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.
You, being a recent recruit as an International Operations Manager at CHEERS, have been asked to prepare a report (2500 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.
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.
For this assessment task, you are expected to demonstrate your understanding of the following:
- How to assess country potential through an analysis of risks and opportunities. Risks that should be emphasised (but not limited to) in particular are those relevant to brewing businesses such as cultural and legal aspects, government regulations and financial/currency risks. Opportunities may include (but not limited to) market size, economic growth and trade agreements between the 2 countries.
- How to identify the best market entry strategy based on the business type and host country business environment (this includes the level of economic integration between home and host country, the political and legal environment of the host country). The recommended strategy must be well justified based on all the factors (e.g. organisational goals and objectives, resource requirement, degree of control required, risks in the target market, etc.) to consider when deciding entry strategy.