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  • Subject Name : Economics

Perusal on Augmentation of Business Internationally

Table of Content

Executive summary

Purpose

About Cooper Brewery & its background

Outline of the report and trend in the industry in US

Assumptions and Limitations

International business expansion strategies for Cooper Breweries

Entry modes into the other countries

Conclusion- Summary & Recommendation

References

Executive Summary of Cooper Brewery

As per IBISWorld which is located in Los Angeles, California, United States, a marketing research company monitored the current events in real time. Because of the global pandemic covid-19, IBISWorld has observed the moderate revenue decrease in breweries industry where restaurants, foodservice markets, bars are getting hampered, since the respective businesses and their operators are struggling to reach their final consumers. In a developed country like United States demand for such products are extremely high in spite of the emergence and consequences of covid-19 but on contrary due to continuing shrink in supply chain it is hampering the revenue growth of the industry. Big operators in the industry still have maintained their businesses in this pandemic where they are still doing the international shipments and have made the strong brand presence in every nook and corner of the world. Due to which the industry isn’t highly affected by covid-19.

In America companies in breweries industry manufactures and packs the beer & other type alcoholic drinks in bottled packages and canes. But as per IBISWorld the industry has observed the shift in consumer’s demand and preferences for higher quality brands since such are shying away from the respective industry.

The largest Australian company Cooper Brewery Limited is known for making a variety of beers. The company wants the expansion either in The Netherlands or Mexico. Now considering the above picture of brewery industry in America the further study will be carried out where the report will aim to suggest about the international competitiveness, strategies regarding the expansion into the segmented market, and FDI norms for the respective expansion based on the country.

Purpose of Cooper Brewery

In the time of globalization, the world has become a global village so big companies or groups are operating in multiple nations. No doubt globalization has been advantageous for companies but on the contrary it has imposed some challenges on them as well, one of the biggest challenges is "to think out of the box" which suggests that businesses should have something unrepeated and distinctive. Now being distinctive could be anything whether it is the promotion tactic or the pricing tactics or the distribution tactic or the product itself. However, there is an extensive pressure for being different or unique within the industry. Companies are not only diversifying or expanding their wings and businesses but it also helps in winning economies of scale & financial aids. Developed countries like Australia, United Kingdom, United States, are making their economies to grow. Developed nations are boosting up their number of industries worldwide which is making a country strong in financial context. Now this report aims to help Cooper Brewery Limited in order find out international competitiveness, strategies regarding the expansion into the segmented market, and FDI norms for the respective expansion based on the country.

The analysis of finding the advantageous countries for the business expansion will be based on the financial scenario of the country as well as the industry, profitability of the industry, consumption factor, lifestyle of the people and with some relevant shreds of evidence of the particular country and moreover it will focus on the current trend of brewery industry in the nation. The whole report will be designed with aim to search the best option for Cooper Brewery Limited to expand their business operations and perceive best approach for their internationalization.

About Cooper Brewery and Its Background

Cooper Brewery is the colossal Australian owned brewery; it is situated in the Adelaide, Australia suburb of Regency park. Cooper is recognized for producing or manufacturing wide variety of beers. The group is the largest producer of homebrew equipments as well. Due to multiple restrictions imposed by company’s own law, the part-exchange (selling) is tough. Competitors can not own the shares of Cooper brewery. There are numerous terms & conditions imposed by the group. The one of the major complication is that all the shareholders have a right of voting at the time of general meeting.

Cooper’s Response to Global Pandemic

Cooper group commits to produce and manufacture the highest quality beer. Being a sixth generation family owned company, it share the concern for community and also focuses on the health and safety of their employees, customers and community as their top priority.

The group has designed the stringent safety & quality assurance protocols across worldwide and wherever the production or operation is happening. They aim to assure highest possible standard of hygiene in manufacturing. The group claims that it is accredited to the internationally recognized Food Safety System Certification (FSSC) 22000.

They also claim that have not find any confirmed covid-19 case among their employees. Moreover the brand also claims that they are supporting the Government’s efforts to manage both the aspects the health & economic impacts during this global pandemic. Since Cooper is following the Government’s norms and guideline which has been issued which introduces the hygiene measures, social-distancing, and motivates the employee who can easily do work from home.

Since, every sector of the economy, people living there, customers, industries & moreover the supply chain is facing a hard. Cooper stated that they are shattered by the impact of covid-19 which is hampering our nation, especially the supply chain of essentials and the hospitality industry. The brand confirmed that it is working to assist their valued pubs, clubs, and restaurants as best they can do. Cooper is continuously manufacturing and distributing throughout their crisis, under the govt. Guidelines or safety measures. They claimed that they are confident to keep all the retail stores remain stocked.

Lastly the brand confirmed that it is working to reduce the current closures on not only those who are directly associated with them but also the big supply chain who relies on their industry. The brand says “You cannot simply turn off and then quickly turn back on a major brewery”. However it is foremost that all the retail chains and their partners continue to operate, while on contrary many countries are highly affected by this global emergency. Lastly they claims that their brand or group is confident for remain in operation, even though when there are stringent guidelines of govt. where one has to follow social distancing and isolation rule. Since the health and safety of their employees, community, and customers is their top priority which they always claims beside their above statement they promised to follow all the Government advice.

Outline of The Report

As stated by Cooper Brewery, that either they want to expand their business in The Netherlands or in the Mexico. Let’s have a glance on brewery industry in both the countries.

Present scenario of brewery industry in United States

A market research company IBISWorld which is located in Los Angeles, California, United States, monitored the current events in real time. Because of the global pandemic covid-19, IBISWorld has observed the moderate revenue decrease in breweries industry where restaurants, foodservice markets, bars are getting hampered, since the respective businesses and their operators are struggling to reach their final consumers. In a developed country like United States demand for such products are extremely high in spite of the emergence and consequences of covid-19 but on contrary due to continuing shrink in supply chain it is hampering the revenue growth of the industry. Big operators in the industry still have maintained their businesses in this pandemic where they are still doing the international shipments and have made the strong brand presence in every nook and corner of the world. Due to which the industry isn’t highly affected by covid-19.

In America companies in breweries industry manufactures and packs the beer & other type alcoholic drinks in bottled packages and canes. But as per IBISWorld the industry has observed the shift in consumer’s demand and preferences for higher quality brands since such are shying away from the respective industry.

Trends of The Industry (Between 2015-2020) & Expected Trend Between (2020-2025)

Companies and groups which are in the brewery industry manufacture malt liquor, beer & nonalcoholic beer either in bottle packages or canes. From 2015 to 2020, the respective industry has noticed the shift in demand and preferences for high quality beer brands & innovative style of beers are being ignored & avoided may be due to dislike, nervousness or anything else. While on contrary brewery industry would expect to experience rapid revenue gain in upcoming five years. The respective industry may influence likely a smaller share of customer’s demand for alcoholic beverages as compared to historically, since consumers keeps on changing and developing his tastes and preference for the their alcohol consumption across the wide range whether it is whiskey, beer, or wine. Due to competition from substitutes, such as wine, is anticipated siphon some demand from the respective industry. However operators are entering in the industry at slow pace as compared to the prior time in spite of rising revenue. In the upcoming five years the value of dollars is predicted to decline which will result in resurgence in the volume and value of exports later on it will also boost the industry’s revenue.

As a result, it seems quite feasible option for Cooper brewery to expand its business in Mexico and United States, as Mexico is situated in the southern portion of North America and the above study has observed the trends in United State as a whole. So cooper brewery can apply the above report or study in any location of United States. However the moderate growth trend has been seen for upcoming five years in the industry by IBISWorld in US.

Assumption & Limitation

Moreover in the current time where the global pandemic situation has reached at its peak, there is no guarantee that this may not affect economies further, hence there is no assurance or certainty that if the present situation has not affected the economy of Australia very much then it will still not affect reason being there is no certainty when the situation will fall at place. So, assuming that the global pandemic covid-19 will at least last for a year (end of 2020). Cooper brewery should expand its business in such a way where the brand can easily afford the uncertainty of happening which may occur and moreover it should have the risk tolerance capacity as well.

International Business Expansion Strategies for Cooper Breweries

Carrying out a deep due Diligence

  • Before coming on a global platform it is foremost to understand the whole impact on your present business.
  • Making a blue print of market segmentation analysis in order to assess if the product will survive or not.
  • Gap analysis should be considered against present products which will focus on the demand factor.
  • SWOT Analysis against the other companies or brands.
  • Studying about the market size and targeted audience.

Making a business plan

  • Every market is affected by economic factors, cultural factors, and market conditions and so on, so it is crucial to develop a localized strategy associated with the particular place, since it will help to achieve objectives set by the brand.
  • Defining short term plan, medium term plan and long term plan where Cooper should consider the cost and benefits of the product.
  • Creating a business model where Cooper should consider the factors like annual budget and marketing mix.

Establishing a beach-head team

  • Many big companies launches itself from the parent company and rapidly develop a folk team from scratch but this is time consuming and risky as well at the same time. Using expertise may lead to business to grow and hit the ground running.
  • Some organizations hire the expertise team to manage its activities.
  • However outsourcing the folk team to establish the financial infrastructure may lead organization to achieve its objectives.

Product Readiness

On the basis of product gap analysis taking the necessary steps to achieve high impact product differentiation, reviewing the government’s obligations and regulations to assure that certifications are attained if required, determining the demand of localities residing in a particular area, getting a patent and trademark review done, getting the quality check of the product based on norms of folk market, studying about the logistics part and supply chain thing in the folk market.

Organizational Readiness

It talks about the culture differences whether it is a local language, tastes and preference of people, regulations or any other policy and procedures which has to be implemented in an area. Engaging the employees who have different background in cultures is a challenge for the organization. Managing payrolls and human resources functions, executing the business strategy, creating policies and procedures which comply with folk requirements, understanding local IT infrastructure which is compatible for the present business, are foremost factors for organizational readiness.

Cooper brewery can establish a “Go-To-Market” strategy

The effective marketing of any product needs a comprehensive strategy which addresses sale strategy, delivery time, marketing tactic and pricing tactic which distinguish the brand from its competitors in order to attain its objectives in terms to acceptance of the product and revenue growth.

Cooper brewery should design a plan where the brand consider the marketing plan and KPIs (Key Performance Indicators), the brand should also study about sales model where it decided the product will be sold directly to the consumer or indirectly, who will be the distributor, evaluating the pricing model and so on.

Understanding the Legal Readiness

Some countries are recognized as highly stringent in their laws and compliances. So it is very important to understand the legal processes so that Cooper brewery can minimize the commercial risks. Some nations have stringent requirements that necessitate legal documentation before entering into the market and operating into the respective industry. Cooper brewery should focus on creating localized commercial agreements & reviewing industry in respect to specific laws and regulations to ensure the compliance.

Creating a blueprint on budget

Cooper brewery should design a real-time budget to actual reporting with variance analysis.

Entry modes into the other countries

Considering the present global emergency covid-19, Cooper brewery should enter in United States by different modes. Such are:

  • Exporting
  • Greenfield Venture
  • Partnering and Strategic Alliance

Exporting is the easiest mode to enter in an international market, therefore Cooper brewery should begin its international expansion by exporting first. Advantage of exporting is fast entry and minimal risk.

Partnering and Strategic alliance refers to the contract between two or more organizations stipulating that the involved companies will cooperate in a certain way to achieve common objective and aim. The advantage of partnering is shared costs reduce investment needed, reduced risk, seen as local entity by the folk people.

Greenfield Venture has local market knowledge, however it can be seen as insider who employs locals or folks and it has maximum control.

Conclusion- Summary & Recommendation on Internationalisation Proposal Report

Considering the financial situation of Cooper brewery and the condition of covid-19 in Australia & moreover considering the statement of Cooper brewery on global pandemic covid-19, where the brand mentioned the below key points:

  • They have designed the stringent safety & quality assurance protocols across worldwide and wherever the production or operation is happening.
  • They aim to assure highest possible standard of hygiene in manufacturing. The group has also claims that it is accredited to the internationally recognized Food Safety System Certification (FSSC) 22000.
  • They also claim that have not find any confirmed covid-19 case among their employees.
  • The brand also claims that they are supporting the Government’s efforts to manage both the aspects the health & economic impacts during this global pandemic. Since Cooper is following the Government’s norms and guideline which has been issued which introduces the hygiene measures, social-distancing, and motivates the employee who can easily do work from home.

So assuming that the global pandemic covid-19 will at least last for a year (end of 2020). Cooper brewery should expand its business in such a way where the brand can easily afford the uncertainty of happening which may occur and moreover it should have the risk tolerance capacity as well.

As a result, it seems quite feasible option for Cooper brewery to expand its business in Mexico and United States, as Mexico is situated in the southern portion of North America and the above study has observed the trends in United State as a whole. So cooper brewery can apply the above report or study in any location of United States. However the moderate growth trend has been seen for upcoming five years in the industry by IBISWorld in US.

In the current time where the global pandemic situation has reached at its peak, there is no guarantee that this may not affect economies further, hence there is no assurance or certainty that if the present situation has not affected the economy of Australia very much then it will still not affect reason being there is no certainty when the situation will fall at place.

Recommendations

Moreover Cooper should adopt multiple entry modes considering the present situation. Where the brand should choose; Exporting, Partnering and Strategic Alliance, Greenfield Venture as the options for entry in United States.

References for Internationalisation Proposal Report

Lorenzi, V., & Sørensen, H. E. (2014). Business Development Capability: Insights from the Biotechnology Industry. Symphony. Emerging Issues in Management.

"What, Exactly, Is Business Development?". Forbes. Retrieved 2015-11-09.

Ploegmakers, Huub; Beckers, Pascal; Van der Krabben, Erwin (2015). "The impact of planning intervention on business development: Evidence from the Netherlands". .

Poruthiyil, Prabhir Vishnu (2001). "Weaning Business Ethics from Strategic Economism: The Development Ethics Perspective". Journal of Business Ethics. 

Enderle, Georges (2010). "Wealth Creation in China and Some Lessons for Development Ethics". Journal of Business Ethics. 

Su, Hwan-Yann (2001). "Business Ethics and the Development of Intellectual Capital". Journal of Business Ethics. 

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Economics Assignment Help

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