Market Analysis of Craft Beer Industry in India and Brazil for Expansion of Cheers

Running head: MANAGEMENT
Management
Name of the student
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1MANAGEMENT
Executive Summary
This report had examined two countries, India and Brazil to analyse the market
attractiveness in terms of craft beer industry. Cheers, an Australian company wanted to make
an expansion in either of these countries. The situational analysis had identified threats and
risks that had clearly shown that India is more attractive and provides better opportunity of
success for cheers. The situational analysis of the both the countries had shown that the
market in India had been emerging but had experienced a growth rate of 40% which was
easily comparable to the growth rate of craft beer in Brazil. The majority of the demand in
Brazil was from normal beer and the competition in the industry is intense. This makes the
entry barrier quite high due to the high intensity of competition. The analysis of the data
clearly shown that India had matched up to every positive of the Brazilian craft beer industry,
even after being one of the emerging markets in terms of beer population. The report had
suggested that company should use market development strategy and strategic alliance as the
method of entering into India. The company should from alliance with Bira which is one of
the market leaders in craft beer segment in India. This would facilitate in competing with
multinational global companies in the Indian market.

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Table of Contents
Introduction................................................................................................................................3
Analysis of risks and opportunities............................................................................................3
Risk and opportunities in India..............................................................................................3
Pestle..................................................................................................................................3
Porter’s Five forces............................................................................................................5
Risks and threats in Indian market.....................................................................................6
Risk and opportunities in Brazil.............................................................................................8
Pestle..................................................................................................................................8
Porter’s Five forces............................................................................................................9
Risks and threats in Brazilian market...............................................................................11
The selected destination country..............................................................................................11
Proposed entry mode for India.................................................................................................13
Marketing strategy...................................................................................................................14
Human resource strategy..........................................................................................................15
Conclusion................................................................................................................................15
References................................................................................................................................17

3MANAGEMENT
Introduction
This report will critically evaluate the potential risk and opportunities in two countries
India and Brazil. CHEERs is one of craft beer companies which has well established
themselves in the Australian beer industry. The company has not seen decrease in demand of
the product, even if the product prices have been increased. The company had increased their
growth significantly till 2015 but is experiencing stagnancy in the Australian market. The
company wants to expand and explore new markets. The report will provide a detail
explanation of the suitable market for expansion along with valid reasons for choosing the
market. The report will also decide on the marketing strategy to be implemented to
successfully penetrate into a foreign market. The amount of human capital required for
achieving the target will also be discussed in brief.
Analysis of risks and opportunities
Risk and opportunities in India
Pestle
Political The political stability of India is high and has a stable government. The
most important factor that affects the BEER industry is the regulatory
policies implemented by the government. The incorporation of GST
(good and service tax in India has increased the overall cost of raw
materials (IndiaFilings 2019). The taxation policies earlier included VAT
(value added tax) and Excise duty which was around 15% on the overall
cost. However, GST has increased the tax on cost of brewing to 18%
which means that there has been significant increase in the price of
finished products (Phadke 2018). Moreover, there is ban on advertising
alcoholic drinks along with restrictions of licensing. These factors may