International Business Strategy SICA Question Answer 2022

Running head: INTERNATIONAL BUSINESS STRATEGY
INTERNATIONAL BUSINESS STRATEGY
Name of the student
Name of the university
Author notes

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INTERNATIONAL BUSINESS STRATEGY
Table of Contents
Answer to Question 1:................................................................................................................2
SICA expansion to a new country..............................................................................................2
Germany as an Effective Market............................................................................................2
Objectives of Expansion........................................................................................................2
Reason for Choosing Germany..............................................................................................3
Answer to Question 3.................................................................................................................4
Don Café as a global brand........................................................................................................4
Answer to Question 4:................................................................................................................6
Structural or Strategic changes for SICA...................................................................................6
References..................................................................................................................................9

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INTERNATIONAL BUSINESS STRATEGY
Answer to Question 1:
SICA expansion to a new country
Entering the new market is the sign of company growth and most of the business big
names has considered expansion as an effective medium of growth. Companies have to rely
on different entry mode in a specific countries depending of more than one internal and
external factors (Hitt, Li & Xu, 2016). SICA has been quite successful in its business
ventures in Equator. With growing market competition, the instant coffee production
company also has the scope of expanding its business in new markets. SICA has its export
business in a number of countries all around the world. But when it comes to the expansion,
the best choice for the country would be Germany.
Germany as an Effective Market
Objectives of Expansion
First thing that need to be designed for the expansion purpose of SICA is their objectives for
expansion. Among the expansion goals the primary three are expansion of profit and sales,
acquisition of the resources and risk reduction.
 Expansion in sales will enable the company to have increased profit margins. Entering
a new market with the existing product range of SICA will increase the potential
market for the company. SICA will try to increase their sales market share by 2% in
the first year of market entry.
 The foreign country resources can be used in increasing the market performance of
the company both in local and international market.
 The risk of profit-loss cycle will be reduced if SICA is been able to expand their
product sales in the new market.

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INTERNATIONAL BUSINESS STRATEGY
Reason for Choosing Germany
Coffee manufacturing companies target to the country market that have the highest
demand for their products. Keeping with the objectives of SICA and analysing the market
scope for instant coffee business, Germany can be considered as the most profitable option
for expansion. This statement can be established after analysing some factors of Germany
operating environment
Physical and Institutional Factors
Cultural factors
Germany is the country that has been accounted for 26% of total coffee consumption of
Europe in the year 2018 (Volinchak et al., 2018). People in this country are interested in the
instant coffee and therefore, the products of SICA would be in great demand in this country.
SICA will get the solid customers base in this country for the coffee preferences on German
people. Again, the work culture of this country is quite impressive. The employment relations
are good than other European countries in context. Workforce for the production is available
and they have the skills and competence to manage the work pressure.
Economic Factors
Germany is economically settles country the number of recession are less in compare to the
other European country. The coffee production industry of this country has the business of
over USD 7,744.96 million in 2019 (Volinchak et al., 2018). These statistics shows that if
SICA tries to implement their plants for instant coffee, they can ensure a good cash flow
through quality products. As the inflation rate of the country is low and the GDP is high, the
economic challenges are less in Germany.
Political and Legal Factors