Analysis of Market Entry Mode for CHEERS in India and Brazil

This report analyzes the market entry mode for CHEERS, an Australian craft beer manufacturing organization, in India and Brazil. It discusses the risks and opportunities in both countries, proposes a mode of entry, and suggests marketing and human resource strategies.

Running head: GLOBAL BUSINESS MANAGEMENT
GLOBAL BUSINESS MANAGEMENT
Name of the Student
Name of the University
Author Note

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Executive Summary
The report is built on the analysis of a market entry mode that can be used by an Australian
craft beer manufacturing organization named CHEERS. The analysis is related to
consideration of two countries for expansion, namely, India and Brazil. The risks that are
related to business operations in the two countries and the opportunities that are provided to
the company have been considered in the report. The report has also provided a detailed
analysis of the human resource based strategy and marketing strategy that can be
implemented by CHEERS in order to operate in India. The strategies that have been
suggested in the report can be implemented in an effective way in order to rise the levels of
presence of the organization in the food and beverage based industry. The employees will be
provided highest levels of importance by the organization in order to develop its operations in
the beverage based industry. The structure that can be developed by the organization has also
been suggested in the report. CHEERS will be able to expand its operations in the industry
with the help of appropriate stages of proper knowledge based on the market in which the
organization can operate.

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Table of Contents
Introduction....................................................................................................................3
Analysis of the risks and opportunities in Brazil and India...........................................3
Risks and opportunities for CHEERS in Brazil.........................................................3
Risks and opportunities for CHEERS in India...........................................................5
The selected destination country....................................................................................7
Discuss and justify the proposed mode of entry for chosen country.............................7
Suggest and justify the marketing strategy to be adopted by the company...................8
Suggest and justify the human resource strategy to be adopted by the company..........9
Conclusion......................................................................................................................9
References....................................................................................................................11
Appendices...................................................................................................................14

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Introduction
CHEERS is a start-up brewing based organization that was established in the year
2010 and has been able to form a consumer base in the Australian market. The organization
mainly offers craft beers to the customers and the choice of product is based on the ways by
which CHEERS can differentiate itself from the competitors. The business has depicted
significant levels of growth within six years of its establishment in the industry. The report
will be mainly based on the ways by which the organization can plan to expand its operations
in different regions and countries (Barros, Hernangómez and Martin-Cruz 2016). The two
countries that have been considered for analysis based on expansion related plans are Brazil
and India.
The report will provide a detailed analysis that are related to the opportunities and
risks offered by the two countries. The market entry mode that can be implemented in the
country, the marketing strategies and human resource based strategies will be analysed in
detail. The analysis will be able to provide a detailed picture that will be helpful for CHEERS
to take a decision.
Analysis of the risks and opportunities in Brazil and India
Risks and opportunities for CHEERS in Brazil
Cultural risks in Brazil – The population in Brazil is affected by the levels of
inequality in the society. More than 20% of the total population of the country has been living
under the poverty line for the last few years and the unequal distribution based on income.
The country consists of considerable number of wealthy people and on the other hand huge
number of people belong to the minimal income group (Williams and Kedir 2016). The
growth levels of middle class people in the country is also a major factor that affects the

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choice based on products. The Brazilians are aware of the updated fashion based trends in the
country and are always keen to buy the luxurious and expensive products that are available in
the market (Daspit et al. 2017).
Legal factors in Brazil – Brazil is a country with highly bureaucratic environment.
The development of operations of any business organization needs huge amounts of
paperwork and many regulations. The largest business based centre of the country is Sao
Paulo which has gained the rank of 119 in 155 related to levels of ease of conducting
business operations (Garcia-Escribano, Goes and Karpowicz 2015). the government of Brazil
has however taken major steps based on providing support to the investors who wish to enter
the country. The investors are provided with lists related to the bureaucratic instruments and
manuals. Brazil has also signed the bilateral agreement related to the ways by which taxation
can be avoided. The laws are developed in such a manner that are able to regulate the pricing
models (Demir, Wennberg and McKelvie 2017).
Financial risks in Brazil – The legal political condition in Brazil has been able to
increase the levels of financial risks for the organizations in the country. The levels of
political instability in the country are quite high and have a major impact on the financial
condition. The currency of Brazil had been introduced in the year 1994. The currency of
Brazil is quite overvalued and this has been able to affect the imports and exports in the
country (Durand, Grant and Madsen 2017).
Opportunities in Brazil – The economy of Brazil has shown immense levels of
growth in the year 2017. The agricultural sector of the country has been able to play a key
part in the methods by which the economy has shown growth. The production of car is also
able to affect the economic growth of Brazil. The levels of unemployment have started
decreasing from the year 2017, however Brazil still faces some major social issues and has

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shown high inequality levels as well. Brazil has gained the position of fifth largest country in
the world based on its area. The population in the country largely consists of the middle class
people who are a part of the urban environment and the demands for new services and goods
are also high (Ferreira 2019).
As discussed by Fouad and Gouvea (2018), the economic growth of Brazil is also
based on the oil based deposits that have been made in the country. More 30 million people
of Brazil were able to come out of the poverty based status from the year 2000. The country
is however able to provide major untapped opportunities to the organizations that wish to
enter Brazil. The Investor Visa Program is a major initiative that has been taken by the
Brazilian government in order to attract foreign investments and organizations. Brazil is also
able to provide major opportunities to the e-commerce based organizations as the research
has been able to depict that Brazilians tend to spend 32 to 38 hours online per month
(Gondim et al. 2017).
Risks and opportunities for CHEERS in India
Cultural risks in India – Social and cultural factors are based on the changes that
take place in the trends and their impact on the business based environment. India has a
multi-ethnic and multilingual society that is based on different beliefs and values of local
culture. The impression that is developed by a business organization in the country is able to
play a major part in the methods by which customers can be attracted (Ali and Shabir 2017).
Meeting based etiquettes are considered to be important for the managers and the staff of
different companies in India. English is an official language in India and locals use the
language on a frequent basis. Long term relationships are a major part of the operations of
business organizations in the country (Engert, Rauter and Baumgartner 2016).

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Legal factors in India – Many legal changes have been implemented in the country is
the last few years. The changes mainly include, minimum increase in the wages,
discrimination based disability, recycling activities. The regulations that are required to be
followed by business organizations in India are considered to be highly unpredictable in
nature. The foreign based organizations can sometimes face major issues related to the ways
by which different regulations can be followed in an effective manner (Ethiraj, Gambardella
and Helfat 2018).
Financial risks in India – India is a stable democratic country and risk of failure of
the business organizations is low. The changes that take place in the ruling parties can
increase pressure levels on the international organizations. The economy of India is also
based on certain amounts of risks like, transferring payments to the rural poor people,
disproportionate raises for the state based employees and lack of the rates of fiscal discipline
at government levels. The exchange rate based risks and risks based on interest rates need to
be closely watched by the foreign organizations in order to continue the effective and
profitable operations. The financial dealings of modern companies will be affected in a
negative manner if the exchange based rates are not taken into consideration (Ferreira 2019).
Opportunities in India – India will however be able to provide massive levels of
opportunities to the organizations in order to start their business operations. Many researches
have been able to depict that India has the prospects of developing huge infrastructure based
on different business organizations. The economy of the country is also able to show
effective levels of growth in the recent times. The levels of wealth per person has increased
from 900 Dollars in the year 2000 to 2800 Dollars in the year 2015. The number of online
consumers have also increased and can cross 100 million. The open market economy of India
is quite welcoming for the investments that can be made by the global organizations. The
long term based economic growth of India is able to provide positive chances of growth to

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the organizations. India can be termed as a “Land of Opportunities” which is able to provide
different levels of opportunities for all round based growth of the organizations that operate
in the country. Only multinational organizations that have vast levels of resources had been
able to operate in a successful manner, however, from the last few years small and medium
sized companies have been able to gain a major position in the Indian market. The different
industries which have been able to provide lucrative chances to the business organizations
include, home based products, food and beverages, education, healthcare, infrastructure and
consultancy services. The organizations will be able to establish their business operations
with the help of effective levels of chances of expansion provided by the environment in
India (Fouad and Gouvea 2018).
The selected destination country
The destination country that has been selected for the proper expansion of CHEERS
in the industry is India. The opportunities provided to the company in India are higher as
compared to the other country which has been considered. Business based environment of
India is considered to be better in comparison to that of Brazil. The organization will be able
to form a new customer base in the industry with the help of proper levels of opportunities
that are provided in India (Dyer et al. 2015). The business prospects in different sectors in
India are much more effective for the expansion related operations of CHEERS. Different
types of business formats have been highly successful in India and CHEERS will also be
provided with major levels of chances in order to expand the levels of profitability (Kota
2018).
Discuss and justify the proposed mode of entry for chosen country
As discussed by Frynas and Mellahi (2015), CHEERS can enter the Indian market
with help of proper entry mode in order to rise its profitability levels in an effective manner.

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The customer base of the organization can also be increased with the implementation of
proper market entry mode. Strategic planning is considered to be a significant process which
plays a major part in selection of proper market entry mode. The target market identification
process is an important part of the entire process that is related to mode of entering the
market. The process of licensing is considered to be the most effective for entering the Indian
market.
As argued by Hill, Jones and Schilling (2014), the organization can enter the food and
beverage based industry that is highly growing and competitive in nature. CHEERS can
thereby establish its operations in the country with the help of a parent organization. This will
be a low risk based process that can help the organization to expand its operations in the
country. The proper availability of a parent company will be able to play the most important
part in the ways by which CHEERS can enhanced its operations in the food and beverage
based industry. The licensing based strategy of market entry can provide the growth based
opportunities to the organization with lower amounts of risk. The operations can be started by
the company with the help of a parent organization that is already operating in India and has
effective knowledge about the market as well (Hubbard, Rice and Galvin 2014).
Suggest and justify the marketing strategy to be adopted by the company
As discussed by Meyer, Neck and Meeks (2017), the marketing strategy that can be
implemented by CHEERS in India is based on the long term based operations of the company
in food and beverage based industry. The marketing strategy of the organization is based on
different aspects that include, product line based strategy, brand positioning strategy and
market expansion strategy. The product line of CHEERS can be decided with respect to the
target audience in India. The target audience can be satisfied by different types of products
that can be offered based on their needs and demands.

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According to Michael, Storey and Thomas (2017), the strategy related to market
expansion can affect the ways by which the organization can increase the number of stores
that will operate in the country. The market needs to be expanded in such a manner which can
help the organization to reach larger number of customers with the help of its products. The
strategy based on market expansion will be able to play a key part in the methods by which
the can develop its market. The food and beverage industry is highly competitive in nature
and can provide major opportunities to CHEERS in order to create a different customer base.
Brand positioning strategy is a major factor that can help the organization to develop
its position in the market and in the minds of the consumers. The process of brand positioning
is considered to be important for CHEERS for the development of the position in the
industry. The positioning of the brand will be based on the development of Craft Beer in the
food and beverage industry. Proper brand positioning will be able to provide major levels of
support to the organization based on the ways by which its unique products can be offered to
the customers (Moroni, Arruda and Araujo 2015).
Suggest and justify the human resource strategy to be adopted by the company
As discussed by Morschett, Schramm-Klein and Zentes (2015), CHEERS can
implement GloCal strategy for its successful operations in India. The employees need to be
provided with highest stages of significance by the company. The employment of local
people in the operations will be able to play a key part in the methods by which the company
can attract the customers. The local approach can play a main part in the ways by which
CHEERS can appeal to the consumers in the country. Strategic investment in the human
resources of the company is an important factor that has a major impact on the operations.
According to Sakas, Vlachos and Nasiopoulos (2014), CHEERS also needs to make
specific levels of investment in the improvement of human resources of the company. The

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process of proper strategic planning is able to play a major part in the methods by which
CHEERS will be able to satisfy the needs and demands of the consumers. The company will
pay major levels of attention to the process of proper recruitment and selection. The
motivation levels of employees can be increased effectively with the help of proper human
resource based practices of the organization. The dedication levels of employees can be
increased by CHEERS in order to operate profitably in the beverage based industry (Paul and
Mas 2016).
The process of decision making that can be implemented by CHEERS will be
decentralized in nature. The employee structure of the organization will be formed in such a
manner so that the different decisions can be made in an effective manner and within less
amounts of time. The middle management can be provided with encouragement in order to
make the decisions of the team and provide encouragement to the employees as well. The
proper involvement of employees in the decision making process can help the organization to
develop its position in the market (Steinbach et al. 2017).
Conclusion
The report can be settled by stating that CHEERS can think of expanding its
operations in the Indian food and beverage based industry. The opportunities that will be
provided to the company by its operations in India can be helpful in increasing its presence
and operation levels as well. The food and beverage based market of Brazil is not suitable for
the company due to the lack of proper business based environment in the country. India on
the other hand is able to provide huge opportunities of development to the organization with
the help of its free market based economy. The organization will be able to develop a huge
customer base with the help of huge demands of the products that can be offered by the
organization. The human resource based strategy and marketing strategy that will be

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implemented by CHEERS in India will be able to play a key part in appropriate development
of levels of profitability. The entry mode of licensing that has been selected by the
organization will provide major chances of growth to the organization. The company will be
able to develop the levels of profitability in the food and beverage based industry with the
help of its operations. The expansion of the organization in India will prove to be a major step
towards the improvement of its operations and increasing the levels of awareness as well.

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