Market Entry Analysis for Frosty Boy: South Africa vs Turkey

This report provides a market entry analysis for Frosty Boy, an Australian manufacturer and distributor of frozen yogurt, soft serves, and beverages. The report compares South Africa and Turkey as potential expansion markets, using the CAGE framework and a SWOT analysis. The report recommends South Africa as the better choice due to cultural similarities, language, and competition.

Running Head: Market Entry Analysis
MARKET ENTRY ANALYSIS

Market Entry Analysis
Executive Summary
South Africa has chosen between South Africa and Turkey to expand the business of
Frosty Boy because of cultural reasons. There is common official language between South Africa
and Australia as English that makes the communication easier between Australia and South
Africa. Another main reason to choose South Africa is the distance as the distance between
South Africa and Australia is less than the distance between Australia and Turkey. So, the
business processes can be done easily.
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Market Entry Analysis
Table of Contents
1. Company Background.................................................................................................................4
2. Situations analysis.......................................................................................................................4
3. Market analysis............................................................................................................................5
4. Ethical Considerations.................................................................................................................7
5. Recommendations........................................................................................................................7
Reference list...................................................................................................................................9
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Market Entry Analysis
1. Company Background
Company’s target segment
Frosty Boy is an Australia manufacturer as well as distributor of frozen yogurt, beverages
and soft serves which works internationally. Frosty Boy being a company of frozen yogurt, soft
serves and beverages, targets mainly the children and the youths of Australia.
4ps of products
Products
The main products of Frosty Boy are frozen yogurt, soft serves, beverages, toppings,
syrups, granita and many others (Frosty Boy, 2018).
Price
The price of the products is low however these are being delivered with high quality.
Place
Frosty Boy works in 54 countries and the headquarters is in Yatala, Queensland,
Australia. The number of countries for expansion is growing day by day.
Promotion
Several types of promotional strategies are used by the concerned company such as social
media promotion, physical promotion, and departmental promotion. Even, the company is
attempting to expand its business in Turkey or South Africa based on their social media
promotional strategy.
7Ps for Services
Product: The products are determined with handling the larger scale specific volumes of units.
Price: This is about the handling of marketing segments and how the products are produced for a
better development in market.
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Market Entry Analysis
Place: The elements are depending upon the customer availability. The product is not available
in all the locations.
Promotion: The promotional programmes include the planning in the way how the customer
approaches and Frost Company is able to serve them.
People: The people works on handling the customer contacts, personnel and management for
working to administer and monitor the quality of the service.
Processes: The processes include the procedures, activities, protocols and the events which are
for handling the step sequences and activities.
Physical Evidences: The evidences refer to the representation for the instance brochures of ice
creams and the designing, or the business cars or the company website.
Competitive advantage
As the company is selling the high-quality products at low cost so there is high chance of
getting competitive advantages over their Australian competitors.
2. Situations analysis
Internal strength
● A well-known brand of Australia
● High product quality
● Low prices of products
Internal Weakness
● Targets mainly local Australian
● Dependence on few products
External Opportunities
● Can attract adults as well as old people
towards frozen yogurt
● Expansion of business in South Africa
External Threats
● Increasing the price of dairy products
● Maintaining good quality in challenges
● Occurrence of cattle diseases
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Market Entry Analysis
and turkey based on CAGE framework
● Increase the prices of soft serves due
to high demand
● Stiff competition among frozen yogurt
companies
Table 1: SWOT analysis
(Source: Created by Author)
3. Market analysis
CAGE framework on Australia Vs South Africa
Figure 1: Cage Framework Australia Vs South Africa
(Source: CAGE Framework, 2018)
Cultural Distance
Both South Africa and Australia are multicultural countries but there is difference
between them in meaning. As stated by De, Vroom & Øverbye (2017), in South Africa, people
having different culture live together but in Australia, people having same culture but different
faced colored live together. So, there will be different in taste of people of South Africa. In
Australia, language barrier is less as English is considered to be official language. However, on
the contrary, South Africa has range of languages including English, Ndebele, Swazi, Sotho, and
Northern Sotho.
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Market Entry Analysis
In Australia, there is a single administrative law but in South Africa, a bunch of laws
makes administrative. So, there is administrative difference between Australia and South Africa.
There is no colonial linkage between Australia and South Africa. Between Australia and South
Africa, there is not any trade agreement yet done. In accordance to Grant (2016), there is also not
any regional bloc between South Africa and Australia. The physical distance between Australia
and South Africa is 10497 km but there is no any common border between them. The GDP
(Gross Domestic Product) of South Africa is 0.43% in comparison to Australia.
Difference between host environment of Australia and South Africa
As there is difference in culture of the people of Australia and that of South Africa, so
they have different behavior of buying. As stated by Chen et al. (2017), the consumers of
Australia understand the quality of products and prefer healthy products and they are always
ready to pay more for the good quality products and the consumers of South Africa prefer brand
but they think a lot of time to pay whether the price is fair or not. In accordance to Eriksson et al.
(2015), there is good opportunity for growth in South Africa as the people of South Africa prefer
soft serves, frozen yogurt. The competitive products of soft serves and frozen yogurt in South
Africa are Gatti, Country Fresh, Polar and many more. There is good competition between
frozen yogurt and soft serves in South Africa.
CAGE framework on Australia Vs Turkey
Figure 1: CAGE framework on Australia Vs Turkey
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Market Entry Analysis
(Source: CAGE Framework, 2018)
There is not any cultural similarity between the people of Australia and Turkey. The
culture of Turkey is totally different than the culture of Australia. As stated by Hollender,
Zapkau & Schwens (2017), the common language of Australia is English but the common
language of Turkey is Turkish and some other languages of Turkey are Arabic, Kurmanji and
Zazaki and many more. So, there is no common official language of Australia and Turkey. So,
there will be communication issues. There is not any colonial linkage. There is not any previous
trade agreement of Australia and Turkey and there is also not any regional bloc. The physical
distance between Australia and Turkey is 14181 km which is very high and also there is no
common border between Australia and Turkey. The GDP (Gross Domestic Product) of Turkey is
1% in comparison with Australia.
Difference between host environment of Australia and Turkey
As there is difference between the culture of people of Australia and that of Turkey, so
they have different behavior of buying. In accordance to Kramarz & Skans (2014), the
consumers of Australia understand the quality of products and prefer healthy products and they
are always ready to pay more for the good quality products but the consumer of Turkey are
aware of quality but they take inquiry about condition of payment. The people of Turkey prefer
soft serves and frozen yogurt so there is also good opportunity for growth. The competitive
company of frozen yogurt and soft serves in Turkey is Mado and many more. There is not more
competition of frozen yogurt and soft serve in Turkey.
4. Ethical Considerations
Under ethical consideration, frosty boy must ensure human relation legislation of the
countries. In Australia, being a frozen ice cream company, it needs to abide by fair work relation
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Market Entry Analysis
2009 and public sector management act 1995. On the contrary in South Africa, companies need
to follow The Labor Relations Act 66 of 1995. The codes are similar in these legislation, which
can benefit frosty boy while their expansion in South Africa. In comparison to turkey, CSR is
managed by Corporate Social Responsibility Association of Turkey (CSR Turkey). This helps
companies and firms to maintain environmental sustainability. As stated by Rauschnabel, Brem
& Ivens (2015), in Turkey, multiculturalism is one of the main cultural hindrances. In
comparison to turkey, CSR is managed by Corporate Social Responsibility Association of
Turkey (CSR Turkey). This helps companies and firms to maintain environmental sustainability.
In comparison to Australia, Turkey's CSR Organization ensures that employees are more active
and motivated towards their work. In Australia, public-private collaboration is another CSR
initiative that ensures globalization. Thus, both countries have growth opportunity for frosty boy
with their CSR administration.
5. Recommendations
After discussing a lot of things about South Africa and Turkey, South Africa can be
chosen to expand by Frosty Boy to expand the business. The people of South Africa are
multicultural and their tastes differ from each other and they like different varieties so there are
good chances of growth. The GDP (Gross Domestic Product) of Turkey is 1% in comparison
with Australia and the GDP of South Africa is 0.43% in comparison with Australia. The GDP of
Turkey is higher than South Africa but as Frosty Boy is a food industry, so cultural and language
factors are more important than GDP to grow the business.
Distance
As the distance between South Africa and Australia is less than the distance between
Turkey and Australia, so it will be much easier to work in South Africa than in Turkey.
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Market Entry Analysis
Common Language
Common language is very important to do business with another country because it is
way of their communication. As there is no common language of Turkey and Australia so it will
be difficult to communicate for business purpose and the company will face problem after in the
beginning. South Africa, having English as a common language to Australia, no communication
problem will occur.
Competition
In South Africa, many other companies are doing business of frozen yogurt and soft serves like
Gatti, Country Fresh, and Polar. So, South Africa is in growing condition in that sector. In
Turkey, there is very few companies are doing business of frozen yogurt and soft serves like
Mado. It can be said that Turkey has space to grow the business of Frosty Boy but it is the fact
that the business runs fast when it faces competition. So, South Africa is a good choice to expand
business of Frosty Boy.
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Market Entry Analysis
Reference list
Books
De Vroom, B., & Øverbye, E. (2017). Ageing and the transition to retirement: A comparative
analysis of European welfare states.Abingdon: Routledge. Retrieved from:
https://www.taylorfrancis.com/books/9781351960267
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons. Retrieved from: https://books.google.co.in/books?
hl=en&lr=&id=DTDvCQAAQBAJ&oi=fnd&pg=PP15&dq=Market+Entry+Analysis+bo
ok&ots=emLNhGg41G&sig=DZUQzvK6u9G8tpLPpFkiqDcfyxA#v=onepage&q=Mark
et%20Entry%20Analysis%20book&f=false
Journals
Chen, P. L., Kor, Y., Mahoney, J. T., & Tan, D. (2017). Pre‐Market Entry Experience and Post‐
Market Entry Learning of the Board of Directors: Implications for Post‐Entry
Performance. Strategic Entrepreneurship Journal, 11(4), 441-463. Retrieved from:
https://onlinelibrary.wiley.com/doi/abs/10.1002/sej.1251
Eriksson, K., Johanson, J., Majkgård, A., & Sharma, D. D. (2015). Experiential knowledge and
cost in the internationalization process. In Knowledge, Networks and Power (pp. 41-63).
Palgrave Macmillan, London.Retrieved from:
https://link.springer.com/chapter/10.1057/9781137508829_2
Hollender, L., Zapkau, F. B., & Schwens, C. (2017). SME foreign market entry mode choice and
foreign venture performance: The moderating effect of international experience and
product adaptation. International Business Review, 26(2), 250-263.Retrieved from:
https://www.sciencedirect.com/science/article/abs/pii/S0969593116301056
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Market Entry Analysis
Kramarz, F., & Skans, O. N. (2014). When strong ties are strong: Networks and youth labour
market entry. Review of Economic Studies, 81(3), 1164-1200. Retrieved from:
https://academic.oup.com/restud/article-abstract/81/3/1164/1599488
Rauschnabel, P. A., Brem, A., & Ivens, B. S. (2015). Who will buy smart glasses? Empirical
results of two pre-market-entry studies on the role of personality in individual awareness
and intended adoption of Google Glass wearables. Computers in Human Behavior, 49,
635-647. Retrieved from:
https://www.sciencedirect.com/science/article/pii/S0747563215001880
Website
CAGE Framework, (2018), Country analysis, Retrieved from https://ghemawat.com/cage on
23rd August 2018
Frosty Boy, (2018), Products & services, Retrieved from:
http://www.frostyboy.com.au/products-services on 30th July 2018
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