Amcor's International Business Strategy: Mexico Market Analysis Report

This report analyzes Amcor's international business strategy, specifically focusing on its potential expansion into the Mexican market. The report begins with an introduction to international marketing and the rationale for Amcor's expansion. It then delves into a comprehensive market analysis, examining the market size, growth rates, and population of Mexico, followed by an assessment of market barriers and drivers. An organizational analysis is conducted, including a customer audit and buyer behavior assessment, along with an examination of the 4Ps of marketing (Product, Price, Promotion, and Place). Competitor analysis is performed to evaluate the competitive landscape, including the identification of Amcor's competitive advantages. Strategic tools like Porter's Five Forces model, the Value Chain, the BCG Matrix, and SWOT analysis are employed to understand the macro-environment and formulate strategic recommendations. The report concludes with a summary of findings and recommendations for Amcor's successful entry into the Mexican market.

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INTERNATIONAL BUSINESS
NAME OF THE STUDENT:
STUDENT’S ID:
NAME OF THE UNIVERSITY:

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Contents
Introduction......................................................................................................................................3
Market analysis................................................................................................................................4
Size of the Market and growth rates............................................................................................4
Population....................................................................................................................................5
Market Barriers and Market Drivers............................................................................................6
Organizational Analysis...................................................................................................................7
Customer Audit and Buyer behavior...........................................................................................7
4P’s...............................................................................................................................................9
Competitor Analysis..................................................................................................................10
Competitor Advantage of your Product.....................................................................................11
Positioning Map of Competitors................................................................................................12
Macro environment........................................................................................................................13
Porter five forces model.............................................................................................................13
Value Chain................................................................................................................................14
BCG Matrix................................................................................................................................15
SWOT Analysis.............................................................................................................................16
Conclusion.....................................................................................................................................17
References......................................................................................................................................18

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Introduction
International marketing is necessary for every organization to effectively market their goods and
services on a global basis and thereby gain larger market base and higher profit. This particular
study deals with the concept of global marketing and discusses the advantages and risks
concerned with international marketing.
Amcor Limited is a multinational packaging company based in Australia that produces both
flexible and rigid plastic packaging. Being a well-known organization in Australia, the company
aims to expand its business internationally. This particular report will discuss the expansion of
Amcor in the markets of Mexico. Among the main products of Amcor such as the packaging of
good, household items, hospital items, industrial applications, hospital packaging
pharmaceuticals and others. Amcor decides to export its new products into the market of Mexico.
This report, therefore, discusses the export of packaging material for alcohol wipes and iodine
pad.
In order to understand the risks and benefits involved in the international marketing of Amcor in
Mexico, the situation analysis of Amcor will be performed. In the situation analysis, market
analysis, competitive analysis, and organizational analysis will be conducted. It will help to
understand the market for in Mexico in a better way. In addition to that, the Porter's five force
analysis, BCG matrix, value chain analysis and the SWOT analysis will be performed to get a
proper knowledge of the strengths, weakness, opportunity, and threats Amcor will have if it
introduces its product into the markets of Mexico.

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Market analysis
Size of the Market and growth rates
The market size of Amcor in Mexico is quite favorable for the business to grow. The
macroeconomic performance of Mexico has developed as a result of the active fiscal and
monetary policies. The business formation by Amcor becomes relatively easier in Mexico as the
regulations regarding commercial operations are more streamlined (Nahavandi, 2016).
Figure 2: Development in the economic performance of Mexico
(Source: Nahavandi, 2016)
The market share is protected as the other strategy as the managers should aim to resolve the
issues which may be a weakness of the company which is also an advantage to the competitor in
the market. The managers should keep the prices of the products affordable for the customers to
also improve the brand image. Later, the managers should also focus on the increment in the
market shares as this helps to increase the sales of products as 1% increase in the shares can
assist in the profit to around millions of dollars to the company (Cavusgil et al. 2014).
Furthermore, the active promotions are also capable of building a large audience and also the
employees should interact with the customers to help them with the products and services that

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the Amcor offers. Additionally, including different types of technologies to let the customers
simplify their shopping sessions which involve the self-service box as this can make the
customers, to easily scan the items and also the payment of their bills.
Population
The current population of Mexico as per the statistical records of August 2017, is 130,403, 681.
It is equivalent to almost 1.73% of the total population of the world. The GDP per capita as per
the record of 2016 is 8,201.31 USD while the Gross Domestic Product itself is 1.046 trillion
USD. This infers that Mexico has a large customer base and the GDP denotes that the purchasing
power of the population is high enough (Czinkota & Ronkainen, 2013). Therefore, it can be
assumed that Amcor will have a strong demand for its antimicrobial packaging product in the
markets of Mexico.
Figure 2: Population growth in Mexico

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(Source: Czinkota & Ronkainen, 2013)
Market Barriers and Market Drivers
The exporters have under-appreciated Mexico due to its size and diversity. In addition to that,
there is a huge difference between their legal systems and the legal systems of other countries. It
becomes an issue for the exporters to discuss and decide on the legal counseling before entering
into business agreements with the partners in Mexico. Mexico follows Civil Code of Law, and
NAFTA guides the international laws. Thus, Amcor needs to have a proper knowledge about
NAFTA so that it can abide by those rules without any complications (Choi & Yeniyurt, 2015).
In addition to that, there is a relatively higher interest rate in Mexico although there has been
growth in the economy after the stagnation. Even though the Mexican Government shows
immense effort to increase capital for business, the companies find it difficult to receive finances
at a reasonable rate. Another pitfall of marketing in Mexico is its custom regulation, standard
products, and the laws concerning labors. Some areas of Mexico are further insecure for business
due to its continued violence and the involvement of criminal organizations. These are certain
barriers that Amcor has to face if it introduces its new antimicrobial packaging product in
Mexico.
However, there are individual market drivers to that influence marketers, investors and
companies to carry out business in the markets of Mexico. At times in the government of Mexico
imposed a tariff on goods that ranged from 165 percent to 1000 percent. However, the tariff rate
had been revised in the year 2011 at 35%. This caused some companies to enter into a
partnership with Mexico. The real estate sector in Mexico, on the other hand, generated $3
billion in 2014. This acted as one of the primary reason for the growth of business in Mexico
(Katsikeas, 2014). The middle-class section of Mexico makes about 53 percent of their total

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population. In the recent times, it has been noticed that the middle class has been proliferating.
The middle-class individual is recently claimed to have a standard disposable income, and it has,
therefore, become a primary target for the industries. 50 percent of the customer base for the
major department stores in Mexico is formed by these middle-class citizens (Refer to appendix).
Organizational Analysis
Customer Audit and Buyer behavior
It is important for Amcor to completely understand what influences its customer’s behavior in
order to build an effective marketing strategy. The consumer behavior audit of Amcor is
simplified and generalized below:
Metrics Components
Areas of marketing decision  Market segmentation
 Product positioning
 Customer satisfaction
External influence  Culture, subculture, and values
 Demographics, income, and social
class
 Reference groups and
family/households
 Marketing activities by the company
Internal influence  Needs, motives, and emotions
 Perceptions, learning, and memory
 Personality and lifestyle
 Attitudes
Situation influences  Physical features
 Time perspective

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 Social surroundings
 Task definition
 Antecedent states and situations
Decision process influence  Problem recognition
 Information search
 Alternative evaluation
 Outlet selection
 Purchase
 Post-purchase processes
Table 1: Customer Audit and Buyer behavior
(Source: Fletcher & Crawford, 2013)
Areas of marketing decision- This can be considered as the market segmentation of Amcor and
its product positioning, price, place, product, promotion, and customer satisfaction.
External influence- The external influence that is considered are Culture, subculture, and values,
Demographics, income, and social class, reference groups and family, marketing activities of
Amcor (Fletcher & Crawford, 2013).
Internal influence- The internal influence that is to be considered are the needs of the company,
motives, and emotions. It also includes the learning, perception, and memory of the stakeholders,
their lifestyle, attitude, and personality.
Situation influences- The situation influences are the physical features, perspective of time,
social environment, the definition of the task and the antecedent task and situations.

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Decision process influence- This includes the recognition of the prevailing problems within
Amcor, searching information, carrying out an alternative evaluation, selecting outlets,
purchasing and post-purchasing processes.
4P’s
The 4 P’s of marketing are the organization's price, product, promotion, and place. The 4 P's of
`antimicrobial packaging product that Amcor intends to export in Mexico are as follows:
Product: Product is the first P of the marketing. In this case, it is the antimicrobial packaging
product that Amcor would likely to introduce in Mexico. It includes the chemical resistant
aluminum foil laminates, lamination for alcohol pads, grid coated medical papers and Medical
Form-Stable Tray for Medical Products.
Price: the price of the antimicrobial packaging product is set at a very nominal price so that it can
be easily affordable by the middle-class section of the population (Cavusgil et al. 2014). The
pricing of the product affects some factors such as the profit margin, marketing strategy, and the
supply and demand. It is important for Amcor to place the products and brands differently
depending upon the varying price points.
Promotion: Just introducing the product and selling them in the markets of Mexico will be
difficult for Amcor, as it won't, can gain the targeted customer base. In order to create a proper
market base and increase its revenue collection. It is important for Amcor to use effective
promotional strategies to promote its product and business. Amcor, therefore, uses various
promotional ways such as advertisement, sponsorship, event management, and discount offers to
gain its objectives. However. Public relations, social media marketing, email marketing, search

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engine marketing, video marketing are also some ways Amcor can use to promote its business
further (Majaro, 2013).
Place: Placing the right product at the right place at the right time is very important. It is
therefore important for Amcor to analyze the demand in the market, set the target customers and
accordingly choose the correct place or the market to put its store.
Figure 3: 4P’s of marketing
(Source: Majaro, 2013)
Competitor Analysis
The competition for The Amcor increased in recent times with the entrance of particular
companies like the Sealed Air Australia, Pact Group and Visy Industries which caused an intense

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competition in the packaging sector. It made the consumers confused, and this led to the loss of
customers because of the unclear communication for the products (Majaro, 2013). As the
competitor analysis is an important aspect of every company as the managers miss certain
decisions which are improved with a competitive analysis. The competitive analysis also helps in
makes a relationship between the decision making strategy and the analysis for competitive
purposes. The antimicrobial packaging is highly sustainable and does not hamper the
environment.
Competitor Advantage of your Product
The sustainable products are highly in demand for the cooking experts in Mexico as the
antimicrobial packaging are of low costs and will lead the company to gain more customers with
quality products. Therefore, the result of these steps will provide an increase in the marginal
revenue of the enterprise. Also, the antimicrobial packaging is new for the customers in the
market of Mexico and will gain a definite competitive advantage as the customers will get
attracted towards the newer products in the market with the sellers being a well-known brand
(Kaufmann, Czinkota & Zakrzewski, 2015). The various varieties of these antimicrobial
packaging will ensure the increased sales for the Amcor Company in Mexico. The constant rates
of the Amcor are the reason that it has loyal customers and hence, the antimicrobial packaging
products will be sold effectively.
The Amcor organization utilizes the nature-accommodating fixing to make their items. It
encourages the team to hold a decent picture decidedly. It is certain that the Company makes a
legitimate and eco-accommodating business in Mexico. They grow their topographical locale in
the new area or having a go at extending their business in Mexico. Amcor Limited Company has
an impressive supply chain which enables the organization to accomplish their objective in