Strategic Analysis: CafePod Coffee Co.'s Expansion into South Korea

This report provides an overview of CafePod Coffee Co., a UK-based coffee business, and its potential expansion into the South Korean market. It details the company's background, reasons for pursuing internationalization, and the rationale behind choosing South Korea as a target market, highlighting favorable government policies, a facilitative entrepreneurial environment, and a skilled workforce. The report also addresses potential barriers, such as regulatory hurdles, that CafePod may face. It further suggests implementation approaches for internationalization, emphasizing the importance of understanding the local market and adapting products to meet consumer needs. The analysis concludes that while challenges exist, the opportunities for growth and increased market share in South Korea make it a viable option for CafePod's international expansion strategy. Desklib provides students with access to this assignment and many other solved assignments and study resources.

International business

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Company overview..................................................................................................................................3
Reason for going international................................................................................................................4
New country and the reason behind the decision...................................................................................5
Barriers that will be faced by the organization........................................................................................7
Implementation approaches for the internationalization for the specific target market........................8
CONCLUSION.............................................................................................................................................10

INTRODUCTION
International business refers to the process of an organization establishing its business
operations in the internal market with the objective to expand its market share and increases its
overall business profitability. It involves establishing structured business operations in the
international market and operating in a new region along with understanding the international
environment and the essential source that will be required to keep the operations effective and
profitable in the new international market. Moreover, it consists of the skills that will be required
for the international operations and the products as well as service to be optimal through
elements such as banking, finance and insurance. There are various challenges faced by an
organization when it plans on establishing its business in the international markets and theses
challenges can be related to both the internal as well as external environmental elements of the
business.. These challenges can causes hindrance in the successful establishment of an
organization within the international market. For the following report CafePod Coffee Co. has
been chosen and is a natural independent craft coffee business established in the year 2011. The
company focuses upon delivering quality coffee for adventures coffee drinkers to enjoy at home.
The following report will consist of the overall overview of the chosen organization to better
understand its history of establishment and current business operations along with the reasons
behind the international process and the major challenges encountered by the company in its
international process. In addition to report will focus on the international market of Korea for the
company of CafePod Coffee Co, to expand its market for growth of business. Furthermore, the
report will involve effective explanation of internationalization process and its utilization for
specific target market as well as assistance in analyzing the major challenges for growth in the
local and international market.
MAIN BODY
Company overview
CafePod Coffee Co. was founded by entrepreneur Peter Grainger and Brent Hadfield,
who wanted to bring happiness to people’s every day, lived and help them thrive in the hustle,
the bustle and the daily grind. The journey began when Peter was traveling around south
America after quitting his job during the middle of the financial crisis and stumbled across a
coffee plantation and an independent shop making Nespresso compatible capsules using exciting
and unusual coffees. Peter could see that retail coffee in UK supermarkets lacked the exciting
and energy of high street coffee shops and set about designing a range of exciting and strong
coffee bleeds for coffee enthusiasts to enjoy at home. The products of the company are available
at all major supermarkets and online retailers with a range of a Nespresso compatible aluminum
pods, roast whole beans and ground coffee. The company has over 15 highly skilled employees
and a net worth of 1.4 million and acquired Big Cup Little in the year 2014 in order to expand
their business.

Reason for going international
Through effective analysis of the values and background of the company it is crucial to
keep their employee motivated and focused on trying to expand their business into the
international market. This is initiated when the organization analyses the different strategies and
applied major source and approved with various reasons for expanding the market into the
international market (Sadeghi and Biancone, 2018).
. Following are the major reasons for CafePod Coffee Co. to enter the international market:
Cost saving: The company can gain the advantage of saving cost if it expands into the
international market of Korea as the country will allow the business to gain highly skilled
employees at lower cost along with the distribution and logistics in the region being inexpensive.
This expansion will allow the company to save major cost in their business operations. The
company can uses the saved up financial resources in developing new products in the region
through effective understanding of the customers demand in the particular market (Clark and et.
al., 2017).
Increase market awareness: The expansion will allow to the business of CafePod Coffee Co. to
develop and enhance its overall market share as well as it awareness. The international market of
Korea will allow the company to increase its awareness in the particular region and gain
validation in the international market as well. This allows the company to gain the opportunity to
collaborate with other organizations as well have a opportunity to expand into other international
market as well.
Diversification: The international expansion will enable the company to diversify its products
and services in order to meet the needs and desires of customers in the particular international
market. Moreover, this will allow the company to have effective research and development for
its current portfolio of products. In addition to this, the expansion will allow the company to
bring more variant within its coffee products which can also gain popularity in the UK market
(Rubery and Grimshaw, 2020).
Foreign investment: The expansion can allow the company to gain the opportunity to attract
new foreign investments. This is crucially when entering international market as it provides
support to the financial resources of the organization. This enables the company to gain

reputation in the international market as well as gain vital resource for the company. In addition
to this the foreign investment allows the business to ensure that its international operations are
successful which is essential for both growth and profitability (Gaur and et. al., 2019).
Through the analysis the following reasons are crucial in encouraging the business to
enter the international market. This is due to the various benefits the company will attain in the
international market which will provide the organization growth as well as success in its
profitability. This will allow the business to increase its market share and gain credibility in the
international market.
New country and the reason behind the decision
It is recommend to CafePod Coffee Co. it’s expand its business in the international
market of Korea as the market is untapped by major coffee barns and the county is aligned with
the vision of the company as the community if focused on the hustle life. The products of the
company will be effective in attracting customers in the new international market. Moreover, the
new international market will allow the company to gain a highly skilled workface at relatively
low cost. This will allow the business to save its financial resources which is crucial when
entering a new market. In addition to this the company will be able develop new technology in
the region to produce its products and services allowing them to expand their business in an
effective manner (Mukherjee, Makarius and Stevens, 2018) . Furthermore, the country has effective
logistic and distribution system at low cost ensrung that the operations of the business will be
effective as well as cost saving. This will allow the business to attain growth at a higher level.
There are various approaches which are considered to establish a systematic change and manage
the information relative to the international market. As per the research it is analyzed that the
market of Korea in relative untapped by such products offered by the company which makes it a
crucial opportunity for the business to grab on to in order to expand their international business.
The new international market will allow the business to gain recognition in the
international market and build its overall brand awareness. Furthermore, the country is a stepping
stone for the company as there are great opportunities that the new international market provides
to the business which will enhance its overall growth as well its profitability (Le and Kroll, 2017).
Some of the main reasons for choosing china for gain international are:

Favorable government policies: The Company will have the ability of running its business operations
smoothly due to the favorable policy of South Korea as the county is focused upon inviting new
investments in the region. The organization will be enabled to utilize the various supports provided by the
government of the region enabling the company to not only save cost but ensure that its operations will be
effective as well as efficient. This is important in order for the organization to achieve growth and market
share in an optimal manner (Giacosa, Ferraris and Monge, 2017).
Facilitative entrepreneurial environment: The new international market of South Korea allows the
business to enter a market that is entrepreneurial focused. This will allow the business to experiment with
its products and services without the hindrance of individuals taste and preferences. This will enable the
company to not only expand its market but its portfolio of products as well. This will enable the business
to achieve the objective of growth and potential opportunity to generate high profitability, this will also
provide the business a competitive advantage in the market (Caseiro and Coelho, 2018).
The abundance of skilled and talented sources: The new international market of South Korea possesses
various skilled and talented workforces. This is an opportunity for the organization as it will be able to
run its operations with a skilled workforce at a lower cost. This will enable the organization to increase its
overall profitability resulting in higher growth rate in the international market. This growth will also
allow the business to enhance its overall brand image and reputation in the international market,
potentially attracting other organizations for collaboration.
Different growth opportunities: The Company has a great opportunity if it enters the international market
of South Korea as the county is filled with strong and independent working individual. The products of
the company will be received positive in the new markets as it is aligned with the needs of the community
within the new region. Moreover, the market is experimental which will allow the company to do
research and development of new products for the customers which can also be adopted by them for the
UK market as well (Cramer, 2017).
Stability: The county of South Korea is a suitable international market for the company as it is relatively
sable in its economy, social culture, and technological, legal as well as environmental factors. Although
its political environment has issues due to conflict with North Korea, the business will not be affected by
this factor. That majority of external business environment ensure the company a potential opportunity to
run its business operations in an effective and efficient manner. The stability of the country will also
allow the business to join forces with other organizations when further expanding their business,

The above mentioned points are crucial for the Management and the board members of CafePod
Coffee Co, to consider as the new international market will provide them with various positive aspects
that can enable them to smoothly enter the international market and achieve growth. It will also allow
them to boost their brand images along potential opportunity for growth (Yin, 2019).
Barriers that will be faced by the organization
There are various challenges or barriers a company can encounter while entering a new
international market. These challenges cause hindrance in the expansion process of the organization and
involve aspects of external environment factors. These challenges can reduce the chance of the
organization to successful in running its business operations in the new international market. Some of the
major challenges or barriers that will be faced by the organization of CafePod Coffee Co, when entering
the international market of South Korea are mentioned below:
Regulatory hurdles: The organization will face strict regulation rules of the new international market of
South Korea. This is due to the high demand for high quality products and services in the international
market. This can cause a challenge for the organization as it will have to pass all rule and regulations
along with the set standards of the company before effectively establishing its operations in the new
market. This can be a barrier for the company as it can be costly to have a well-established organization
in the new region which can be difficult and risky for the company when entering the market of South
Korea (Brunet-Thornton and Martinez, eds., 2018).
Changing market demands: The new international market of South Korea is very dynamic as the
customers of the market are ever changing relative to their taste and preferences. This can be a challenge
for the organization as it will have to make regular changes within its product line in order to keep up
with the changing needs of the customers in the South Korean market. This can cause the challenge of
high research and development cost which can have a negative impact on the business operations of the
organization. Moreover, this can also cause the business to have great financial losses if they are not able
to keep up with the market demand due to high level of competition in the international markets of South
Korea.
Logistics: The organization can encounter challenges related to various logistical issues due to the market
of the South Korea being saturated with various organizations and low logistic capabilities of the county.
The county also has the issues of low logistical capabilities due to the conjunction of traffic. This can be a
major challenge for the organization as it deals with goods that need to reach their processing station on
time inn order to ensure the quality of the product is not negatively impacted. In order to have a good

logistic system the organization will have to establish business relations with logistic companies which
can result in high fees causing negative impact on the financial resources of the organization.
Human resource management: The new international market of South Korea has low cost and highly
capable workforce. On the contrary the organization can face challenges relative to high cost of meeting
all requirements of the employees which is necessary to be performed due to strict laws being set by the
government of the country relative to employment. This will force the company to pay extra emphasis on
the safely and healthy of the new employee as well as ensure various benefits for the individuals in
unseen scenarios. This can cause the organization to face necessary but high cost of ensuring all rules as
well as protocol relative to employment is being fulfilled leading to increased financial risk (de Sousa
Jabbour, 2019).
Compulsion of overseas partner: The management of CafePod Coffee Co. will face various challenges
when entering the international market of South Korea. This makes it crucial for the organization to
makes suitable as well as reliable relations with other business in the international market. This is vital for
the company as it will allow the management to gain experiences perspective ot the other organization
enabling them to negate the barriers of the new market. It will ensure the company that all the necessary
rules and regulations as well as set standards of the industry are being met. This can help the organization
to have successful expansion in the international market.
Implementation approaches for the internationalization for the specific target
market.
The internationalization process allows an organization to gain various servicing models that can
provide assistance in overcoming several challenges that a business can encounter when entering a new
international market. There are various reasons for an organization to have internationalization process
within its operations. There are different approaches and methods which are relative to the export and
import of goods, non-equity based, and equity based methods utilized by organizations in
internationalization process. CafePod Coffee Co. wants to establish its new ventures in South Korea,
where some of implementations approaches are mentioned below:
Franchising: It refers to the method of effectively distributing products and services involving a
franchisor who will establish trade mark or trade name within the business system and allows a business
to gain royalty from its establishment enabling it to gain growth in an effective manner (Gulanowski,
Papadopoulos and Plante, 2018).
Advantages Disadvantages

 The approach allows building reliable
relations through franchising stores
and ensuring boost of brand image.
 The approach allows the business to
enchase its overall brand awareness in
the market leading to increased
growth opportunity.
 The approach consist of various
regulations which can be
complicated and can be time
consuming for various organizations.
 The approach required high level of
financial resources which can be a
challenge for an organization as
franchises does not guarantee
success in the market.
Joint venture: This approach allows a business to effectively establish reliable relations with other
organizations in the market. This tool allows an organization to overcome various challenges caused by
the new international market in an efficient manner. It also allows reducing its financial risk which can ep
in being competitive in the international market (Falkner, 2017).
Advantages Disadvantages
 This approach provides an
organization with the ability to
understand the unexplored
international market. It enables an
organization to follow all the
necessary rules and regulation of the
new market.
 The approach allows an organization
to gain vital resources with an
experienced organization within the
new international market.
 There can be difference in the mission
and vision of both the organizations.
This results in poor communication
channels leafing to unsuccessful
business operations
 The approach reduced the flexibly in
the business operations of an
organization which can lead to
stagnant growth as well as opportunity
to gain profitability in the international
market.
Evaluation:
From the above implementation approaches, it is suggested to the management and board
members of CafePod Coffee Co. to establish their business in South Korea with a suitable and appropriate

approach of joint venture. This method will allow the organization to effectively understand the overall
industry in the new international market and gain the ability to follow all rules and regulations of the
county. Moreover, the joint venture will allow the organization to save cost and gain vital knowledge
from the other organization (Arvidsson, Arvidsson and Harrison, 2019). In addition to this it will also
allow the company to boost its overall brand image if it gets into a join venture with a well-established
and recognized organization.
CONCLUSION
From the above report, it is analyzed that the utilization of a structured approach in the
internationalization process is vital for an organization in order to expand its business operations in the
international market. It allows an organization to gain more knowledge about the market and gain high
level of growth. Moreover, the process allows the business on overcome various barriers of the
international market and gain the ability to conduct effective research and development of new products
and services.

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