Executive Summary
Companies that want to maximize their profits or attract additional customers can identify new markets in foreign countries. However, leaders should conduct detailed analyses to understand the potential opportunities for maximizing results and possible risks that can affect performance. The discussion below examines how CHEERS has recorded notable gains in the Australian beer sector. After analyzing the aspects of the Indian and Brazilian markets, this report goes further to suggest Brazil as the best choice for pursuing the anticipated business aims. This new destination presents numerous opportunities that can result in improved profitability while at the same time minimizing the barriers associated with new startups. The concept of exporting beer products to the targeted market will make it easier for this company to achieve positive gains within a short period. The involvement of the human resources team will make it possible for CHEERS to overcome cultural and social obstacles that might exist in the Brazilian market. The presented insights will become a powerful model for investing in a foreign country and eventually creating appropriate logistical systems that have the potential to deliver the intended objectives.
Introduction
The success of CHEERS as a small Australian brewer was attributable to the founders’ ability to focus on the demands of the potential customer and the ability to offer a different experience. Within the first six years, this company managed to record an increased turnover from 2.5 million to 30 million US dollars. The saturation of the Australian market meant that there was a need to consider new regions to maximize profits and make this firm more successful. The consideration of Brazil and India presents an ingenious move that has the potential to improve performance and make this firm more sustainable. The purpose of this research paper is to analyze the unique opportunities and risks associated with these two nations and recommend the best country that can deliver the intended aims and make this organization more competitive in the beer industry. The discussion will go further to identify and justify the most appropriate entry mode, marketing strategy, and human resources practices that CHEERS needs to implement in Brazil.
Risks and Opportunities
India
India presents a new opportunity for CHEERS to launch its business practices successfully and achieve the intended goals. The existing political conditions are favorable since there is a stable government and systems that protect local and foreign investments. Majority of the leaders’ present evidence-based policy proposals that can improve economic performance and promote international cooperation. The Australian-India business ties have proved essential and capable of supporting the demands of businesses and investors (Sharma, 2019). A bilateral relationship exists whereby Australia has continued to benefit significantly from the rapid growth of India’s economy. Similarly, many Indian students have been finding new academic and professional opportunities in Australia within the past two decades.
The economy of India has been performing positively over the past few years. For instance, its 2020 gross domestic growth (GDP) is expected to reach a total of 2.9 trillion US dollars (Sharma, 2019). Experts believe that positive results will be recorded in the coming days that will favor both local and foreign businesses (Sharma, 2019). Similarly, more Indians have transformed their ways of life due to the increasing levels of economic empowerment and social changes. Sharma (2019) acknowledges that the number of young citizens who prefer both alcoholic and non-alcoholic beverages has been on the rise in India. The popularity of beer in the country explains why it presents an additional opportunity to CHEERS. Being one of the technological hubs in the wider Asian region, this country has produced advanced systems that can support the production, packaging, and transportation of various beer products to the customers. Such innovations can make it possible for CHEERS to improve its operations, maximize production and eventually achieve the intended goals. However, it would be necessary to appreciate the fact that a caste system exists in this country whereby people are segmented into different social classes. This knowledge can inform a superior entry model that can eventually deliver the intended results and make CHEERS more profitable.
While the economy of India has been performing positively, the Indian Rupee remains a weak currency in comparison with the American dollar. However, the government implements appropriate fiscal policies to reduce the chances of inflation and keep the economy sustainable. Additionally, the census of 2018 indicated that India had a total number of 1.35 billion citizens (Sharma, 2019). This figure is a new opportunity for CHEERS to achieve its goals since its incomparable with Australia’s population of fewer than 30 million citizens (Sharma, 2019). Chances of getting more potential consumers of CHEERS’ leading alcoholic drinks will increase significantly in this country and maximize profits. There is also an untapped rural population in this country that can support this company’s business model. However, the majority of these individuals belong to the lower classes and lack access to job opportunities.
However, there are specific risks that might make it impossible for CHEERS to record significant results in this market. For instance, issues to do with environmental protection are critical in this country. Environmental protection laws have become mandatory for small-scale and large-scale companies operating in India. CHEERS lacks an established sustainability program that can make it profitable in this foreign market. In 2018, the Food Safety and Standards Authority of India (FFSAI) introduced a new policy aimed at regulating beer to ensure that the alcoholic content was permissible and safe (Sharma, 2019). This new law would apply to all alcoholic beverages produced locally or imported from different parts of the world. Additionally, new campaigns emerged that were aimed at protecting the public by illegalizing reckless and drunk driving behaviors. Before deciding to invest in this country, the owners of CHEERS should consider the relevance of these specific opportunities, risks, and realities of the Indian market. Such an approach can inform an evidence-based strategy and make it easier for the founders to achieve the anticipated goals.
Brazil
Brazil has become a favorite destination for many companies since it presents numerous opportunities that can increase chances of improved business performance. Being a middle-level economy, this country has a stable political system that promotes democracy and makes it possible for more citizens to pursue their economic goals. However, cases of corruption remain high since the Corruption Perceptions Index of Transparency International ranks 105 out of 180 (Grivoyannis, 2019). Companies planning to win tenders should liaise with those in power to achieve their business aims. The fact that it is one of the leading economies in terms of GDP means that it can sustain the performance and growth of emerging or small business firms. The unemployment rate remains high in this country at around 11 percent (Grivoyannis, 2019). Brazil remains a leading producer of iron ore, sugar cane, and crude oil. These resources continue to make it a competitive country in the global arena.
Brazil remains socially and culturally diverse due to the presence of many people from different regions and territories. It also has an estimated population of around 200 million citizens (Grivoyannis, 2019). Many children and women lack adequate health services and some are even homeless. Cases of discrimination based on skin color, race, or gender remain common in different societies across the country. Fortunately, the middle class is recorded increased levels of social mobility. This development means that they will be willing to purchase expensive or luxurious items, including cars and clothes. The individuals can be ready to sample different sources of leisure, including beer and non-alcoholic beverages.
Many citizens in this country embrace the power of technology and consider the use of mobile phones for interacting with each other. The government is a leading contributor to adequate resources that can result in innovation and push the economy to the next level (Grivoyannis, 2019). The concept of online activities continued to gain attention in different parts of this country. Similarly, the majority of the large and emerging companies have been focusing on emerging innovations to improve manufacturing processes and ensure that they deliver high-quality products to the targeted customers within the shortest time possible. Environmental concerns are known to affect a wide range of activities in different parts of this country (Morrison, 2017). For instance, illegal poaching and pollution continue to disorient the integrity of the natural environment. However, the government has managed to introduce and implement several policies to handle such challenges and empower investors to pursue their business aims sustainably.
Within the past three years, the Brazilian government has been encouraging foreign investors to consider starting their operations in the country as one of the evidence-based models to tackle the problem of unemployment. However, companies cannot venture into specific sectors that are preserved for the government, including nuclear energy, financial institutions, postal services, and private security. The current laws do not ban or prohibit the use of alcohol in the country (Grivoyannis, 2019). However, such policies become necessary when leaders want to reduce the consumption of beer during football matches and overcome the problem of hooliganism.
The beer industry remains highly regulated in this country whereby companies are expected to promote the best standards and deliver quality to the targeted customers. The government uses different measures to increase taxation for alcoholic beverages as one of the best strategies to minimize consumption (Morrison, 2017). However, some illicit or unregulated products tend to emerge in the market that lack approval from the relevant authorities. This kind of problem is linked to the challenge of corruption that remains a major challenge to the economic development of this country (Grivoyannis, 2019). The owners of CHEERS need to consider all these opportunities and risks since they have the potential to impact or promote the level of business performance. A detailed analysis should be contrasted with the aspects associated with the Indian market to ensure that the final decision or conclusion adds value to CHEERS and eventually makes it more profitable.
Selected Destination Country
The above section has identified India and Brazil as two countries that take CHEERS to the next level. However, Brazil appears to be a better choice since its economy is performing positively and its people are more democratic. The existing political climate is favorable for a company the size of CHEERS. The government has been on the frontline to attract foreign direct investment (FDIs) by reducing existing barriers (Grivoyannis, 2019). The majority of the people earn better salaries while at the same time considering additional ways to rewind and overcome stress. The existing regulations remain appropriate for the beer industry since existing companies have been performing fairly (Grozdanovska, Jankulovski, and Bojkovska, 2017). The current population is a new opportunity to increase sales by delivering these new brands to them and eventually improving organizational effectiveness. This selection will make it possible for CHEERS to benefit from emerging technologies to produce its beer more efficiently and utilize social media platforms to market its core products to the greatest number of citizens.
Entry Mode
Business leaders and entrepreneurs can consider several strategies to enter foreign markets and maximize their gains. For the case of CHEERS, direct exportation appears to be the best strategy that can deliver positive results within a short period. Since it is in its infancy, this organization can rely on the current production systems to deliver more products and export them directly to Brazil. The firm will establish new stores in the major cities across the country to inform more people about the available craft beers (Grozdanovska, Jankulovski, and Bojkovska, 2017). Since most of the local companies do not deliver similar products, chances of getting immediate recognition in the market will be extremely high. The case of Australia reveals that many tourists have been finding such craft beers appropriate and capable of meeting their needs. This trend means that more customers in the selected country will purchase the product and make it easier for CHEERS to achieve its business aims.
The current capital might not be enough to invest directly in Brazil by starting new manufacturing and bottling plants. The existence of several giant companies in this industry can also become a major barrier to effective entry. The use of exports will minimize these risks and make it possible for CHEERS to start recording increased sales to respond to the market stagnation experienced in Australia (Morrison, 2017). This model will reduce the potential challenges that can affect profitability. The company will rely on existing logistical networks to produce beer locally and transport it directly to the country. With combined with the other elements of the exportation strategy, chances are high that this company will attract more customers within a short period.
This model increases some of the common challenges associated with wholly-owned subsidiaries and franchises. First, very minimum legal commitments and paperwork will be required to start exporting directly. Second, the practice will reduce the need to hire more staff members to meet the needs of this small company. Third, a few stores or outlets will be opened that will be marketing the company’s products (Samiee and Chirapanda, 2019). Third, the model will become an opportunity to focus mainly on the expectations of the customers and propose additional measures to increase sales. The ultimate objectives will be to transform their experiences and create new chances of recording the intended aims.
Marketing Strategy
Marketing remains a critical process that dictates the effectiveness or performance of any business organization. CHEERS stand a chance to benefit from the Brazilian market since it delivers specific opportunities for supporting an effective strategy. For instance, many Brazilians appreciate the use of the Internet and different social media platforms. CHEERS’ leaders will have to consider the 4P marketing mix if positive results are to be achieved. The product concept will mean that the company produces and markets craft beers that can deliver a new experience to potential Brazilian customers (Grozdanovska, Jankulovski, and Bojkovska, 2017). They will be of the highest quality and taste that resonates with their demands. The price element means that this firm will analyze the marketing strategies of the existing companies and ensure that its offerings are competitive. The majority of the customers should be able to afford such products and get the best experience from them.
In terms of place, the company will have to establish unique outlets that offer the major products. Customers will need to visit such shops to drink or buy takeaways (Morrison, 2017). Such a process will attract more people and make them repeat customers. Continuous analyses will have to be completed to monitor the behaviors and purchasing trends of different people. This knowledge will inform a superior model and ensure that positive gains are recorded. The fourth element will be that of promotion to ensure that the exportation strategy emerges successful. The company will have to monitor the relevance of social media platforms and inform more citizens about the imported Australian craft beers. Television channels, billboards, and newspapers will have to be targeted since they can become powerful avenues for launching the marketing strategy successfully (Grozdanovska, Jankulovski, and Bojkovska, 2017). The company can go further to start a new website with a Canadian domain to ensure that people can access it and learn more about CHEERS. This approach will encourage them to consider the benefits of the craft beers and support the implemented business model. The combination of the core procedures will support this company’s marketing strategy and eventually make it a major force or rival in the Brazilian beer industry.
Human Resources Strategy
Human resources (HR) departments are essential in any business since they align the available human force with the anticipated aims. CHEERS needs to take this issue seriously if it is to record positive results. The current strategy is designed in such a way that the owners manage most of the operations and hire employees to complete specific tasks, including beer brewing and marketing. After deciding to export its products to the Brazilian market, it would be necessary to consider the importance of hiring more employees both locally and in the target destination (Samiee and Chirapanda, 2019). In Australia, the new workers will be required to maximize production and ensure that the new demand recorded in Brazil is met. It will go further to employ a skilled logistical coordinator or manager to monitor the nature of production and ensure that it resonates with the needs of the targeted customers in Brazil. CHEERS will have to interview and recruit competent sales agents and marketers who understand the dynamics in the beer industry (Abamu, 2019). The firm will train such workers and inform them about the business standards promoted in this foreign country.
Conclusion
The above discussion has identified CHEERS as a successful firm that has managed to record increased profits within the past few years. The decision to expand its operations has encouraged the founders to consider India and Brazil as two potential markets for overcoming the challenges of stagnation recorded locally. The move to select Brazil is informed by the current level of economic performance, emerging opportunities, and the ease of doing business. This firm has the potential to record positive results if it pursues the exportation foreign entry strategy. This option is appropriate since it will minimize the costs incurred to start a new business in a foreign market or environment. The company will go further to capitalize on the available resources to make informed decisions regarding the issue of HR. The move to employ local employees from Brazil appears plausible since it will increase the level of opposition from local beer consumers. The result is that CHEERS will emerge successfully and achieve its business aims much faster.
Reference List
Abamu, B.E. (2019) ‘Introducing investment promotion: a marketing approach to attracting foreign direct investment’, International Journal of Marketing Studies, 11(4), pp. 91-98. Web.
Grivoyannis, E.C. (ed.) (2019) International integration of the Brazilian economy. New York: Palgrave McMillan.
Grozdanovska, V., Jankulovski, N. and Bojkovska, K. (2017) ‘International business and trade’, International Journal of Sciences: Basic and Applied Research, 31(3), pp. 105-114. Web.
Morrison, J. (2017) The global business environment: challenges and responsibilities. 4th edn. London: Palgrave.
Samiee, S. and Chirapanda, S. (2019) ‘International marketing strategy in emerging-market exporting firms’, Journal of International Marketing, 27(1), pp. 20-37. Web.
Sharma, P. (2019) India automated: how the fourth industrial revolution is transforming India. London: Pan McMillan.