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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...

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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 XXXXXXXXXXto $ 30 million in the financial year XXXXXXXXXX. 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

Solution

David answered on Dec 26 2019
84 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 the 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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