MNG92210 Report: Cheers Craft Beer's Global Expansion Strategy

This report analyzes the global expansion prospects of the craft beer company, Cheers, focusing on potential markets in India and Brazil. It begins with an executive summary and table of contents, followed by a PEST analysis of both countries, evaluating political, economic, social, and technological factors to assess risks and opportunities. The report then proposes a market entry mode for India, suggesting a joint venture, and outlines a marketing strategy encompassing product, price, and distribution, along with a human resource strategy. The analysis considers the changing consumer preferences, economic conditions, and technological advancements in each country. The report concludes by summarizing the key findings and recommendations for Cheers' strategic expansion, considering market saturation, affordability, and competitive landscapes. The report also highlights the importance of staffing strategy, recommending a polycentric approach to support business objectives. The report is designed to develop a comprehensive understanding of the steps the company needs to consider while acting in accordance with its growth strategies.

Running head: GLOBAL BUSINESS MANAGEMENT
GLOBAL BUSINESS MANAGEMENT
Name of the student
Name of the university
Author note

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Executive Summary
The purpose of undertaking the research is to identify the growth prospects that are being
encountered by the concerned organization, Cheers, in India or Brazil. In this connection, the
report enlisted the macro- economic factors that might be encountered by the organization in the
respective nations, Brazil and India. The assessment of the macro- economic factors and the
opportunities and threats that are associated with the same allowed in deciding the best nation for
the growth and expansion of the venture. The assessment of the opportunities and threats
specifically aimed at identifying the common modifications in accordance with the changing
preference patterns of the customers. The report also enlisted the market entry mode for the
concerned organization as Joint venture, while making an expansion in the Indian markets. The
assessment of the market entry mode and the marketing strategies focused on understanding the
growth related objectives of the venture. The most important part of the operational planning of
the organization is the staffing strategy that was enumerated by the end of the report. The
staffing policy that might be considered by the organization is polycentric as it would support in
empowering the changes as per the business objectives. Therefore, the purpose of undertaking
the report is to develop a positive understanding of the different steps that might be considered
by the concerned organization while acting in accordance with the growth related strategies.

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Table of Contents
Introduction......................................................................................................................................3
Analysis of risks and opportunities..................................................................................................3
PEST analysis..............................................................................................................................3
The destination country- India.......................................................................................................12
Proposed entry mode for the organization in India.......................................................................13
The marketing strategy that might be adopted by the company....................................................14
Product.......................................................................................................................................14
Price...........................................................................................................................................14
Distribution................................................................................................................................15
Human resource strategy that should be adopted by the company................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

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Introduction
The development of a startup and its expansion in the different markets supports in
improving its sustenance related factors. The business partners, graduates from the Southern
Cross University, took the initiative of developing a venture that would propose craft beers in
accordance with the demand of the customers in Australia. After six years of the venture’s
establishment, CHEERS, drew a maximized margin which enabled the venture in improving the
rate of operations. However, the organizational partners have been looking out for different
alternatives for improving their growth in the foreign markets. In this connection, the business
partners chose India and Brazil as alternatives of which one might be taken as the nation for
market expansion. Therefore, the report would take the initiative of identifying the risks and
opportunities that the organization might encounter while increasing the rate of growth and
expansion in the foreign markets.
Analysis of risks and opportunities
PEST analysis
Factors India Brazil
Political  The political stability index
of India is rising and would
provide adequate support
for the foreign organizations
to make investments in the
economy. Prime Minister
Narendra Modi proclaimed
 Political stability in Brazil is
one of the major factors that
attract the attention of the
foreign organizations. The
increased political stability
in Brazil and lower levels of
Government intervention in

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that the nation is prepared
for different FDIs with the
purpose of improving the
economic situation of the
nation (The Hindu 2019).
The political stability and
predictability of the
legislations in India would
act as an empowerment for
the foreign organizations to
make their market growth
 The minimized intervention
of the government in the
different business level
practices might affect the
capability of the
organizations in increasing
the effectiveness of the
venture while making
expansion in the Indian
economy
 The transparency of the
legislations and the clarity
the different business
practices would improve the
rate of development that are
being planned by the
organizations (Shahzad et
al. 2019). Moreover, it has
been observed from the
Global Competitive report
of World Economic Forum
that Brazil ranked 125th in
implying greater trade
openness to the foreign
investments (Weforum.org
2019). It would allow the
business in making dynamic
growth and expansion in the
Brazilian markets.
 The clarity of legal
imposition play an
important role in Brazil
(Stona, Morais and Triches
2018). Most of the
government impositions, in

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of expression would allow
the organization in making
expansion while adhering to
the legislative frameworks
that are being made by India
the form of regulatory
bindings are predictable and
clear which would enable
the growth of the
organizations.
 However, there is a growing
threat of corruption in
practice which might
challenge the organizational
operations while increasing
the risk context for their
growth in Brazil.
Economic  The GDP rate has slowed in
India with fluctuations in
the market economy.
However, there are chances
of improvement in the
economy due to the growing
investments that are being
made by the foreign
companies. It has been
observed that the nation
held the fifth position in the
 Brazil ranks 71st globally as
per the 2019 report of the
World Economic Forum
(Weforum.org 2019). The
growing GDP of the nation
might be attributed to the
increased foreign
investments that are made
by the international
companies in Brazil. The
GDP in Brazil is expected

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world with a GDP of $2.94
trillion in the year 2019
(Reddy, Ingalhalli and
Sahay 2019). Moreover,
forecasted growth to 5.8% is
made in GDP for the year
2020 in India (Reddy,
Ingalhalli and Sahay
2019).
 The increased rate of
employment of the people
in India has boosted their
buying behavior (Gupta
2018). The maximization of
the employability among the
Indian people would result
to elevated disposable
income. The improved
buying power of the Indian
consumers would might
create a positive prospect
for growth of the
organization in the Indian
to grow to US$2150.00
billion by the end of the
final quarter in 2020 and
US$ 2250.00 billion in 2021
(Haddad 2018). The
expected growth of the GDP
in Brazil holds a greater
prospect for growth of the
organization in the nation.
 The increasing activities of
the government in
empowering employment in
Brazil holds a greater
prospect for the
organization in widening
the scope of their markets.
The increased employability
among the people in Brazil
specifically empowered the
disposable income and the
buying power of the
customers. However, it has
been noted that there is

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markets. significant amount of
unemployment in Brazil
reflecting 11.4% (Cyrino et
al. 2017).
Social  The changing preferences of
the customers has critically
empowered the buying
behavior in the Indian
markets (Jacob 2019). The
growing dependence of the
customers towards the e-
commerce platforms holds a
significant prospect for the
growth of the organization
in the Indian markets
(Madamba 2019). On the
other hand, the increased
buying power of the Indian
customers would allow the
concerned organization in
maximizing the growth
prospects while operating in
the different markets.
 The minimized rate of
internet penetration in
Brazil has challenged the
promotional activities while
reducing the dependency of
the people in the e-
commerce platforms.
However, certain changes in
the buying behavior of the
people in Brazil has been
noticed and their inclination
towards buying luxury has
been recorded. However,
for most of the parts of the
Brazilian population, the
absence of monetary power
among the people might
challenge the purchasing
power of the same.

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 The growing rate of
education among the Indian
population would stimulate
the organization in sourcing
skilled workforce for
supporting the operations of
the same. The increased
scope of sourcing skilled
and experienced workforce
would allow the
organization in stimulating
the business operations.
Moreover, the lower cost of
operations through
introduction of cheap labor
would encourage the growth
and expansion of the
venture in the Indian
markets. However, it has
been noted from the report
of World Economic Forum
that the labor market in
India encounters an absence
 The lower rates of
educational development in
the nation might affect the
capability of the
organization in sourcing
skilled workforce. However,
Brazil has the capability of
providing the organization
with cheap labor which
might support the business
in minimizing the
operational expenses while
increasing the annual
earnings. The nation ranks
105th within the world
economies in maintaining a
stable labor force
(Weforum.org 2019). The
stable labor force which is
cheap in the Brazilian
markets would allow the
concerned organization in
improving the business

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of worker rights’ protections
and labor market policies
while ranking 128th in the
world (Weforum.org 2019).
operations while making
expansion.
Technological  India ranks 50th in terms of
innovation among the global
economies (Weforum.org
2019). The different
innovative measures that are
made by the organizations
in India specifically relied
on the transportation
systems and the electricity
infrastructure in which the
nation ranked 28th and 103rd
among the global economies
(Weforum.org 2019).
 The growth of the ICT has
improved between the years
2015- 2018 in India (Goel
2019). However, it has been
noted that India ranks
comparatively lower (120th)
 The high innovation
capability of Brazil, ranking
40thand the increased size of
the market ranking
10thamong the global
economies in the report of
the World Economic Forum
holds clear prospects of
growth and expansion of the
organization in the Brazilian
markets (Weforum.org
2019).
 It has been noted that the
internet penetration in the
economy has expanded
between the years 2015 and
2019 (Ambrosio et al.
2017). However, the rate of
internet penetration in the

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in implementing the ICT
among the BRICS nation
(Weforum.org 2019).
 The financial sector of India
has grown through different
technological innovations.
The growth of the financial
sector in the nation would
allow the concerned
organization in accruing
different loan related
services.
 The improvements in the
innovation capability in the
nation would allow the
venture in making dynamic
growth in the regions.
economy is significantly
lower. The lower
penetration of the
broadband services are
specifically reliant on the
lower affordability of the
Brazilian population.
Therefore, the minimized
rate of internet penetration,
however improving over the
years, might affect the
capability of the
organization in supporting
their dynamic growth
 The minimized
development of ICT in the
Brazilian markets might
affect the capability of the
organizations in improving
the scope of expansion.
However, the infrastructural
growth and electricity
provisions have encountered

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continuous development in
the Brazilian economy,
allowing the growth of the
organization in the markets
(Weforum.org 2019).
 Opportunities of growth in India and Brazil
The major opportunities for growth in the Indian markets are based on the growing
employability of the citizens and the greater amount of disposable income among the same
addressing the affordability of the customers. The increased affordability of the customers in the
Indian markets would allow the organization in improving their scope of marketing the
propositions in accordance with the needs of the venture. Moreover, the improved rate of
innovation in India would improve the scope of expansion of the venture. On the other hand, the
growth opportunities of the organization in Brazil are specifically based on the open trading
options. The availability of the cheap labor force might be taken as one of the major advantages
to be provided by the Brazilian economy to the growth of the organization.
 Challenges declining growth in India and Brazil
The major challenge that might be encountered by the organization while expanding to
the Indian markets is due to the saturated market condition in the beverage industry. The intense
competition in the beverage industry of India would restrict the capability of the concerned
organization in making a dynamic expansion in the markets. On the other hand, the lack of