Business in Global Context

This report analyzes the country and industry of Boag's Brewery for its global expansion in New Zealand. It includes 2x2 matrixes of international strategies, market entry mode, appropriateness of country choice, pros and cons of entering into New Zealand, and HR approach.

Running Head: GLOBAL BUSINESS 1
Business in Global Context

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Table of Contents
Introduction.................................................................................................................................................2
Country and Industry Analysis.....................................................................................................................3
Company Description..................................................................................................................................3
Good and Service Offerings.........................................................................................................................3
2x2 Matrixes of International Strategies.....................................................................................................4
Market Entry Mode.....................................................................................................................................5
Appropriateness of Country choice.............................................................................................................6
Political/Legal Factors..............................................................................................................................6
Economic Factors.....................................................................................................................................6
Social Factors...........................................................................................................................................6
Technological Factors..............................................................................................................................6
Pros and Cons of Entering into New Zealand...............................................................................................7
Concentrated/Decentralized.......................................................................................................................7
HR approach................................................................................................................................................8
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9

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Introduction
In today’s competitive business environment, companies are looking for spreading its business
operations and activities in larger and global context. The major reason behind this is that
domestic market is unable to meet the demands and expectations of globalized people.
Companies have emerged to ensure that it flourishes in globalization age. It helps the
organizations to enhance their brand image across the world (Doz, 2017). To get succeed in
competitive era, a multinational corporation is anticipated to comply with different laws and
regulations, customer preferences and business practices. This report is focused on conducting a
country research of New Zealand in relation to Boag’s Brewery.
Boag’s Brewery is an Australia based brewery organization that was established in the year 1883
by James Boag. The company is planning to make investment in New Zealander market for
which it requires analyzing the external and competitive environment of country. This report
describes about the country and industry of Boag’s Brewery. It includes the description about
2x2 matrixes of international strategies which may be most effective for chosen company.
Furthermore, it recommends the market entry strategies which it should use while entering into
New Zealand. Appropriateness of country is identified by using PEST analysis. Manufacturing
strategy is recognized and an HR approach is suggested that can be used by Boag’s Brewery to
get workforce in country.
Country and Industry Analysis
Boag’s Brewery is operating its business in Australian beer industry. The facts and figures
indicate that company is experiencing significant growth that is beneficial for the development of
chosen company. In Australian beer industry, the current revenue amounts to US$11,621 million
in the year 2018. The industry is estimated to enhance yearly by 4.9% in the duration of 2018-
2021. As compared to global level, most of the revenues are produced in the United States i.e.
US$76,916 million in the year 2018. In this nation, the average per capita consumption off beer
stands at 71.6 litre in 2018 (Euromonitor International, 2018). There are various players in this
industry which pose competition on Boag’s Brewery like Cascade Brewery, Kirin Company,
Coca-Cola Amtil etc. In this country, the industry shows the market trend that customers are

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shifting from traditional beer to the craft beer and higher priced premium beers. By analyzing the
industry, it can be stated that every Australian schooner of beer offered on pubs and other
premises contributes $6.24 to Australian GDP. In this way, each Australian-brewed beer
contributes $3.92 to the GDP of Australia. The tax rates are very high in the country. Excise on
beer is more than twice the average of OECD nations (Kuehn & Parker, 2018).
Company Description
Boag’s Brewery is an Australia based brewery firm that was established in the year 1883 by
James Boag and his family. It was founded in Launceston, Tasmania, Australia. Now, the
company is owned and operated by Lion, as Trans-Tasman subsidiary firm of Japanese beverage,
Kirin. Most of the beers of Boag are manufactured in Launceston. After this acquisition, Lion
has started to make changes so that it can enhance its brewing network. The top management of
company stated that all the brands of Boag will be brewed in Launceston but many national
brands will shift to interstate (The Tasmanian Beer Trail, 2015).
Good and Service Offerings
Boag’s Brewery is engaged in offering a wide range of beers to its targeted customers. In the era
of 1990s, it had introduced two new product lines of beer i.e. Premium Lager of James Boag in
the year 1994 and Strongarm Bitter of Boag in the year 1997. Later in 2002, Boag’s Premium
Light was introduced on national level and it had won the award of New Beer of the Year at
Australian Liquor Industry Awards. Additionally, the company offers various brands of beer like
Boag’s Draught, Boag’s Pure, Wizard Smith Ale, Draught Light, Boag’s Honey Porter etc. (The
Tasmanian Beer Trail, 2015).
2x2 Matrixes of International Strategies
While Boag Brewery will be entering into New Zealand market, it will develop some strategies
by utilizing 2x2 matrixes. This type of matrixes includes 4 options which help the organizations
to make their important decisions (Stoian, Rialp & Dimitratos, 2017). Here, Ansoff matrix is
taken into consideration as 2x2 matrixes. This matrix defines two different dimensions i.e.
product and market. Ansoff strategies of Boag Brewery are stated below:

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Market Development
In the case of Boag Brewery, market development will be the most appropriate strategy in New
Zealand country. By the use of this technique, the organization will be launching its well-known
beers and other drinks among the targeted audiences of this country. In its domestic market,
Boag Brewery offers various beer brands like Boag’s Premium Light, Premium Lager of James
Boag, Strongarm Bitter of Boag etc. These are the major beverages which are the reason behind
the growth and revenues of Boag Brewery. Under market development strategy, Boag Brewery
can sell its famous beer products among targeted people by researching their demands and
expectations towards alcoholic beverages (Tung, 2016). By doing this, the company will be able
to connect with more people and attract a larger customer base. The company is using a unique
brewing process which can entice more people. It will enhance the value or organization and its
workplace.
Diversification
In addition to market development, the company can use diversification strategy that will be best
fit to its operations in new market. Boag Brewery Company can emerge its business by
launching new products in New Zealand. In this market, it is found that people are very
concerned towards health and nutrition. The company can introduce a new brand line of dietary
brand. It will enhance its brand presence among both national and international customers. This
strategy will support the organization to increase its brand presence and customer base in New
Zealand (Stoian, Rialp & Dimitratos, 2017).
In this way, these are the two strategies which are most suitable and which can be used by Boag
Brewery for international expansion in New Zealand.
Market Entry Mode
For any expanding organization, it is very important to determine a market entry mode through
which it can enter into new market. It is the strategy which is used by a firm while entering in
international market (Hill, Hult, Wickramasekera, Liesch & MacKenzie, 2017). In this global

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expansion process, Boag Brewery will choose the most suitable entry mode which will generate
significant results for company’s growth.
For the chosen company, the suggested market entry mode is discussed below:
Exporting
While making decision regarding entry mode, Boag Brewery can use exporting mode to enter
into New Zealand market. Export is the process of offering goods and services which are
manufactured in one nation to other nations. It is a function of international business expansion
whereby products produced in one country are delivered to other nation for future trade. By
using this mode, the company can transfer its downstream capabilities to New Zealand market
because of its experience in foreign market (Laufs & Schwens, 2014). These capabilities are
marketing and sales capabilities. These capabilities can be shifted to New Zealand to keep a
focus on the distribution and to attain valuable customer and valuable insight. In order to transfer
sales capabilities, it will have close tie up with importer in New Zealand. Moreover, it will
establish the marketing division in center city of New Zealand from where it can market its beer
products in different cities of country. In this country, it will tie up with the importing
distributors and send its sales representatives. This will be very advantageous for the operations
of Boag Brewer. The main advantage will be that it will not need to establish any premises in
New Zealand that will reduce its expansion costs. Furthermore, this mode will help Boag to
control over this new market and generate more sales and revenues (Howard, 2014).
In this way, it can be suggested that Boag’s Brewery should adopt exporting strategy to enter
into market of New Zealand (Paul, Parthasarathy & Gupta, 2017).
Appropriateness of Country choice
Before this international expansion in New Zealand market, it is crucial to develop a market
research and evaluate whether the market of this nation is right to make entry. Here, the rightness
of this new market can be assesses by practicing a strategic analysis i.e. PEST analysis. For Boag
Brewery, New Zealand’s market is evaluated below:

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Political/Legal Factors
The government of New Zealand has figured out the alcohol abuse as one of the big issues
among young generation in society. The government has imposed excise charges on beer and
other alcoholic beverages. It can affect the business operations of Boag Brewery in New
Zealand. In this country, the government has revised the excise charges due to which prices of
brewed products increased. It may influence among country’s population (Crick & Lindsay,
2015).
Economic Factors
In New Zealand, beer is very famous alcoholic beverage that accounts for 63% of alcohol for
sale. The country is ranked 27th international beer consumption per capita all over the world. Its
economy is developing which can have positive effect on brewing business of Boag
(Euromonitor International, 2018). There is an increase in the disposable income of country’s
people so they can spend money on leisure and entertainment activities. Thus, economic position
and popularity of beer will be profitable for the development of Boag in this new market.
Social Factors
There are various social factors which can have positive impacts on the business operations of
Boag’s Brewery in New Zealand (Kelsey, 2015). The customers like to serve beer and other
alcoholic beverages in their house parties. Recently, domestic industry has generated $2.2 billion
in the economic activity that indicates that there is an increase in beer consumption among New
Zealand’s population (NZ Herald, 2017). Moreover, Boag can attract more customers by offering
dietary brands of beers. There are various sports events in the country like Rugby Match that
provides flock of travellers that may increase sales of beers (Cody & Jackson, 2016).
Technological Factors
Boag Brewery always follows both innovation and technology that assists it in brewing the beers
and meeting the demands of customers. This country can provide advanced technologies to this
business which will make its operations smoother. To export products and manage its operations
in New Zealand, it is very important for Boag Brewery to use innovative technologies.

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Pros and Cons of Entering into New Zealand
The above analysis found that the market of New Zealand offers both pros and cons to the
business of Boag Brewery. From the analysis, it is recognized that one of main pros of this
business expansion is that it provides a strong economy and positive economic aspects to Boag
Company. Social factors are also positive for this company as they can increase the sales and
revenues of Boag Brewery. The people in this nation like to consume beer in parties and
occasionally. They serve beer and other alcoholic beverages in their in-house parties. It is the
positive sign for the growth of Boag in New Zealand (Kelsey, 2015). By using effective
strategies, the company can diversify its product range and entice more customers.
Moreover, the major cons are its political and legal environments. The government has imposed
various rules and regulations on beer businesses. It is identified that taxes and excise charges are
very high in the country’s beer sector. Due to this, the company will need to sell the beer on
increased prices. It may have adverse impact on the growth and business of Boag Brewery
Company in New Zealand.
Concentrated/Decentralized
By gaining the understanding about the operations of Boag Brewery, it will be right to state that
the company will go with the centralized manufacturing strategy. It should set up a single
premise which will brew the beer and alcoholic beverages. As mentioned above, the company is
spreading its business using exporting, so in the beginning there is no need to set up any
manufacturing unit. After some time, it can establish its units and premises in the country. By
doing this, the company will be able to enhance its revenues and sales in New Zealand market.
Boag is entering in New Zealand by using export mode, so there is no need to find the location
for subsidiaries. It needs to focus on its marketing and promotional activities so that it can
approach a larger population in country.
HR approach
In addition to above entry modes and strategies, Boag Brewery Company will use the most
appropriate human resource approach which will enable it to get workforce in New Zealand
market (Brewster, Houldsworth, Sparrow & Vernon, 2016). However, the company is using

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exporting technique so it will need a few people in its staff like sales representatives, marketing
team, quality management team, marketing executives etc. It will use an effective approach of
recruitment and selection like online sources and internet. It will post the job advertisements on
online job portals and different sites where people can connect with the company as per their
skills and capabilities (Bratton & Gold, 2017). Through this approach, it will be able to get
appropriately skilled employees for the right position at Boag.
Conclusion
In the limelight of above discussion, it can be concluded that the external environment of New
Zealand country is profitable for the business growth of Boag Brewery. In this country, beer
industry is very strong and there is an increase in beer consumption that will be beneficial for
Boag’s business. It is hereby recommended that it should spread its business in this country as it
will be able to increase its sales and revenues. There are some factors which are positive for
future development for company. It will have various business opportunities which will assist to
overcome different cons in new international market.

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References
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Brewster, C., Houldsworth, E., Sparrow, P., & Vernon, G. (2016). International human resource
management. Kogan Page Publishers.
Cody, K., & Jackson, S. (2016). The contested terrain of alcohol sponsorship of sport in New
Zealand. International Review for the Sociology of Sport, 51(4), 375-393.
Crick, D., & Lindsay, V. (2015). Service and service-intensive New Zealand internationalising
SMEs: Managers’ perceptions of government assistance. Marketing Intelligence &
Planning, 33(3), 366-393.
Doz, Y. L. (2017). Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
Euromonitor International. (2018). Beer in Australia. Retrieved from
https://www.euromonitor.com/beer-in-australia/report
Euromonitor International. (2018). Beer in New Zealand. Retrieved from
https://www.euromonitor.com/beer-in-new-zealand/report
Hill, C., Hult, T., Wickramasekera, R., Liesch, P., & MacKenzie, K. (2017). Global Business
Today Asia-Pacific Perspective. McGraw-Hill Education.
Howard, P. H. (2014). Too big to ale? Globalization and consolidation in the beer industry.
In The Geography of Beer(pp. 155-165). Springer, Dordrecht.
Kelsey, J. (2015). Reclaiming the future: New Zealand and the global economy. Bridget
Williams Books.
Kelsey, J. (2015). The New Zealand experiment: A world model for structural adjustment?.
Bridget Williams Books.

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Kuehn, K. M., & Parker, S. (2018). One of the blokes: Brewsters, branding and gender (in)
visibility in New Zealand’s craft beer industry. Journal of Consumer Culture,
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Laufs, K., & Schwens, C. (2014). Foreign market entry mode choice of small and medium-sized
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NZ Herald. (2017). Beer industry generates $2.2b in economic activity. Retrieved from
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11898568
Paul, J., Parthasarathy, S., & Gupta, P. (2017). Exporting challenges of SMEs: A review and
future research agenda. Journal of world business, 52(3), 327-342.
Stoian, M. C., Rialp, J., & Dimitratos, P. (2017). SME networks and international performance:
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Tung, R. L. (2016). New perspectives on human resource management in a global
context. Journal of World Business, 51(1), 142-152.

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