Foreign Market Opportunity for Koala Cookies: A Market Analysis of China, India, and Brazil

This report analyzes the external business factors and market situations of China, India, and Brazil as potential foreign markets for Koala Cookies. It concludes that India is the most effective host country and recommends a joint venture strategy for market entry.

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Executive summary
The aim of this report is to discuss about the foreign market opportunity for Koala cookies.
China, India and Brazil are being chosen as the potential target market for Koala cookies. All the
three countries are being evaluated and analyzed in terms of their external business factors and
market situation. This report concludes that India will be the most effective and idea host country
for Koala cookies. In addition, the market entry strategy is also being suggested and it is
concluded that Koala cookies should initiate joint venture strategy in entering the Indian market.

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Table of Contents
Introduction......................................................................................................................................3
Market analysis of China.................................................................................................................3
Market Analysis of Brazil................................................................................................................5
Market analysis of India..................................................................................................................7
Industry analysis of China...............................................................................................................9
Industry analysis of Brazil.............................................................................................................10
Industry analysis of India...............................................................................................................10
Evaluation of potential markets.....................................................................................................11
Conclusion and recommendation..................................................................................................11
Reference.......................................................................................................................................13
Appendix........................................................................................................................................15

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Introduction
In the current business scenario, it is becoming more important for the contemporary
business organizations to search for the potential foreign markets to enter. This is due to the
reason that with the entry in the foreign countries, the business scope and market size and
revenue will get increased. In the current ear of globalization, the competition is also huge with
the entry of number of global brands. Thus, the more will be the scope of potential foreign
markets, the more will be the business opportunity for the organizations (Gnizy, Baker &
Grinstein, 2014). However, in the order to select the potential foreign markets, it is important to
determine and evaluate different parameters and aspects of the target country.
Koala cookies Australia is small and niche cookies and biscuits manufacturers. They are
having small scale of operations currently but they are thinking of going global and enhance their
business. Their family recipe based cookies can be competitive in the international market. Three
countries, India, China and Brazil are being recommended as the potential target country due to
their immense market opportunities.
This report will discuss about the external business factors that may be faced Koala
cookies in doing business in these three identified countries. In addition, the competitive analysis
will also be conducted for each of these countries. This report will conclude with the most
potential country for Koala cookies along with the recommended market entry strategy.
Market analysis of China
Political and regulatory
environment
 China is having communist type of government with
stricter rules and regulations (Li & Qian, 2013).
 It may be difficult for Koala cookies to get adjusted with

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communist political scenario being from market oriented
home country.
 It is anticipated that more harsh rules will get introduced
in regards to the present tension in the international trade
environment (De Villa, Rajwani & Lawton, 2015).
Economic environment  China is one of the leading countries in the world in
terms of economic growth (Bashir et al., 2014). Thus,
the market opportunity will be more for Koala cookies.
 According to reports, the economic growth of the
country will be positive in the coming years also.
 Government is initiating more business friendly
activities to prefer foreign investments.
Social and demographic
environment
 China is largest country in the world in terms of
population. Thus, Koala cookies will have huge market.
 According to the reports, majority of the population is
on middle age. Thus, market for cookies and biscuits
will be favorable.
 Chinese culture is becoming more adaptive towards
global culture.
Technological environment  China is the leading country in the world in initiating
new technologies.
 Cost of technology is also low in China compared to
some other countries.

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 However, it may get difficult for Koala cookies to
transfer technology due to regulations of China.
Natural environment  China is having diverse climatic factors.
 Koala cookies will find harsh summer to chilled winter.
 However, climatic factors are having less impact on
their products.
Physical environment  China is having the ranking of 47 in terms of overall
infrastructure in global competitiveness index
(Www3.weforum.org, 2018).
 Railroad infrastructure is favorable in China.
 However, China is having lower ranking in terms of
telecommunication facilities.
Market Analysis of Brazil
Political and regulatory
environment
 Brazil is having democratic type of government with
having history of instability (Ireland, 2018).
 Brazil is also more adhered to capitalist economy.
 However, there are limitations and restrictions in terms
of foreign direct investments.
Economic environment  Brazil is having the 8th ranking in terms of economic
growth.
 It is considered as a leading developing country.

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 However the fluctuations in the growth rate may have
negative impact on business (Bildirici & Bakirtas,
2014).
Social and demographic
environment
 Brazil is fifth most populated country in the world.
 One of the youngest countries with having largely young
population.
 Population is increasing in rapid rate and thus market
opportunity is increasing rapidly.
Technological environment  According to the global competitiveness index, Brazil is
having the ranking of 78 in terms of availability of latest
technologies (Www3.weforum.org, 2018). Thus, Koala
cookies may find it difficult in having latest
technologies.
 However, technology transfer will be easier for Koala
cookies in Brazil.
 With the growth in the economy, technology is
becoming more accessible in Brazil.
Natural environment  Brazil is having more favorable climatic conditions.
 Less probability of extreme weather conditions.
 Preferable for business organizations.
Physical environment  Brazil is ranked at 108 in terms of overall infrastructure
according to global competitive index
(Www3.weforum.org, 2018).

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 Thus, Koala cookies will find it difficult in transporting
their materials.
 However, Brazil is more favorable in terms of online
connections. Thus, Koala cookies should use the online
mediums more.
Market analysis of India
Political and regulatory
environment
 India is the largest democracy in the world with having
stable government and political scenario (Singh, 2018).
 Foreign direct investments are being given number of
facilities.
 Business friendly regulations are attracting more
investments in the recent years.
Economic environment  India is the top most country in the world in terms of
economic growth (Agarwal & Whalley, 2015).
 Thus, market is becoming more potential for the
business.
 It is estimated that India will remain the top country in
terms of economical growth in the next few years.
Social and demographic
environment
 India is the second largest country in the world in terms
of population (Buhang & Urdal, 2013). Thus market size
is also favorable for Koala cookies.
 India is becoming more globalized culture in the recent

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time and thus Koala cookies will have favorable
environment to sell their products.
 India is having fairly large section of younger
population. Thus, the demand for cookies will be more
in this market.
Technological environment  India is rapidly growing in terms of technology and with
the increase in foreign investment; more updated
technologies are being made available in the country.
 India is having the ranking of 72 in terms of availability
of latest technologies according to global
competitiveness index (Www3.weforum.org, 2018).
Thus, having the access to the latest technologies can be
an issue for Koala cookies.
 India is having the ranking of 59 in terms of technology
transfer and thus Koala cookies can transfer their
technologies easily.
Natural environment  India is having diverse weather condition along with
having some extreme climatic factors.
 Summer and humid climate is the most common
occurrence.
 However, climatic factors are having less impact on the
business potentiality in the Indian market.
Physical environment  According to the global competitiveness index, India is

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having the ranking of 46 in terms of overall
infrastructure (Www3.weforum.org, 2018). Thus, the
physical environment for Koala cookies will largely be
favorable.
 Railroad is extensive and vast in India and thus Koala
cookies will have relatively less cost in transportation.
 Investment in improving the infrastructure is also
increasing in the recent time.
Industry analysis of China
According to the reports, confectionary industry of China is standing at US$ 23,591
million. It is also estimated that the revenue of the confectionary industry will touch US$ 28,000
million. Thus, the growth is favorable. However, it is also being reported that in the last few
years, the growth rate of confectionary sector is fluctuating and currently it is growing at the rate
of 3.5 percent (www.statista.com, 2018). Thus, in china, Koala cookies will have good market
opportunities. It should also be noted that Koala cookies cannot position their products in growth
stage of the product life cycle in China due to the reason that already there are number of family
and niche cookie brand are available. Cookie and biscuits are much popular in China. Thus, the
intensity of the competition will be high for Koala cookies in Chinese market.
Industry analysis of Brazil
It is reported that confectionary sector in Brazil is currently standing at US$ 15,819
million. It is also estimated that confectionary industry will grow at the rate of 5 percent till 2021

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(www.statista.com, 2018). Thus, the Brazilian market is also potential similar to China for Koala
cookies. It is also reported that the average consumption of confectionary items will get
significantly increased in the next few years. In addition, it is also stated that offline is the major
source of medium in this industry to generate revenue. In terms of the product life cycle, Koala
cookies can position their products in the growth stage given that they will introduce distinctive
products in the market. The intensity of the competition in the confectionery industry of Brazil is
lower compared to that of China. Confectionary industry is Brazil is majorly organized but the
scope of family recipe based niche cookies is less and thus, the intensity of the competition will
be less for Koala cookies.
Industry analysis of India
Currently, confectionery industry of India is standing at US$ 10,298 million. Thus, the
market revenue of India is lower compared to Brazil and China. However, it is estimated that the
confectionery industry will grow at 10.3 percent per annum till 2021 (www.statista.com, 2018).
Thus, the growth rate is more compared to that of Brazil and China. This is denoting that the
confectionery industry of India is still in the nascent stage and there is huge growth opportunity
for the organizations. In the Indian market, Koala cookies can position their products in the
growth stage as per the product life cycle. This is due to the reason that family recipe based
cookie is a new concept in the Indian market and thus Koala cookies will have the advantage to
have the availability of having the entire life cycle for their products. In addition, due to the fact
that family recipe based cookies will be a new and niche concept in the Indian market, thus the
intensity of the competition will also be the lowest compared to other two countries.
Evaluation of potential markets

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In the above sections, the market and business factors and opportunities are being
discussed of India, China and Brazil. All these countries are having immense market size and
opportunities. China is having the advantage of huge market size and positive economic growth
but the intensity of the competition will be more. In addition, Brazil is having the advantages of
market size, favorable climatic conditions and social structure but they are trailing in terms of
their economic growth. On the other hand, India is having huge market size and positive
economic growth along with huge growth opportunities in confectionery sector (Narlikar, 2013).
Thus, it is recommended that India will be the most potential country for Koala cookies. This is
due to the reason that entering in the Indian market will help Koala cookies to have the hugely
untapped market for business. In addition, the rapid growth of the economy of India will also
enable Koala cookies to increase their business potentiality in the next few years.
Conclusion and recommendation
Thus, it is concluded that India will be the most potential and ideal country of operation
for Koala cookies. This report discussed about the different external business factors and market
elements of China, Brazil and India. All the countries are having business potentiality for Koala
cookies but compared to others, India poses more opportunities for them. It is also recommended
that Koala cookies should opt for joint venture market entry strategy in operating in India. This is
due to the reason that opting for the foreign direct investment will have more cost and risk
involvement for them. On the other hand, initiating of direct exporting strategy will increase the
cost of their products that will in turn reduce the market opportunity. Thus, it is recommended
that joint venture strategy should be initiated in partnering with a local brand in India. This will
enable Koala cookies to have less amount of capital investment along with the having the
expertise of the local firm in managing the Indian market effectively. Initiation of the joint

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venture strategy will also enable Koala cookies to effectively determine the taste and preference
pattern of the local market.

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Reference
Agarwal, M., & Whalley, J. (2015). The 1991 reforms, Indian economic growth, and social
progress. In WORLD SCIENTIFIC REFERENCE ON ASIA AND THE WORLD
ECONOMY (pp. 3-22).
Bashir, T., Mansha, A., Zulfiqar, R., & Riaz, R. (2014). Impact of FDI on economy growth: a
comparison of South Asian States & China. European Scientific Journal, ESJ, 10(1).
Bildirici, M. E., & Bakirtas, T. (2014). The relationship among oil, natural gas and coal
consumption and economic growth in BRICTS (Brazil, Russian, India, China, Turkey
and South Africa) countries. Energy, 65, 134-144.
Buhaug, H., & Urdal, H. (2013). An urbanization bomb? Population growth and social disorder
in cities. Global Environmental Change, 23(1), 1-10.
De Villa, M. A., Rajwani, T., & Lawton, T. (2015). Market entry modes in a multipolar world:
Untangling the moderating effect of the political environment. International Business
Review, 24(3), 419-429.
Gnizy, I., E. Baker, W., & Grinstein, A. (2014). Proactive learning culture: A dynamic capability
and key success factor for SMEs entering foreign markets. International Marketing
Review, 31(5), 477-505.
Ireland, R. (2018). Pentecostalism, conversions, and politics in Brazil. In Power, Politics, and
Pentecostals in Latin America (pp. 123-137). Routledge.
Li, J., & Qian, C. (2013). Principal‐principal conflicts under weak institutions: A study of
corporate takeovers in China. Strategic Management Journal, 34(4), 498-508.

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Narlikar, A. (2013). India rising: responsible to whom?. International Affairs, 89(3), 595-614.
Singh, M. P. (2018). Federalism: Constitution and Dynamics. Indian Political System, 145.
www.statista.com. (2018). Confectionery - India | Statista Market Forecast. Retrieved from
https://www.statista.com/outlook/40100000/119/confectionery/india#market-arpu
Www3.weforum.org. (2018). Retrieved from http://www3.weforum.org/docs/GCR2017-
2018/05FullReport/TheGlobalCompetitivenessReport2017%E2%80%932018.pdf

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Appendix
Confectionery industry of India
Confectionery industry of China

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Confectionery industry of Brazil
Growth rate of Indian economy

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Growth rate of Chinese economy
Growth rate of Brazilian economy