Business sector as well, for example: cafes, restaurants, tea corners etc. As the company is a medium to small scale business it will choose the options of expansion keeping in mind the resources and capabilities of the company as well as the opportunities in the business.

The company that has been selected is Just Tea, the company is situated in Ontario, Canada. The company is a new venture and has started the operations of the business on 2013. The company distributes premium quality tea to the customers. As the organisation is growing in the home country, the entrepreneurs have decided to expand the business. The organisation operates on the basis of the triple bottom line business model.

Objectives of the company:

• To proved the customers with high quality tea
• To educate the people regarding the qualities of tea consumption
• To expand and grow the business in international market
• To establish a strong online presence

The highest position is that of the owners and then the mangers who look after the other employees in the company. The structure is in hierarchal form. There are just 30 people including the two owners who work for the company.

The stakeholders are divided in two categories internal and external: the major stakeholders of the company are the customers and the employees. In the external environment the Government play an important role (refer to appendix 2) for the diagrammatic representation.

The operations of the company are surrounding the distribution of tea in both the B2B as well as B2C customers. There are more than 25 varieties of tea that the company have in stock and the price range of the items are also varied form very high to medium.  From organic, herbal, black, white as well as Early grey.

Management Of The Company

The company is influenced by a number of environmental factors that influence the business these factors are divided in to the macro and micro factors. The micro or the internal factors are under the control of the company on the other hand the macro or the external factors are not under the control of the company therefore these are the aspects that impact the business venture in globalization (Moran, Braaten & John Walsh, 2013).

Some of the factors of globalization that impact the business venture are:

• The situation of the industry: the industry prospect in the country is important to analyze as it determines the scope of the business.
• Global economy is another important aspect that the company should keep in mind, the inflation rates, exchange rates etc that will impact the business are important for the business to analyze.
• The political, economical, societal, technological, environmental and legal aspects of the condition of the country of expansion impact the business venture (Wheelen, Hunger, Hoffman & Bamford, 2017).
• The relationship between the host country and the new country in the international relation has an impact on the business decisions as well (Wheelen, Hunger, Hoffman & Bamford, 2017).

With the help of Porter’s five forces analysis the potential of the company in Australia will be determined. Porter’s analysis takes in consideration the industry factors that impact the business and expansion in a new country (refer to appendix 6).

Intensity of competition: There is competition in the beverage industry which is an indication that the industry has potential of profit and the people accept the product in the industry (E. Dobbs, 2014). The industry is dominated by Cappuccine Australia, Tease, Teascapes etc. therefore it can be concluded that the intensity of competition in the industry is high and is growing.

Threat of new entrants: the industry in Australia is governed by the food and beverage ministry of Australia. There are easy trade regulations in the country which makes it easy to do business for foreign investors. The capital investment required in the industry is also not very heavy as well as the infrastructural requirement is also not a lot hence it can be concluded that new organisations can set up their business in the tea industry with limited barriers in business (Meissner & Wulf, 2013). There is also an Australian tea association which is a regulatory body in the industry (Australasianteaassociation.org (2018).

Power of the suppliers: There are a number of suppliers in the industry and therefore the powers of the suppliers are low. On the other hand it can also be said that the switching cost of the suppliers is low for the companies.

Power of the buyers: As discussed above there is intense competition in the Australian tea market this fact indicates that the buying power of the customers are high, if they do not like the product or the services of a company in the industry they can easily move on the other with low or negligible switching cost.  

Threat of substitution: The threat of substitution is from other beverages excluding the alcoholic beverages in the country. There is a large market in the country for coffee and organic coffee.  

Products And Services

Therefore it can be concluded that the country has a lot of opportunities in terms of the government support and infrastructural facility in the industry. The organisation is a new venture hence the suppliers play a large part in building the business are there are a number of suppliers in the industry it is beneficial for the company as they can bargain with the suppliers.

There are several modes of entries in to a foreign market some of the most common options are: Export, Direct Investment, licensing, joint venture or partnership. Depending on the resources and capabilities of the company the management selects the mode of entry (Brush, 2013). The company has selected to invest directly as the management does not want to include any third party in the business process. There are provisions and support from the Australian government to directly invest in a business from a foreign (Hernández & Nieto, 2015). The company can open a small shop in a location which is both feasible for customers as well as business clients to visit. The first step in this process that the company has to take is obtaining a business visa. In order to take the first step the management has to arrange appointment with the department of home affairs. There is a number of legal steps that has to be undertaken in order to open the shop but (Wild, Wild & Han, 2014).  

This mode is selected because the company wants to remain independent in its operations; the Australian government is supportive of foreign investment as they deem to be one of the methods of revenue (Business.gov.au, 2018).  The major disadvantage of the situation is high capital investment as well as high legal barriers in the process. Furthermore it is a time-consuming process as legal challenges take time to get resolved (Laufs & Schwens, 2014).

A PEST-C analysis has been provided in appendix 1. The company has chosen to proceed with Australia as the country to expand as the country is most politically settable among the choices as well as the rigidity in the country is low, as the mode of entry that has been selected in the country is direct investment as the company does not wish to do business. The Australian government has easy procedures of establishment and encourages trade in the economy as well as foreign investment. The cultural aspect of both the country are also similar( refer to appendix 5) apart from stark difference in the long term orientation, the countries have more or less similar approaches to the cultural aspects that is prevalent in the society.  

Industry Analysis

Following is a detailed PESTEL analysis of Australia which further explains the reason for choosing this country over the others (refer to Appendix 3 in order to glance the PESTEL Analysis in a tabular from)

Australian politics is stable and there is lesser number of radical political movements in Australia. The intervention of the government in economic activities, and the number of political activities that create disruption in the economic activities can be termed as the political factors that influence the business activities of a company (Maley, 2015). In Australia the government has three distinctive divisions. The legislature comprises of the parliament, the Queen and the representatives of the people. The executive is the body that carries out administrative roles and comprises of the Governor General, the Prime Minister and the Ministers (Goodnow, 2017). The Judiciary comprises of the High court and other federal courts. So it can be said that the system is very democratic and systemized and there is hardly any scope unjustified interference in the economic activities of companies, therefore it can be termed as a safe destination for investment from both foreign and domestic companies (Grimmer & Grube, 2017). Therefore it would be easy for the Canadian tea company to engage in fruitful business activity in the country.

Australia is economically stable and considered to be among the developed countries. The rentals of business places and are quite high in Australia. The cost of properties in Australia is also high (Wood & Ong, 2017). Therefore it is evident that any company endeavoring to establish business in Australia must be investing a large amount of money in the property and assets they buy. Even if the property is rented the recurring cost of the rents paid every month is very high. The cost of living in the Australian cities is lesser than other world class cities if compared (Groenewegen & McFarlane, 2014). The economic growth rate of Australia is higher than many of the other developed countries such as UK, France or Germany. Therefore the company will have a very stable business growth if the business is run with proper managerial decision making and ethical considerations.

The working force in Australia is young, educated and many ways cheaper than other developed countries. According to the Hofstede cultural model, Australian people are highly result oriented and they consider success and growth to be very important aspect of leading a successful life. Australia is producing a large number of engineers, computer specialists, and other technical expertise professionals which will help the incoming foreign companies to establish business and grow (Meagher & Goodwin, 2015).  The Australian society is driven less by class divisions and casteism. More practical considerations and result oriented activities are preferred. Therefore the Australian companies are having diverse workforce which contribute to the company’s growth and innovation in the business processes (Meagher & Goodwin, 2015). The Australian society produces a high demand for coffee, tea and other hot beverages. This is mainly due to the highly socializing attitude of the Australians.

Impact Of Globalization On The Business Venture

Australia being a developed country is advanced in technological aspects as well. The technological progress of Australia has resulted in many strong businesses which are technology driven. “The Commonwealth Scientific and Industrial Research Organization” also known as the CSIRO is one of the organizations that provide technological support to the country and helps in various research projects and development plans (Henriksen, Dillon & Ryder, 2015). The Australian government has historically provided much boost and encouragement to the technological factors in the country. Australia also has a large number of engineers and technical experts which provide a strong work force base to the industries of the country Macdonald, 2015). The foreign companies which are coming to establish business here would not find it difficult to establish business here as there is abundance of technology and skilled workforce. This is also true in the case of the tea industry which will  be needing technical skills to run the plants where the total process will be going on.

The climate change phenomenon impacts the industries that are based on firming and natural products. Intense change in the environment affects the natural produces and hence there are drastic changes in the amount of crop produced and the quality of the crops (Martin, 2017). The tea company is dependent on the sourcing of the raw materials from the tea plantations. Therefore the country is dependent on the quality of trea produced in the country and the amount as well.  

Australia is greatly strict about environmental considerations when giving permission to a new company to start and operate business within the territory of the country. “The Environment Protection Act of 1974 and 1978” has provided some frameworks which need to be followed to conserve the environment (Fraser, Dunse, Krummel, Steel & Derek, 2015).

Solid erosion is a problem in Australia and therefore the company needs to ensure that the raw materials are supplied from the plantations that are following the standards and frameworks provided by the government.

The legal aspects include the Australian framework of legal obligations that are needed to be fulfilled by any business operating within the country (Baresi, Vella & Sipe, 2015). The companies have to follow strict policy against discrimination of age, gender and disability. There is minimum wage standard and working hours within the country is fixed. In Australian scenario the contracts are not to be essentially documented, even the oral agreements are considered. “Australian Competition and Consumer Commission” ensures fair competition among the companies. “The Australian Consumer Law (ACL)” defines the rights of the consumers, product safety and other aspects of doing business in the country. A company must be knowledgeable of these legalities before finally engaging in business activities in Australia. Any criminal activity is duly prosecuted (Findlay, Odgers & Yeo, 2015). If there are import and export activities included then the company has to follow additional United Nation Frameworks for  the similar activities

Mode Of Entry

The company has the resource and capabilities, market for the business, support from the government as well as a concrete idea regarding the mode of entry thus making sure the success of the venture. Some of the issues in the process that the company can face are the legal complexities that are associated with venturing in a new country. The company also does not have a concrete marketing plan which may also be one of the hindrances in the process of success.   The following strength and weakness analysis of the organisation will explain the process better.

The knowledge regarding the industry, among the owners of the company is the major strength of the company.

The human resource of the organisation is also concrete and it will impact the prospect of the business.

The products that the company has provided are of premium quality and the price range that is set varies to a large range.

The varieties of the products are also one of the major positive aspects of the company. The variety in the quantity can be customized by the customer as the tea are not packaged but are sold loosely.  

The company also has resources in terms of contacts both in the host country as well as in the new country. This aspect will help in the smooth operation of the business

Lack of business experience of the owners of the company may lead to ambiguous and non-strategic management decisions

As the company is new there is limited brand recall and operations compared to leading players

The scale of operation is really small and thus making the reach of the company restricted to a small area of distribution of the product.

The decisions of the management regarding packaging and handling of the products is also not very planned

The government of Canada is supportive and encourages trade and business in the country similarly the political stability and the presence of the supportive government is a major opportunity for the company.

The technology usage has increased phenomenally in the past decade therefore the company has the liberty of expanding the online business after establishing a shop in Australia.

Technology can be incorporate in the process of CRM in order to keep up with the valuable relationship with the customers.

The company has the opportunities to expand the business within Australia

Threat 

Byron Bay Tea Company, Koala Tea, Tea drop, Yarra Valley Tea Company, Madura Tea are the direct competition.

Analysis Of The External Business Environment

The substitute of the tea is coffee which is also popular among the population of the selected country.

There are many tea companies that have been doing good business in Australia. Some of these companies are Byron Bay Tea Company, Koala Tea, Tea drop, Yarra Valley Tea Company, Madura Tea and many others. These are some of the tea companies which are considered the largest among the Australian Tea makers. The company which is going to be established and planning expansion will start business from smaller level. Therefore the competitors are smaller companies like Cappuccine Australia, Tease, and Teascapes. These Tea companies provide good quality tea in reasonable rates. There are innovative tea products in Australia recently. There are flavors which are experimental and the packaging is made attractive and graphical. They all source their tea from best plantations around the region (Byerlee, 2014).

The primary competitors are those companies which produce similar products and run along similar revenue and business goals. Cappuccine Australia, Tease and Koala Tea are the primary competitors. The secondary competitors are those which produce similar products but  have revenue goals which are different. Companies like Byron Bay Tea Company, Tea Drop, and other companies are the secondary competitors. The tertiary competitors are those which have substitute products but they target the same customer base and the same target group may choose the substitute products.

The strength of the competitors is that they are already established in Australia, market and they know the Australian market very well. This helps them in targeting the Australian customers in a very effective manner.

The weakness of the competitors are the  fact that their experience is limited to Australian context however this company has experience from overseas and they can use it to do business differently in Australia.

Human resource is one of the major components in the internal business environment it is the backbone of the factions of the business and is responsible for day to day operations  (Vance  & Paik,  2014). The company will require human resource to run the shop and will also require training and skill development to communicate and deal with the clients. With the help of ERPG framework the human resource can be analyzed. There are four prospective approaches in this framework ethnocentric, polycentric, regiocentric and genocentric (Shoham, Rose, & Albaum, 1995). The approach that the company seeks to implement in human resource is genocentric as it will ensure the best of both the ethnocentric and polycentric approach.  The management of the company will make efforts to understand the similarities and the difference in the home country and Australia, therefore understanding and comprehending with the diverse culture among the workforce which in turn helps in operating the business in foreign land better (Vida  & Fairhurst, 1998).  

The company will require a store manager and one person to look after the sales. At the beginning the operations will remain low scale hence the human resource requirement is also low  (Vance  & Paik,  2014). There is no potential of cultural conflict in this case as the people will be appointed form Australia and will be from the place where the store will be situated (Vance  & Paik,  2014).

As mentioned above global economies play an important role in international business. Foreign exchange rates are the conversion of the currency from one country to another. The Canadian Dollar is a little higher than Australian Dollar (Gillespie & Riddle, 2015). The value of the currency is based on the market forces in terms of trade, geo-political aspects, investment in the market etc (Gabaix & Maggiori, 2015). Factors that impact the demand and supply of the exchange rates are as follows: import and exports rates of both the countries, money supply in the economy, rate of foreign cash flow (Gabaix & Maggiori, 2015).

The taxation and the tariff on the business are one of the major economic barriers to the company, the organisation has to keep up with every legal aspect associated with tax and tariff in order to initiate and operate in the foreign country.

   The rate of inflation in the global economy impacts the business, during the global depression that occurred in 2008, there were a number of businesses that had faced downfall during this time. The rate of inflation in both the countries will impact the business venture (Gabaix & Maggiori, 2015). This is because there are a number of investments that the company requires to make in the process of expansion.  The rate of inflation reduces or increases the cost of services and the cost of labour in the market. Value of fixed assets can also rise due to increased rate of inflation.

The balance of payment of a country establishes the transaction of the country with the international market (Gabaix & Maggiori, 2015). This is essential aspect of any country as it depicts the rate and encouragement of the country with foreign investment.

As the company has planned to invest directly in to the foreign land they may find it difficult to get investors in the project as the company is new and they have no goodwill or credibility in the market therefore the company has to have a back up of strong business plan to convince the investors (Tarut? & Gatautis, 2014).

As the industry is tea, and the major suppliers of the company are from various parts of India the process is time consuming and this may be one of the major issues with the investors.  The investors may want to have suppliers of their own choice and this may result in a conflict with the investors.

There are various risks associated with tea industry globally. Tea is a very valuable crop that has contributed to the development of many regions worldwide (Stern, 2013). However more recently there are various challenges that the industry faces globally. The typical challenges faced by the tea industry include the problem of deforestation, water problems, employee shortage and problems related to advanced farming (Tate, Ellram, Schoenherr & Petersen, 2014). There are research units in various parts of the world that are helping the tea plantation in making their produces better and increased in amount (Savrul, Incekara & Sener, 2014). The workers are also educated in various companies so that the measures needed to face such challenges in the industry can be mitigated (Savrul, Incekara & Sener, 2014). The primary problem associated with the industry is the problems of lesser payments to the workers who work in the fields. The plantation owners pay les to the workers even if the company which is buying the raw material from the owner is sufficient and enough (Franks et al., 2014)

Tea is considered to be one of the most popular drinks of the world. However in Australia people have a mixed choice and many people prefer other beverages such as coffee, herbal tea and other varieties. This company will mainly focus on producing tea (Tate, Ellram, Schoenherr & Petersen, 2014). This may be considered as a risk that the Australian population may consume more coffee than tea in the days to come which will result in the declination of sales of the company. The company will have to do a very efficient and comprehensive market planning to establish goodwill in the market. The company must experiment with the flavors of the tea so that the people of Australia are interested in buying and tasting the products of the company (Franks et al., 2014)

Other risk factors include, indigenous companies creating strong entry barriers, legalities in Australia making it difficult for the company to operate, foreign target customers may not be convinced by the marketing techniques of the Canadian company, there might be a cultural difference and problem in approach (Tate, Ellram, Schoenherr & Petersen, 2014).

In order to understand the issues of the business, it is important to analyze the marketing mix of the company.

Product: The product that the company will supply to the customers and clients is tea. The company will specialize in Indian tea. The company will have an assortment of the choice depending upon the quality and the price of the tea leaves (Armstrong, Kotler, Harker & Brennan,2015). The company operates both on the B2C as well as B2B sectors. The regions where the tea will be supplied from are Assam, Darjeeling and Karnataka. The product range will be like: black tea, white tea, organic tea, green tea, earl grey tea, oolong tea (Armstrong, Kotler, Harker & Brennan,2015).

Price: The price of the product will vary as the quality of the tea determines the price; the starting price will be low as the 100 gm for 10 AUD.  And the price range will go up to 50 AUD for 100 gm of tea. Depending upon the demand for the choices that the people make in the future the stock of the variety will be refreshed and this may increase or decrease the range of price (Armstrong, Kotler, Harker & Brennan,2015).  

Place: The place where the shop will be established is in Sydney as it is both business as well as the tourist hub of the country.  The exact location of the shop will be decided based on the price of the land and the shop as well as market research which will help the company to determine the area of demand (Armstrong, Kotler, Harker & Brennan,2015).

Promotion: The company will use the internet and digital medium in order to promote the products and service in the new market. With advancement of technology and increased use of technology by common public digital marketing has evolved and has become one of the most effective and efficient methods of promotion. Especially for the small and medium size organisation, who cannot invest a lot of capital in promotional activities like traditional television advertisement or print advertisement (Hallbäck & Gabrielsson, 2013). The company will only use digital marketing platform as this would ensure the reach of the company in appropriate target market. As a new organization in new country traditional methods of promotion will not be effective therefore social media will be focused upon in order to reach out to the target market (Hallbäck & Gabrielsson, 2013). The organisation already has their own website which will issue some promotional codes and discounts during the launch. The social media platforms like Instagram, Facebook and Twitter will be used in order to ensure that the company communicates with the end customers (Hallbäck & Gabrielsson, 2013).  

The marketing issue that has been associated with the business venture is that the company does not have a target market base; the company has to establish the brand from scratch and in order to do so the promotional activity that has been stated is not enough. As a small organization the company is restricted to some aspects. As a new company in a new country the organisation will not be able to establish leads and contacts therefore the promotional aspect will be restricted (Armstrong, Kotler, Harker & Brennan,2015).  

The pricing strategy of the company is also not concrete as the company has not established the target market. The company should device a marketing plan in order to overcome the issue of lack of resources of a small and medium organisation in order to increase their efficiency (Armstrong, Kotler, Harker & Brennan,2015).

The marketing issue for a new organisation like this is to ensure strategic communication in the process of marketing, to bring across the unique selling point of the company in order to make sure that the target market is an aware of the products (Hallbäck & Gabrielsson, 2013).

It is a challenge for a new organisation to choose the right marketing platform this is due to the lack of experience in the market. The company has chosen digital marketing as the platform as it is effective for a new organisation and also does not involve a lot of capital (Hallbäck & Gabrielsson, 2013).

The company is not a manufacturing organisation therefore the factors influencing production will not impact the business. On the other hand, the distribution channel of the company is not complex and the factors that will impact the distribution activities are: transport time and transport cost as the tea will be imported from India the company therefore transportation is a major aspect that the company has to consider while evaluating the distribution process (Arya & Mittendorf, 2013).

Inventory and warehouse: The company will stock the inventories in the shop as well as the venture is small there will not be large amount of inventories therefore saving money of warehousing. The organisation will use the JUST IN TIME approach in order to keep track of the inventories (Seelig, 2017).

Type of goods: The type of product that the company will stock and distribute influence the decision made by the company that is associated with distribution channel. The company should reduce and improve the time consumption in transport as the product that the company offers if perishable in nature (Arya & Mittendorf, 2013).

Internet is the best tool in today’s day world to conduct business overseas and continue marketing, operations and management processes at the same time (Suriyapperuma, Yajid, Khatibi & Premarathne, 2015). The big companies use professional marketing tools to use the internet in the most efficient and most comprehensive way in order to get maximum results (Tarofder, Azam & Jalal, 2017). The company has its own website which is used both for the purpose of marketing and the purpose of selling the products online. However the company has not yet introduced selling through website in Australia but it is successful in selling through website in Canada. The company uses internet very efficiently in order to market the different flavors that it has innovatively introduced in the product line up. Face book, Twitter, and YouTube marketing is used in order to reach more people. The company has also opted for search Engine Optimization in Canada which has resulted in the company being listed in the top 10 position when related keywords are searched. The Search Engine Optimization has been helpful in understanding the number of people searching for tea products and how many of them are buying the products. The company also uses CRM strategy to manage the customer profiles and understand the various types of customers who are buying the product.

Apart from that the company uses internet for internal and external communication. The company has its own mail id in its website name, which is used for internal communication as well as external communication. The company also has its own App in Canada which not only helps the company in selling and promoting the various products but also connecting with the customers and taking their feedback.

In terms of organization structure the company has already developed a ERP system that includes most of the organizational, financial and management aspects needed to be managed. The ERP (Enterprise Resource Planning) software is developed and designed in a way that it is connected through internet so that the global business can be carried out efficiently. Various financial matters such as transaction and expenditure throughout the business organization is recorded in the ERP system. The ERP gives access to the departments and employees as much it is needed and the top management has access to the total system. There are various other ways internet is used in the organization to give desired improvements to the business.

The process of using internet is also cost effective and fast (Teerakapibal, 2017). Therefore the company has been implementing managerial changes through the usage of internet as well. The company has an efficient system of management through digital media, in which it implements policy changes and intimates the team about the new system through internet messaging applications. The internet has helped the company in globally expanding the business

The range of weight is from 1-5 one being the least (Power, 2008)

Factors of success	Feasibility	Impact	Reliability	Total
Mode of entry	2	2	3	7
Pestel factors of Australia	4	5	5	14
Product quality	5	5	5	15
Resources	1	4	2	7
Distribution channel	3	2	2	7
Opportunities in the market	3	2	1	6

The company should focus on the mode of entry as direct investment is a process that can be very impactful if it is organized and strategized properly. The company has to establish a connection in the legal front of Australia, for example a legal consultant or a lawyer in order ensures that the company is aware of all the legalities in the country (Power, 2008). There is a number of  legal procedure that the company has to follow in order to achieve the business visa and also take a shop on rent in order to conduct the business (Business.gov.au, 2018).

As discussed above it can be easily said that the PESTEL analysis of the country is supportive of the venture, as the government of the country encourages trade and the two countries i.e. Canada and Australia have good international relations as well. Therefore the company should focuses on the scope and opportunities in the macro environment to establish and grow the company (Power, 2008).   

Because the resources of the company are limited the management should come up with a concrete plan of action.

The company should make sure that the time taken in the process of distribution and availability of the product is low (Power, 2008)

Conclusion 

It can be concluded from the above discussion that the country that has been chosen (Australia) to venture out of the host country (Canada) can be successful if the company follows the internal strengths and resources to overcome the challenges and threats. The organisation has the opportunity to expand the business in the Australian market with the help of the website which will save cost of infrastructure in the initial period as well.

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