MBA611 International Strategy: Market Analysis of Boost Juice Bar

This report provides an international market analysis for Boost Juice Bar, focusing on potential expansion into China and Brazil. The analysis evaluates the suitability of both countries based on factors like trade agreements, currency valuation, and ease of setting up business. It identifies and assesses the risks associated with each market, including political instability and economic conditions. The report recommends China as the more favorable option for Boost Juice Bar, citing advantages such as a free trade agreement, logistical support, and a larger population. The analysis also considers the economic growth rates and overall market opportunities in both countries, concluding that China presents fewer risks and greater potential for success. The report uses various academic sources to support its findings and recommendations.

Running head: INTERNATIONAL STRATEGY
International strategy
Name of the student
Name of the university
Author note

1INTERNATIONAL STRATEGY
Introduction
In the current business scenario, business firms should have global presence in order to
gain competitiveness in terms of larger sales volumes and brand identity. This will also reduce
the risks for the firm from their home markets. Boost juice bar is one of the leading entities in
Australia, known for their juices and smoothies. They are already having their presence in
different countries but more foreign countries should be tapped to manage the global
competencies (Hohenthal, Johanson and Johanson 2015). In this case, China and Brazil are
recommended because both these countries are considered as the leading developing countries in
the recent time. Both these countries possess huge market opportunities, which will be beneficial
for Boost juice bar.
The major reason behind the selection of China as the target market is their size of
population. This is due to the reason that China is the largest country in the world in terms of
population. Thus, Boost juice bar will have favorable market opportunities. In addition, China is
also one of the leading counties in the world in terms of the economic growth. Thus, Boost juice
bar will have positive market conditions in terms of both social and economical factors (Dong, Li
and Tse 2013). On the other hand, the major reason behind the selection of Brazil is their
geographic location. This is due to the reason that Boost juice bar is still not having their
presence in the American regions. Hence, entering in the Brazilian markets will help Boost juice
bar in gaining the foothold in this region. Moreover, Brazil is also considered as a leading
country in the world and is included in BRIC group. In China, Beijing and Shanghai will be
considered for the Boost Juice Bar and in New Zealand, Wellington will be considered. These
cities are the key metropolitan areas of both the countries. Metropolitan or tier I cities will have

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the higher average income of the customers to avail the juice. Thus, the market potentiality for
Boost juice bar in doing business in Brazil will also be positive.
Identification of the risks
In doing business in China, one of the major risks for Boost juice bar will be the political
scenario. This is due to the reason that China is having communists style of government, which
is not so business friendly as the capitalistic government. Hence, Boost juice bar will face the
higher intervention of the government in their business operation in China. In addition, the
demographics of China are not favorable as the older aged population is increasing over the
younger aged people (Sun 2018). Thus, the demand for the products of Boost juice bar might get
reduced with this change in the demographics. On the other hand, the major risks identified in
doing business in Brazil are the political instability. This is due to the reason that Brazil is having
the history of military coup and destabilization of the government (Nytimes.com 2019). Thus,
the return on investment for Boost juice bar will be uncertain. Moreover, in the recent time, the
economic growth rate of Brazil is dwindling and negative growth rate is also evident (Malhotra,
Russow and Singh 2014). Thus, Boost juice bar might not find the favorable economic condition
in doing business in Brazil. This can be concluded that both Brazil and China poses a few threats
for the entering business organizations in the country.
Determination of the suitability of the countries
Factors China Brazil
Status of trade
agreements
China Australia free trade
agreement
No free trade agreements
Value of local 4.76 yuan 2.61 real

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currency to AUD
Existence of
Australian embassy
Australian embassies are there in
number of cities in China
Embassy in Brasilia and
consulates in two cities
Relationship Positive Positive
Ease of setting up
business
Fewer steps to b followed in setting
up the business
Relatively more steps for setting
up the business
Based on the above table, it is identified there are few differences to be faced by Boost
juice bar in doing business in Brazil and China. One of the differences will be in the case of trade
agreements. While Australia is having their free trade agreements with China since 2015, they do
not have any with Brazil (Wilsen 2015). Thus, Boost juice bar will gain the advantage of duties
and tariffs exemptions in doing business in China, which will not be gained by operating in
Brazil (Hochstetler and Kostka 2015). Moreover, it is also identified currency of Australia is
having more valuation in China compared to Brazil, which will also help Boost juice bar in
investing more in the country. In terms of the location of embassy and consulates, China is
having number of Australian consulates across the country with the embassy in the capital city.
Thus, Boost juice bar will have added advantage of sourcing and supporting the home country
human resources in doing business in China over Brazil (Xavier, Bandeira-de-Mello and Marcon
2014). They will also face easier rules and steps in setting up business in China over Brazil due
to the business friendliness of the Chinese government. China is also having pull factor to
Australia over the push factor of Brazil. This is due to the fact that in terms of social factor,
China is having the largest population. Thus, the opportunity will also be more.
Recommendations

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Based on the above analysis, it is recommended that China will be the most potential and
effective country for doing business for Boost juice bar. This is due to the reason that major
advantages will be gained by Boost juice bar in doing business in China than in Brazil. In the
above analysis, it is identified that Boost juice bar will gain the advantages of free trade
agreement in doing business in China. Thus, the cost of setting up of the business for Boost juice
bar will be low in China than in Brazil. (Beamisn and Spiess 2013) Their international trade
process will also be more cost effective due to the absence of tariffs and taxes and duties. It
should also be noted that Boost juice bar is already having their operations in the neighboring
countries of China such as India and South East Asian countries. Thus, the logistical support will
also be gained rather than operating in Brazil in a completely new region (Jiang, Liping and
Sharma 2013). The total population size of Brazil is far less to that of China, which will also be
gained by Boost juice bar in catering to higher number of potential customers. The sales volume
will be more for Boost juice bar in case of Chinese operation. The recent reports also states that
economic growth rate of Brazil is fluctuating and it is favorable for the foreign investors while in
the case of China, this is fairly positive. Hence, the economic risks in operating in the foreign
country for Boost juice bar will be less in China than in Brazil (Long, Yang and Zhang 2015).
This paper concludes that in terms of both opportunities and risks, China seems to be a more
favorable option for Boost juice bar over Brazil.

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Reference
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Business in China, p.152.
Dong, M.C., Li, C.B. and Tse, D.K., 2013. Do business and political ties differ in cultivating
marketing channels for foreign and local firms in China?. Journal of International
Marketing, 21(1), pp.39-56.
Wilson, J.D., 2015. China-Australia trade agreement a compromised victory. The Conversation,
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business relations, and policy outcomes. Global Environmental Politics, 15(3), pp.74-94.
Hohenthal, J., Johanson, J. and Johanson, M., 2015. Network knowledge and business-
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Palgrave Macmillan, London.
Jiang, N., Liping, W. and Sharma, K., 2013. Trends, patters and determinants of foreign direct
investment in China. Global Business Review, 14(2), pp.201-210.
Long, C., Yang, J. and Zhang, J., 2015. Institutional impact of foreign direct investment in
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Malhotra, D.K., Russow, L. and Singh, R., 2014. DETERMINANTS OF FOREIGN DIRECT
INVESTMENT IN BRAZIL, RUSSIA, INDIA, AND CHINA. International Journal of
Business, Accounting, & Finance, 8(1).

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Sun, H., 2018. Foreign investment and economic development in China: 1979-1996. Routledge.
Xavier, W.G., Bandeira-de-Mello, R. and Marcon, R., 2014. Institutional environment and
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Is Expected to Bolster the Moderates and Set Back the Communists. [online] Nytimes.com.
Available at: https://www.nytimes.com/1964/04/05/archives/brazil-coup-affects-whole-
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