Business Analysis Report: Strategic Assessment of Cooper Brewery for Expansion in Thailand

This business analysis report provides a strategic assessment of Cooper Brewery for its expansion in Thailand. It covers the analysis of the internal and external environment, including SWOT analysis and PESTLE analysis. The report also evaluates growth opportunities and discusses generic business strategies.

Business analysis
report

Table of Contents
Table of Contents............................................................................................................................................................2
INTRODUCTION..........................................................................................................................................................1
STRATEGIC ASSESSMENT OF FIRM.......................................................................................................................1
Analysis of internal environment...............................................................................................................................1
Strategic Assessment of the Firm’s External Business Environment.............................................................................4
PESTLE Analysis......................................................................................................................................................4
Managerial Evaluation of the Growth Opportunities......................................................................................................6
Generic Business Strategy.........................................................................................................................................6
Ansoff’s Strategy.......................................................................................................................................................7
Evaluation Using SAFE Criteria................................................................................................................................9
CONCLUSION...............................................................................................................................................................9
REFERENCES.............................................................................................................................................................11

INTRODUCTION
Business analysis report can be defined as the document that covers detailed information of
an organization regarding internal as well as external environment so that strategic decisions for
future could be formulated. In order to expand business in a new country it is very important for
an entity to make sure that appropriate data of market is collected so that best suitable growth
opportunity could be identified (Paul, Cadle and Yeates, 2014). While planning to attain
competitive advantage in the industry it is essential for companies to create business analysis
report so that the key areas that may help to grow business could be identified. This report is
based upon Cooper Brewery which is one of the largest beer manufacturing of Australia. The
entity is planning to expand in international market by establishing business in Thailand. For this
purpose, different elements are covered in this report such as strategic assessment of firm by
conducting analysis of internal as well as external environment and managerial evaluation of
growth opportunities. Different models such as Genetic business strategy, Ansoff matrix and
evaluation of SAFE criteria is also covered in this assignment (Fleisher, and Bensoussan, 2015).
STRATEGIC ASSESSMENT OF FIRM
Analysis of internal environment
Internal environment: It can be defined as the set of different elements that are used by
companies to perform operational activities. BY analyzing it business entities can identify all the
core strengths that are facilitating the achievement of all the long-term organizational goals. In
order to determine that business is performing well or not top-level managers try to analyze
internal environment (Kuratko, Hornsby and Covin, 2014). With the help of it they became
aware of all the positive as well as negative elements that may leave impact upon operational
efficiency. Cooper Brewery is one of the largest entities of Australia and to analyze that all the
operations are performed properly or not internal environment is assessed by the management.
For this purpose, SWOT analysis is used which helps to determine strengths, weaknesses,
opportunities and threats for business. Description of it is as follows:
SWOT analysis: It can be defined as a strategic management tool which is used by
businesses for the purpose of formulating development strategies for future growth. Main reason
for its use is to determine that company is having competitive position in the market or not as
compared to other entities. By using it Cooper Brewery will be able to formulate effective
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strategies and decisions for upcoming period so that growth could be acquired (Phadermrod,
Crowder and Wills, 2019). There are four different elements of it which are discussed below in
context of the organization:
Strengths: These are some of the positive aspects that facilitates an organization to
perform all the operations properly. Some of the key strengths of Cooper Brewery are as follows:
 Geographic presence of Cooper Brewery is very high which helps it to serve a large
market and generate higher profits. It shows that reach of the organization in international
markets is very high which helps to access the business easily.
 Product portfolio of the organization is wide which allow it to expand the customer base
and reduce the possibility of facing losses (Brooks, Heffner and Henderson, 2014).
 Financial position of Cooper Brewery is strong in the industry in which it operates and
with the help of it the entity can make investment in different markets where it does not
operate yet.
 Online presence of the company is very high which helps it to market itself easily. All the
social media pages are managed by it properly which is beneficial for it to develop strong
relations with its clients.
 The organization is highly focused with making sure that there is lack of dependency on a
specific market so that possibility of lower profits could be avoided.
 The quality of brewery which is sold by it is very good and on the other hand idea of its
beers is very unique which helps it to distinguish from other brands in the industry.
Weaknesses: These are the elements that can affect growth of a business. Some of the
major weaknesses of Cooper Brewery are as follows:
 Inventory management practices of Cooper Brewery are not efficient which may result in
higher cost for it (Sammut‐Bonnici and Galea, 2015).
 Organization is facing the issue of cash shortage because of lower availability of liquid
assets which may affect its performance in upcoming period.
 Very low amount is spent by the entity on research and development activities which may
create issues for it in future as it will not be able to offer items to clients according to
latest market trends.
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 The budget which is kept by Cooper Brewery for marketing and promotion is insufficient
which weakens the ability of the organization to spread awareness about its services and
products.
 The customer complaint handling system of the enterprise is weak which results in poor
customer service. It is resulting in negative word of mouth for the organization and
creating negative market image (Madsen, 2016).
Opportunities: These are some of the aspects which should be focused by an
organization for the purpose of attaining growth. Some of the opportunities for Cooper Brewery
are as follows:
 Business expansion strategy is focused by the organization which can help it to enhance
its global presence and improve liquidity.
 Customer’s needs, preferences and requirements changes with time by keeping detailed
information of it the entity will be able to attain competitive advantage in the industry.
Offering products to customers as per their needs and preferences will provide an
opportunity to company to attract large group of customers towards it.
 Cooper Brewery can sign a strategic alliance with foreign companies to import beers
which will help it to strengthen market share.
 The organization can establish its wine division where competitors have attained failure.
Threats: These are the key areas which may leave negative impacts upon business. Some
of the threats for Cooper Brewery are as follows:
 The organization may face threat of shortage of skilled workforce which will affect its
productivity. As there is high unemployment rate in Thailand market, the labor is
available at cheap rates, but they are not that much skilled that will provide competitive
edge to company.
 The number of increasing competitors in brewery industry is affecting sustainability of
the enterprise in the industry. Intense competition in market creates a threat for company
in running its business operations successfully in market of Thailand (Ghaffari, Delgosha,
and Abdolvand, 2014).
Strategic Assessment of the Firm’s External Business Environment
In Thailand, the alcoholic beverage market is significant market as the nation has high
consumption of alcohol per capita. The market growth has been highly impelled through
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augmenting demand alcoholic beverages of premium quality and changing preferences of
consumer. There are various factors such as increasing disposable incomes, high population
growth, molasses production in Thailand etc. are some factors that are highly contributed
increasing alcoholic beverages demand. Amongst the population of Thailand, it has been
observed that there is high alcoholic beverages demand, especially rising trend in spirit sales
(Aithal, 2016).
PESTLE Analysis
In order to assess external business environment of company, pestle analysis is an
appropriate framework that can be used by manager to determine the opportunities and threats
exist in the market. it also helps company in framing appropriate strategies that helps in attaining
growth and success in market for long term. PESTLE framework includes 6 forces, analysis of
which are discussed below:
 Political factor: In alcoholic beverage market of Thailand, there is high degree of political
instability due to which the strategies of company may impact adversely as it leads to
frequent change in policies and practices of government. If government changes its
policies related to interested tax, tariffs etc. then, it directly impacts the operational
strategies of company. However, if the management of Cooper Brewery follow laws and
regulations developed by government and making changes accordingly in their business
practices will offer an opportunity to company to run its business operations effectively
and smoothly (Christodoulou and Cullinane, 2019).
 Economic factor: This factor has direct influence on potential attractiveness of alcoholic
beverage market in Thailand. The demand of alcoholic beverages is high in the country.
Thai economy is one among the fastest growing economy of the world with rate of 8 to
9% a year. In year 2017, the market share of beer by value is 54% and spirits is 45%. The
high growth rate of gross domestic product depicts the growing demand of alcoholic
beverages in Thailand. By expanding its product range and target new customer group,
Cooper Brewery can leverage this trend. Apart from this, the high unemployment rate of
the country provides an advantage to company in terms of hiring employees at lower
wage rates that can lower the cost of company (Bhumkittipich, and Ohgaki, 2018).
 Social factor: this factor encompasses attitudes, belief, culture and values that people hold
as a community. In Thailand, the needs, preferences and behavior of consumers are
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changing very rapidly as people like to spend money on getting new experiences. People
are very brand conscious and are willing to pay extra amount for getting high quality
products. This provides an opportunity to Cooper Brewery as it offers high quality beer to
customers. It uses innovative methods of preparing beer which makes it unique in taste
and as people of Thailand are ready to pay some extra amount for getting high quality
beer, so, expanding in the market provides huge opportunity to company to get growth
and success in market.
 Technological factor: This factor encompasses changes in technology, technological
advancements, innovations etc. Thailand is becoming a technologically advanced Nation
and government of the country offers range of incentives for companies to adopt new
technologies (Shepherd and Berning, 2015). In Thailand, the investment of firms in tech
infrastructure and innovation is noteworthy. As Cooper Brewery technologically
innovative methods in manufacturing of alcoholic beverages, it will provide an advantage
to company to operate its business in Thailand and gaining competitive advantage in
market over the rivals. However, investment in technology may cost high to company,
but high quality beer offers by firm overweigh the cost and enables it to increase its
profitability ratio.
 Environmental factor: It includes forces like whether change, climate, pollution etc. In
Thailand, the rapid development of economy has taken a toll on resources which are
natural. Air and water pollution, water scarcity, loss of biodiversity, deforestation and
desertification are some challenges that is facing by Thailand. In manufacturing of beer
high amount of water is required. This creates a challenge in front of company in running
its business operation effectively and smoothly. Noncompliance of environmental laws
will result in adverse consequences (Sridhar and et. al, 2016). Company may face
criticism from society or community. However, following of all the environmental laws
made by or government will make it easy for company to run its operation successfully in
the market of Thailand.
 Legal factor: the force encompasses regulations made by government, intellectual
property rights, employment law, data protection act, discrimination and consumer
protection law, health and safety law, anti-trust law etc. It is very necessary for
management of Cooper Brewery to follow all these regulations made by government of
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Thailand to ensure effective operations of business. The country has standard
employment laws that ensure the protection of rights of people at workplace. If company
will not follow these law, then it may face legal consequences in terms of high penalty
and others. However, following all these laws and regulations will deliver an opportunity
to business entity to run its operation successfully in Thailand market (Christodoulou and
Cullinane, 2019).
All the above mentioned are different macro environmental factors that provide some
opportunities to company while expanding its business in Thailand market. Proper consideration
of all these factors at the time of expanding the business will help in formulating appropriate
strategies that will provide an advantage to company to attain competitive edge in market over
the rivals and gain high profitability and success.
Managerial Evaluation of the Growth Opportunities
Generic Business Strategy
As per the porter's generic strategies framework, three strategic options are available to
company that helps in gaining competitive advantage in market. These strategies include cost
leadership, focus and differentiation. The description of these strategies are mentioned below:
 Cost leadership strategy: organizations using this strategy aims to be a low cost
manufacturer in the sector. The sources of advantage are different and rely on industry
structure. This strategy is appropriate for large scale businesses that offers standard
products with Les differentiation. It requires close cooperation among all the functional
areas of company. A form can attain cost leadership by using lean production methods,
high capacity utilization, effective technology use production process and high levels of
productivity (Alstete, 2014).
 Differentiation strategy: in this, larger markets are targeted by company and aims to
accomplish competitive edge by differentiating its products to the competitors. Firms
using this strategy seeks to be unique in sector along some aspects that are valued by
buyers. Differentiation leadership can be attaining by company in market to offering
superior quality product, consistent promotional support, branding of product and its
industry-wide distribution (Omsa, Abdullah and Jamali, 2017).
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 Focus strategy: it has two variants including cost focus and differentiation focus.
Companies using this strategy seeks low cost advantage in small market segments. In this
the product is basic but, acceptable to adequate customers. In cost focus strategy, the
organisation seeks to attain cost advantage in niche market. On the other hand, in relation
to differentiation focus strategy, an organisation seeks to bring differentiation and its
products and services in niche market that makes it distinct from its competitors. By
adopting focus strategy, the company emphasize on few target markets only which must
be a distinct group with specified needs.
From the above mentioned strategies, cost leadership strategy is the most appropriate for
company to attain growth in Thailand market. Application of this strategy will help company in
gaining cost advantage in market and protecting itself against ill effects of rivalry if the company
has low cost structure (Brenes, Montoya and Ciravegna, 2014). Apart from this it also helps firm
in minimizing the threat of cheaper substitute that can offset the company to some degree by
lower prices. Moreover, it enables company to sell large volume of beer by charging low price
which in turn help it in maintaining its profit ratio and attain large number of market share. So, it
would be beneficial for the company to choose cost leadership strategy as a growth option while
entering into the market of Thailand.
Ansoff’s Strategy
The business expansion only gets successful when a company enter into a market with right
strategy that support in dealing with the challenges that are already present in market and at the
same time support in achieving the sustainability at marketplace (Yin, 2016). As the Coopers
Brewery is seeking for international business expansion and planning to enter into Thailand
market it is very crucial for the company to adopt right strategy for better business growth. It can
use Ansoff matrix which is a framework support organisation in selecting best strategy for either
product or market expansion effectively. It mainly consists of four strategies which can be better
understood using following point,
 Market penetration: - This strategy state that an organisation must focuses toward
improving its volume of sale within same country with same products which it is
currently offering. Under this strategy the Coopers Brewery can work toward improving
its internal business practices for cutting down expenses and minimize the price of its
products so that it become able to get penetrate in larger market within country. This is a
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cost effective method which support company in achieving maximum benefit without any
kind of further investment (Gurcaylilar-Yenidogan and Aksoy, 2018).
 Product development: - This strategy suggests that an organisation must focuses toward
improving its existing product or bring up new product to market for regaining its growth
stage within, marketplace. The Coopers Brewery can launch some new offering to the
market of Thailand which support in expanding the business while catering the existing
customer base which build up loyalty among them.
 Market development: - Under this strategy it is being suggested that in order to achieve
greater growth opportunity an organisation must focuses toward entering into new market
where the demand of product is high. In this strategy the Coopers Brewery must focuses
toward entering into a new market by performing a thorough research and determining
the customer demand. This help it in achieving higher growth as the same product will be
offered to new market which ensures easy acceptance as company have idea about the
quality and benefit of existing offerings that it can present among customers effectively
and can achieve sustainability.
 Diversification: - In this strategy, an organisation is suggested to approach a new market
with new product or services for achieving an expansion growth for business. This is the
riskier strategy to be adopted. Coopers Brewery can adopt this strategy but for which it
requires huge investment to be made in term of expanding the business and at the same
time developing new product (Veiga, and Franco, 2015).
After analyzing all the above strategies effectively, it has been determined that the market
development will proves to be most effective and beneficial strategy for Coopers Brewery as
with the help of this strategy it become able to expand business with another customer base
which ensure more benefit. At the same time, by offering the same product it become easier to
maintain market activities as the features and factors are already known about product to the
company which ensure maximum benefit at low investment.
Evaluation Using SAFE Criteria
After formulating strategies related with expansion of business it also become crucial for
the managers to ensure that it will support in achieving the main objective behind it or not. For
ensuring this Coopers Brewery must evaluate the above selected strategies over SAF criteria
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which judge the Suitability of strategy as per the market, acceptability that it support an
organisation to achieve and feasibility as per current objective.
Hence, the market development strategy under Ansoff matrix will be valid as per SAF
criteria as Thailand is a tourism destination place which is having huge demand of beer hence
Coopers Brewery would be able to perform well with its same product which it is currently
offering (Tong, Pu and Ma, 2019). Therefore, the strategy is suitable for business as it become
able to achieve its growth expansion objective and its product with this strategy also get accepted
in Thailand as per current market scenario. It also remains feasible as with existing product
company is required to invest less which support it in recovering its expenses easily from sale.
Other than this the cost leadership strategy under porter’s generic model also remain
favorable to these criteria as the strategy is suitable because tourist mainly prefer to get product
at lower price. This also support it in getting acceptance and other than this strategy proves to be
feasible as by selling lower price product it easily gets penetrate to new market that provide
maximum profitability.
CONCLUSION
As per the above stated report, it is concluded that While entering into the international
market, it is necessary for company to carefully analyses its internal as well as external
environment. This will help company in knowing the impact of different factors on activities and
operations of business. For conducting internal analysis, SWOT analysis is the most appropriate
framework that helps company determine its strengths, opportunities, weakness and threat.
Determination of weaknesses and threats help company in undertaking the ways or measures to
improve them in order to gain competitive advantage in market. Pestle analysis helps in
determining macro environment factors and the impact that they may have on operations and
strategies of business. It includes six factors including social, political legal, technological,
environmental and economic factor. Use of technology in business operations will help company
in gaining competitive advantage. Apart from this, it is very necessary for organizations to
comply with all the regulations made by administration to run its business operations and
activities successful in the new market. The spread of COVID 19 Virus adversely impacts on the
sales ratio of company. Due to this pandemic, there is high downfall in the economy which
ultimately decreases the disposable income of people of the country. This will directly impact the
sales and profit ratios of firm. There are different growth options that are available to company
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including market development, product development, market penetration and diversification
among which market development is the most appropriate strategy for company to enter into new
market and attain high profitability. In addition to this, among the four Porter generic strategy,
cost leadership strategy is the most appropriate for company to achieve high profitability in
market.
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