CAFEPOD Coffee Co: International Market Selection and Entry

This report provides an overview of CAFEPOD Coffee Co, a UK-based coffee company, and recommends India as a target market for international expansion due to its growing coffee consumption and relatively fewer competitors. It discusses the application of the Uppsala model and network model for market selection, along with various entry strategies such as franchising, joint ventures, licensing, exporting, and outsourcing. The report also identifies potential barriers to internationalization, including language and cultural differences, and currency exchange issues. Finally, it evaluates a relevant implementation approach for the internationalization process, emphasizing the importance of adapting to the Indian market and building strong local partnerships. Desklib offers access to similar solved assignments and resources for students.

INTERNATIONAL
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Overview of CAFEPOD coffee co..............................................................................................3
Recommending the country for internationalisation...................................................................4
Relevant models and strategies used for international market selection and entry strategies.....4
Barriers which are faced by the organisation for expanding internationally...............................7
Relevant implementation approach for the internationalisation process for the specified target 9
market..........................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Internationalisation is nowadays used by many companies for expanding its business world
wide or expanding its branches in various countries for earning more profits (Eduardsen, 2020).
Digital marketing has created globalisation and internationalisation easy due to which many
small organisation is expanding its business for earning more revenue. United Kingdom small
company name CAFEPOD coffee co is a independent business from South west London and
providing different variety of coffee for the customers this company wants to expand its business
in India because of increasing consumption of coffee nowadays. This report will cover brief
overview of the organisation and the rationale for going international and recommending the
country in which it has to expand. Further demonstrating application of relevant academic
theory/model related to the process of international market selection and strategies. Lastly the
barriers that will be faced by the company for expansion and evaluating relevant approach for the
internationalisation process for the specified target market.
MAIN BODY
Overview of CAFEPOD coffee co
CAFEPOD coffee co is and small organisation of United Kingdom which is serving its
coffee to its customers mainly in London and providing different quality and taste of brand
coffee to its customers. This company is established in 2011 and increasing its customers every
year and this company is owned by Peter Grainger and Brent Hadfield. This is a wholesaler
company of grocery and related products and every type of coffee like from Nespresso
compatible to ground coffee, whole beans, for its customers taste and preferences also providing
homer services to its customers to enjoy the coffee. Due to increasing competitions in the market
with same products and taste this company wants to expand its business for opening new
branches in other countries to enjoy the products deliver by this company internationally
(Kahiya, E.T., 2020). This CAFEPOD coffee co wants to internationalisation of its products. The
aim of this company is to maximise it sales for increasing profits and diversifying its business for
reducing the cost and increasing more number of customers with expansion of business and
gaining competitive advantage by improving the reputation.

Recommending the country for internationalisation
The best country in which it can expand its business is INDIA because it has less number
of coffee shops and huge population who has increasing taste towards coffee. By expanding its
business in India which has huge population and the trend of coffee is increasing in this country
(Vahlne, J.E., 2020). India has few number of this types of companies and its has great
advantage for the CAFEPOD coffee co to expand it its business here for producing more
products to generate more profits. Due increasing consumption of coffee In India this has great
advantage for the CAFEPOD coffee to expand its business there for earning huge amounts of
revenue because India has great diversity of peoples and has less competitions as compared to
other companies in United Kingdom. CAFEPOD has advantage of low operational cost and
sustainable progress and ease in doing the business for understanding of English by most of the
Indians for understanding the products. India has more population with world largest democracy
with more number of labour force which can be employed with less income due to high currency
value of United Kingdom. India has longer product lifespan and low currency rate which is
beneficial for the CAFEPOD coffee co to expand its business in this country and this is the best
way for internationalisation. CAFEPOD coffee co is a small successful business and for
expansion this is the best way for making it more global and successful by internationalisation in
India.
Relevant models and strategies used for international market selection and entry strategies
The CAFEPOD coffee co has to use various models and strategies for selecting the best
market which has more advantages and more positive outcomes and which leads to more
generation of profits.
Uppsala model
This is the model of internationalisation used by companies which is developed by
Professor Sune Carlson in 1977. This model used for deciding and selecting the market which is
best suited for the process of internationalisation or expansion of business in new market
(Qureshi, and et.al., 2020). This model states that first the company has to expand its business in
the nearby market and slowly with distant market so that every pros and cons can be studied and
identified easily. CAFEPOD coffee co uses this model for researching the market and gaining
full knowledge of the new market by investigating the market properly. The first things this

company should to is to start expand its business in one or two neighboring countries rather then
to invest in more countries at a time and the firm should invest in the country with following this
steps. It has four concept on which this works which are: Market knowledge: The company CAFEPOD coffee co should start investigate all the
information related to the market its competitors, its customers and rivals or substitutes
products (Kristensen, and et.al.,2018). This knowledge helps the company to gain all the
knowledge and do the investments which provides more profits with less cost. This
model helps the company to learn from the past experiences and improve their
investment activities in the future. Commitment decisions: Then company then decide the decisions like which areas to be
expanded and in which country and what would be the amount to be invested and the
decisions regarding the process of internationalisation like how many employees to be
appointed and in which areas they have to operate (Kisanga, N. and Mohammad, S.,
2019). Current activities: Developing the current activities for doing the business with more
accuracy and like using various marketing techniques for increasing the number of
customers and giving various offers to the customers. All the current activities are being
recorded so that it can be measured in the future (Metsola, and et.al., 2020). Market commitment: The CAFEPOD coffee co need to decide or has to sign the
contract for internationalisation of the other country. The company has to obey all the
duty and taxes to be levy by the Government and the company has to sign the contract or
give commitments to the Government for the and has to sign all the financial documents
related to leasing of land and machines by the company.
Network model
This model is used by CAFEPOD coffee co so that this company can build formal and
informal relations with foreign markets or the markets of other country in which it has to expand
its business (Coudounaris, D.N., 2021). This model is used by many of the companies who are
expanding its business because if the company expand its business in which it has no knowledge
about the market and has no relations with the market or there is no network then it creates
disadvantage for the company to expand its business. The CAFEPOD coffee co has to create
good relations in the market of India so that it can get to know the knowledge about the resources

and customers for more competitive advantages and to earn more revenue. This model used for
cooperation and coordination in the activities expansion of the business due to more network and
good relations (Balcet, G. and Ietto-Gillies, 2020).
Strategies used for international market selection
 Franchising strategy: This strategy is used by the firm for using its trademark and sell
its products and services in the target market. The CAFEPOD coffee co should use this
method by paying Franchiser in India so that Indian businessman can use its products and
services and sell them in the whole market for earning commission this way the company
can earn more revenue with increasing sell or increase or expand its business by paying
some commission on it. It involves less risk because the franchiser know more about the
Indian market and can increase the sell by various techniques used in India (Smallbone,
2022).
 Joint ventures: This method can also be used by the CAFEPOD coffee co so like
involving one or two parties for doing the business like this company can mutually add
the Indian owner of small firms to collaborate and shared profits and risk or other factors
in doing the business in India. For example if the small business of India will sell
products of CAFEPOD coffee with 50% involvement of every risk and profits then the
company will earn more profits with low cost and low risk involve in it (Thornton, and
et.al., 2019). This strategy is used by the small business who cannot afford huge losses
and has small operation.
 Licensing strategy: This strategy is used by many business for internationalisation in
one country to other by giving their patient rights, copy rights or license related to the
products or brand. The CAFEPOD coffee co can give the rights to the Indian small
business manufacturer to sell its products and services on its behalf and give the
percentage of profits that are decided by the agreement by different country company
(Hasim, and et.al., 2018). This strategy involves proper agreement between both the
parties with all written documents of all the profit and loss sharing should be mentioned
in that documents and without licensing approval one cannot sell other companies
products or services.
 Exporting strategy: This is the best way for selling or expanding the products and
services of one country company to another. The CAFEPOD coffee can sell its products

and services in India by exporting them directly like choosing the best organisation for
doing this activities and using appropriate distribution network in India. The distribution
channel selected should be a legal entity which has full knowledge how the channels will
work or exporting can be done between different countries (Mendy, 2019). This way this
company can earn huge profits with selecting the nest market for exporting the goods in
India.
 Outsourcing startegy: Outsourcing strategy is also good by using the third party or
another company for selling the products and services of CAFEPOD coffee in other
countries. This way company can save huge cost and its a cost cutting method and the
hired company is responsible for all the profits and activities related to selling and
producing the products and services.
Barriers which are faced by the organisation for expanding internationally
There are many barriers that comes in between for expanding the business internationally
due to lack of knowledge of different languages, cultural or taste and preferences of different
companies. The CAFEPOD coffee co is expanding its business in India which is a very diverse
country like lots of different cultural peoples, and different languages and consumption of coffee
in this country is expensive then tea so there are many difficulties which are discussed as follow: Language barriers: The most common barriers that comes in between is language barrier
due to different type of languages are used by different areas. The CAFEPOD coffee co
has to face this barrier because in India the languages are used differently in different
areas so it becomes difficult for the Indians to understand the products of this company.
This company for expanding its business need to make its products available to the
customers in way so that they understand the details fully without any difficulties. Cultural barriers: They are barriers which involves different traditions, level of
education, taste and preferences, attitude of the market and the society, age etc. In India
due to diversity of people with huge population and low level of education and old taste
creates difficulty for the CAFEPOD coffee to expand its business properly in this country
due to cultural diversities.
 Exchange currency: The exchange of currency plays a major role in profit or loss
bearing because if CAFEPOD coffee has high currency value in the country in which its

expanding its business then it can earn huge profits and vice versa. India currency vale is
low as compared to United kingdom so the customers will resist to buy the products at
higher prices due to lack of money and becomes difficult for the CAFEPOD coffee to
earn profits. Legal factors: The factors like legal policies, law related to consumers, taxes or duty,
license by the government of different countries. Different country’s have different legal
factors which affects the process of internationalisation. For example high export duties
or inflation rates may increase the cost of expanding business in that country and strict
legal factors also increases the cost of the business which becomes difficult for
internationalisation (Metsola, and et.al., 2020). Lack of knowledge of new market: This is very challenging for the CAFEPOD coffee to
expand its business in completely new market in which it has no knowledge because lack
of knowledge increases the cost and low profit making. Technological factors: Technological factors affect the companies operation because
every country uses different technologies according to the market and need of its
customers. Internationalisation process involves adopting different technologies of other
countries which involves huge cost (Mendy, 2020). Political factors: Political conditions creates barriers in the internationalisation process
like if CAFEPOD coffee co has to expand its business it has to check and measure the
political stability in India so that it can operate its business with full efficiency for
earning huge profits. This company carefully need to check the behaviours of other
country’s political behaviours for its business before expanding internationally (Kriz, A.
and Welch, C., 2018). Social factor: Various social factors like wealth, religion, habits, family size influence
the demand of the products. CAFEPOD coffee need to check all the social factors of
different country so that it can produce its products accordingly. Like for example if the
Company expand its business in another country and the customers did not like the
products of expanded company due to old taste and habits or the wage system of that
country to cannot afford the products due to low incomes creates barriers in
internationalisation (Ranasinghe, G., 2019).

Relevant implementation approach for the internationalisation process for the specified target
market
The CAFEPOD coffee co will use various approaches for implementing its business in the
specified target market of India in which this company have more advantages and can earn more
amount of profits.
The lifecycle of the product
This method is relevant for expanding the business because it involves five stages in
which each stages are done with full research like:
Development of the product in which the products are developed according to the full
market research by the CAFEPOD coffee in India so that the product will be developed that has
more demand in the expanded market. This method involves concept testing and involves cost
related to researching market and launching few products etc with no income generation. This
step requires company to apply different strategies for launching the products for future success
or profits in the expanded market.
Second step is Market information after the product launched the marketing team of
CAFEPOD coffee will do the research in the target market for checking all the factors like
competition in the market, how innovative is the product and how the customers are reacting
towards the products etc for changing the strategy if required. The complete market information
is necessary for the operating in the other countries full efficiency and with full efforts.
Third step involve Checking Market growth this step shows how the consumers are using
CAFEPOD coffee products and increasing the demand of the products or increasing the
advertisements of the products so that customers are more attracted towards the products. The
CAFEPOD coffee for more growth after the market research will add more features and add
variety of products for more growth in the target market. Increasing the sales with various
strategies in the target market and expanding the business in the nearby areas for more growth.
Forth step is Maturity When the CAFEPOD coffee co reached the stage where the sales
of the company expands and the customers are increasing on good growth then it has to reduce
its price to remain competitive in the market. This company need to maintain its demand and
supply with changing demands and prices of the products because customers will not buy the
products with increased prices or high prices and switch to other subsidiary products or vice
versa (Gankema and et.al., 2019). This is the stage of more competitors, in the market so the

CAFEPOD coffee need to maintain its sales by time to time innovation of the products, reducing
the cost of production with producing in bulk and maintain its price to remain competitive in the
market.
Last step is Market decline this is the stage where the company has to face huge
competitions like more competition in the market due to similar products and services. The
product will become outdated or replaced in which the company use old techniques and methods
of producing the products and new companies will produce same products with unique and
advance features to attract the customers. Due to outdated products and more competitions the
company will loose its customers slowly and it decreases the value of brand image of the
products. This is the stage where CAFEPOD coffee need to be very careful due to declining of
its products market and huge losses.
CONCLUSION
From the above report it has been concluded that internationalisation is important for the
growth of small companies who need to expand and want more other branches in other countries.
The company CAFEPOD coffee is small business and expanding in India and this company is
using various models and strategies like Uppsala and network model for proper knowledge of the
target market their policies etc and this company is using various strategies for entering into new
market of different country for increasing the profits and reducing the cost of the company by
expansion. Furthermore, it is concluded that franchising, joint ventures are various strategies that
gives right to other companies or different companies to use the products of expanded company
for commission or on profit sharing motive. This company also facing many barriers in
internationalisation process like cultural, social, political etc that are creating problems in
properly working of the business in other countries. Lastly, it is concluded that companies are
using relevant approaches for the process of internationalisation in target market like life cycle
Product approach in which all the pros and cons of the target market are researched by the
professional team for reducing the damages and increasing the efficiency.

REFERENCES
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internationalization to evolution. Global Strategy Journal, 10(2), pp.239-250.
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