Global Business: CHEERS' India Market Entry Analysis and Justification

This report examines CHEERS' global business expansion, specifically focusing on its potential entry into the Indian market. The analysis begins with an executive summary highlighting the company's success in Australia and its decision to expand into India, after considering both India and Brazil. The report then delves into a detailed analysis of the risks and opportunities present in both countries, evaluating political, economic, socio-cultural, technological, environmental, and legal factors. This comparative analysis leads to the selection of India as the target market, with a justification based on India's diverse culture, limited competition for craft beer, and favorable environmental factors. Finally, the report discusses and justifies the proposed market entry strategy, specifically partnering, explaining why other strategies like direct exporting, franchising, and licensing were deemed less suitable. The report concludes by summarizing the key findings and recommendations for CHEERS' successful entry into the Indian market.

Running head: GLOBAL BUSINESS
Global Business
Name of the Student
Name of the University
Author’s Note

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Executive Summary
Business expansion in the International market is having major significance for enhancing the
entire process of business along with increasing the target customers. As per the case scenario, it
has been observed that “CHEERS” has already occupied a predominant place in the market of
Australia within five years. Five business executives with their best effort, investment and
strategic policies have established the entire process of business all over the market of Australia.
For expanding the business process the organization has selected two different countries such as
India and Australia. After evaluating a critical analysis regarding the threats and opportunities of
these two countries the business experts have selected India as their location of new market
entry.

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Table of Contents
1. Introduction:................................................................................................................................3
2. Analysis of risks and opportunities..............................................................................................4
3. The selected destination country:................................................................................................8
4. Discuss and justify the proposed entry for the chosen country:..................................................8
5. Conclusion:................................................................................................................................10
Reference List:...............................................................................................................................12

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1. Introduction:
Business expansion in different geographical boundaries is one of the most major parts of
gaining international image and reputation. As per the case scenario, it has been observed that
“CHEERS” has already rendered a business success within five years in the market of Australia.
Five business graduates with their best endeavor, investment and strategic plan have established
the entire process of business all over the market of Australia. Craft beer is the core product of
CHEERS with the help of which the business experts have maintained their monopoly business
process all over the market of Australia. After bringing the huge success of business CHEERS
business executives have decided to expand their business process beyond going the regional
geographical markets. India and Brazil have been chosen as the two specific countries where the
entire business wings of CHEERS would be expanded. After making a critical comparative
analysis on the overall risks and opportunity factors, this specific study has selected one
particular country for launching the business process of Craft beer.
2. Analysis of risks and opportunities
In order to analyze the risk and opportunity factors this specific study has focused to
evaluate environmental analysis of India and Brazil. While evaluating some of the major risk
factors as well opportunities for expanding the business process of CHEERS this specific study
has focused to make an in-depth analysis on the political, economical, socio-cultural,
technological, environmental and legal factors of both two countries.
Political:

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India being one of the largest democracies in the World runs a federal government. The
entire political set up is very much influenced on the interest rate of politicians. As per the
business environment India’s political set-up is established for maintaining an overall business
process (Cavusgil et al. 2014). The taxation system of India is very much developed with the
help of which both the business organization as well as government tends to maintain a
transparent relation. On the other hand, India is not free from political chaos. Therefore,
business organizations have to face major risk in establishing their entire process of business in
the market of India. At the same time, it is undeniable that local bodies belonging to India is co-
operative enough in spreading their hands with the business organizations (Dunning 2012).
Therefore, business experts are having the opportunity in establishing their business process.
On the other hand, as per the current political environment of Brazil this particular
country is currently stable in terms of political chaos. At the same time, Killing (2012) opined
that the business stability of this specific country is very much volatile. The environment
depends on election to election.
Economical:
India is not very much developed in economically. Most of the people belonging to this
specific country belong to the category of low cost customers. Folsom et al. (2012) stated that
while expanding their entire process of business the business experts should decide the fact that
price range of the product should not be restricted for premium cost of customers. On the other
hand, stable currency rate is one of the most effective features of the overall economic status of
Brazil. However, Brazil being economically developed country is constituted with premium cost
of customers.

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Socio-cultural:
India is constituted with the people of diverse cultures and attitudes. People belonging to
different cultural as well as religious attitudes belong to this specific country. Therefore, after
entering into the market of India the business organization like CHEERS would get the
opportunity to introduce their products to the people of various geographical markets. On the
other hand, it has been evaluated that Brazil is not that much constituted with the people of
diverse cultures and attitudes. In this kind of situation, the business experts do not get the scope
of expanding their products in different geographical boundaries. If the business experts fail to
launch their products in different cultures and psychological backgrounds the entire wings of
business would be very much restricted within a specific zone. In this kind of situation, the
business experts would have to face difficulties in gaining organizational image and reputation to
the people of different international customers (Cavusgil et al. 2014).
Technological:
India being a developing country in not very much developed with the process of
technological advancement. The customers of India may have to face difficulties in operating the
entire process of technology (Burgenmeier and Mucchielli 2013). As a result, those customers
have to face challenges in receiving online service process. Therefore, if the organization like
CHEERS has to expand their business process in the market of India the business experts would
have to focus in maintaining traditional business process (Dunning 2013). On the other hand,
Brazil is technologically developed country. The inhabitants of Brazil are very much advanced in
technology. Therefore, in order to expand the entire process of business the in the market of
Brazil the business organization such as CHEERS would have to be the availability of

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technological equipments. In this kind of situation, the business executives may have to face
challenges in operating the entire process of business by implementing the advancement of
technology (Jenkins 2013).
Environmental:
Due to the extreme level of deforestation the environment of Brazil is extreme. The rate
of water pollution and water degradation is high in range. In this kind of situation, business
organizations have to face difficulties in surviving their entire process of wings in the soil of
Brazil. On the other hand, CHEERS in order to expand their craft beer business in the market of
Brazil needs a steady environment based on which they can run their entire process of business
effectively (Penrose 2013). However, the overall environmental balance of India is suitable for
running the business like CHEERS. In the season of winter the business experts can maintain
their promotional activities and campaign for introducing the product in different geographical
areas. Winter in India is comfortable; thus marketing executives can easily conduct their field
work in the market of India in winter. Therefore, the business executives do not have to face
difficulties in expanding their entire business process throughout the entire country (Ferreira et
al. 2014). On the other hand, the soil of Brazil may be risk factors for CHEERS in order to
circulate their business process on the overall market of Brazil.
Legal:
The process of double taxation agreement is one of the most effective barriers for
expanding the entire business process in the market of Brazil. In addition, a new business
organization like CHEERS may have to face difficulties in maintaining the taxation regulations
and acts of Brazil. On the other hand, Poulis, Poulis and Plakoyiannaki (2013) stated that India’s

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taxation policy is very much flexible in running the entire business for a new organization. In
addition, it is also undeniable that India’s labor union is not very much strong in making a barrier
in business strategies and policies. In this kind of situation, the business experts do not have to
face innumerable difficulties in implementing their organizational strategies and policies. In
addition, as per Indian culture every business organization has to follow some of the major acts
and regulations in order to maintain a balance (Papadopoulos and Heslop 2014). The regulations
include health and safety act, data protection act, right to information act and so many. CHEERS
after implementing these legal factors within the business organization would not have to face
major barriers in maintaining a good rapport with the employees.
3. The selected destination country:
After evaluating the six major factors for business expansion of two different countries
CHEERS would like to focus on expanding their entire process of business in the market of
India. People of India are from different geographical boundaries and attitudes and having
various psychological backgrounds. In this kind of situation, the business experts of CHEERS
would get the scope to enhance their product variety for drawing the attention of Indian
consumers (Cotton, Falvey and Kent 2012). On the other hand, the concept of craft beer in the
market of India is very much new. Therefore, the business experts would get the scope of
conducting a monopoly business process. The number of competitors in the market of India
would be very much limited. The risk factors for the business experts are not very significant due
to limited competitive market. On the other hand, after the market entry of CHEERS, the
customers belonging to India would get a scope of purchasing different kinds of products.
Therefore, new entry of CHEERS in the market of India is beneficial for both the customers as
well as the business employers.

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Market entry strategies:
In order to enter into the market of a specific country business organizations have to
follow some of the major strategies and policies that include Direct exporting, Licensing,
Franchising, Partnering, Joint ventures, Buying a company, Piggybacking , Turnkey projects
Greenfield investments. Among those markets entry strategies the business experts of CHEERS
have chosen Partnering as the appropriate new market entry strategy.
In this specific part the study has focused to evaluate what specific market entry strategy
has been chosen and why the business experts of CHEERS refuse to follow other form of market
entry strategy for expanding their business in India.
The business experts of CHEERS before entering into the market of India could have
followed Direct Exporting strategy for launching the new process of business. Lack of
technological advancement, political chaos is the major factors with the help of which business
experts have to face difficulties in maintaining their entire process of business with the help of
direct export (Cotton, Falvey and Kent 2012). Thus, direct export strategy has not been selected.
Franchising enables the business experts for obtaining the distribution with the help of
affiliated dealer. Franchising is the systematic market entry process in which a franchisor
provides a licensed privilege to the franchisee for doing business. Franchisor offers assistance for
organizing, training, merchandising, as well as managing in return for a monetary consideration.
Franchising for new market entry process is a long term process. The business experts of
CHEERS could have waited for long time in order to launch their new business.
Licensing is a part of business agreement strategy with the help of which one particular
business organizations gives a permission to other another company for manufacturing their

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products for the purpose of business expansion. Before entering into the new market business
experts sometimes fail to arrange a new set up for expanding their entire process of business.
Due to the lack of communication the business experts of CHEERS failed to convince other
organization for making licensing. This particular strategy has not been selected thus.
Joint venture enables two or more than two parties to pool their resources in quest of
expanding their business. A particular business organization in order to launch a new business in
a different country can make a joint venture with an established one. As a result, the startup
company would be able to pool up the resources. Joint venture can be effective between the two
similar kinds of business organizations with similar business trend. Therefore, CHEERS has not
selected this one.
If the revenue growth of a particular business organization is high the business experts
can enter into the market by buying an existing local company. The economic strength of
CHEERS is not that much high for buying a new company. These business experts have not
selected this strategy.
Piggybacking is one of the most effective ways of entering in the international market. If
a particular business organization deals with unique products and services and occupied a
predominant place in the local market the business experts can launch the product in foreign
market as well for the purpose of business expansion. At the same time, before entering in the
foreign market CHEERS could have promoted their products more effectively for introducing
the brand in the new market. Due to limited economic strength CHEERS fails to invest large
amount of money for maintaining business promotion. Thus, this strategy has not been selected.

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Turnkey project is the market entry strategy with the help of which the business experts
provide services to environmental consulting, architecture, construction and engineering. This
particular business strategy is very effective for dealing with government clients. CHEERS is not
restricted within government clients only. Thus, this specific strategy has not been selected.
Greenfield investment is the business strategy with the help of which business experts
tend to start the entire business process by purchasing a land and building all facilities within the
business setup. This specific business strategy is having major risk factors. CHEERS would have
to invest large amount of money for money for making the entire setup. Thus, this particular
strategy has not been selected.
Chosen market entry strategy:
This particular brand like CHEERS has decided to follow PARTNERING as the most
effective market entry strategy. As this particular brand has already gained enough reputation in
the market of Australia the business experts can make an effective rapport with reputed beverage
companies with the help of which they can get an effective support both financially as well as
technologically. On the other hand, CHEERS can use the workforce strength of its partner in
order to maintain business sustainability. Purchasing a land and building the entire set up in the
market of India is a matter of large investment. Therefore, the business executives can focus on
partnering with one recognized beverage brand of India so that the resources can be pooled out
while maintaining customer services. The business experts of CHEERS can make a partnership
with a recognized brand prevailing in India for launching their business in Indian market. As a
result, the organization would be able to get the workforce strength in order to fulfill the needs

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and demands of customers (Zander, McDougall-Covin and Rose 2015). In addition, CHEERS
can get an economic strength from the organization as well.
4. Discuss and justify the proposed entry for the chosen country:
India has been chosen as the selected country for expanding the entire business wings of
CHEERS. Behind choosing the market of India various opinions have been highlighted by
involving the point of views of numerous eminent scholars. As per the point of view of some of
the most conspicuous personality India is possessed with diverse culture. Therefore, CHEERS
would get the scope of introducing their products as well as services to the people of various
geographical boundaries and attitudes (Clarke, Tamaschke and Liesch 2013). In addition, it is
undeniable the needs and demands of thee Indian employees in terms of their remuneration as
well as facilities and benefits is not very high. As a new business organization CHEERS may
have to face innumerable difficulties in paying high salary to the employees. In this kind of
situation, launching the business process in the market of India is very much safe for the
organization like CHEERS. The business experts of CHEERS can hire people in affordable
remuneration package. As a result, the organization does not have to face difficulties in running
their entire process of business in the market of India.
Ueda (2012) stated that the strength of labor union is comparatively low than the strength
of Brazil. It is undeniable that the influence of labor union is having major impact on the overall
growth of business process. Business organizations have to face innumerable difficulties in
implementing proper business strategy if labor union creates a major barrier. In order to run the
entire process of business in the market of India this specific organization does not have to face
challenges on behalf of the labors. Business experts of CHEERS would not have to face

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difficulties in implementing any business strategy and policy due to the flexible structure of labor
Union.
5. Conclusion:
This particular study has provided to make an in-depth analysis about the importance of
business expansion in the international market. At the same time, in order to spread their
business wings in different geographical boundaries business organizations have to evaluate
various risk factors. The business experts have to analyze the necessary opportunities for
expanding the entire business in the market of India. This specific study has given a deep insight
on how CHEERS should extend their entire business wings in different geographical market.

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