MGT 3650 SICA Case Study: Global Market Entry and Strategic Analysis

This case study analyzes Solubles Instantaneos C.A. (SICA), an Ecuadorian coffee company, and its potential for global expansion. The analysis addresses SICA's strategic options, including market entry into Vietnam and Peru, assessing the suitability of each market based on factors like raw material availability, market demand, and trade agreements. The study also evaluates the global potential of the Don Café brand, considering its current market position and the competitive landscape. Furthermore, it provides recommendations for structural and strategic changes to ensure SICA's success in the international market, covering aspects like product strategy, partnership, and financial management. The case study emphasizes the importance of adapting strategies to local market conditions and maintaining a competitive advantage in the coffee industry.

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MARKETING 2
QUESTION 1
If SICA was to expand globally, it would consider expanding its business in Vietnam.
The country is well known for the production of coffee. The coffee trees planted in Vietnam are
primarily Robusta and Arabica which are used by SICA.SICA would be privileged to expand to
that country to take advantage of the cheap raw materials. The south of Vietnam is humid and
highly suitable for growing Robusta whereas the northern part of the country is suitable for
planting Robusta. SICA would engage the government and erect a plant in the country. Vietnam
has large plantations meaning the volume of Robusta and Arabica are produced in large volumes
too (Jácome & Garrido, 2017).
Vietnam could be a better place of expanding the business since in the recent past; the
country has been noted to have a robust manufacture volume of the coffee bean through bumpy
and deep dispensation. The intended rough dispensation produces a aptitude of 1.5 million tons a
year and this would serve SICA well. The country has a vast population that consumes coffee.
Research shows that coffee is a favorite drink for the Vietnamese. The planting areas also expand
continuously in Vietnam. The level of output has grown accordingly and this leads to the
promotion of processing of coffee, sales, and export for the coffee beans.
If SICA enters the market, it will take advantage of the increasing capacity of raw
products produced in the country. Coffee in Vietnam has coffee processing devices and equipped
labor that makes Vietnam a bold domestic producer in both domestic and foreign markets. The
entry of SICA into the market will make the firm take advantage of the improved technology in
coffee production and hence increase its profit margins. Setting a production firm in Vietnam
will also ensure that SIC does not incur extra costs in transporting the raw materials to Ecuador
(Salaza, Ramos-Martín, & Lomas, 2018).

MARKETING 3
The firm has foreseeable profitability if it enters the Vietnamese market. The latter is done
basing the comparison with the correlation with the existing coffee industries in Vietnam. Due to
the trade agreements Vietnam made, there will be no strict barriers to entry and strength of
customer relations and the levels of industry competition. Through expanding its market to
Vietnam, SICA will also take advantage of the domestic market and increase its sales.
SICA can maintain and enhance the competitive advantage in the coffee market,
expansion of the sales network, attracting and efficiently utilizing the factors of production to
obtain enhanced economic growth gains and ensure a sustainable supply of coffee. The firm
associates with the advantages of the products and the firm’s production efficiency (Carvalho,
Carvalho, & Souza, 2019). There are favorable institutional policies enacted by the government
of Vietnam and also good infrastructure and inner elements inside itself such as the increased
level of technology and the availability of cheap labor among others.
QUESTION 2
In Peru, the commercial environs require American firms to have a nicely premeditated
market entry strategy.
Make your scheme frugally fruitful
The productivity of your development or the sale of your products in Peru is supposed to
be based on a sound monetary basis. It is advisable not to rely on government incentives, special
contemplations or non-market resource incomes from Peru. It is good to ensure that your plan
accomplishes viability in the short term and that it can be sustainable in the longer term. The
market should do thorough research on competing firms (Del Brutto, Mera, & Zambrano, 2014)

MARKETING 4
Carry Out Risk Analysis
A firm needs to be realistic about the risks that it is willing and capable of accepting in its
venture. The business should make sure that it uses reliable sources for the assessment.it should
utilize media sources or its instantaneous associates to evaluate the market. The business should
not have a corporate risk analysis policy for Peru which is different than the one that it would
have in the case of other countries (Jacques, Denancé, Legendre, Morel, Briand, & Mississipi,
2016).
Familiarize With Partner
A firm should carry out due diligence well.it should ensure that its probable archetypal
has the power to make a sound decision. It should also institute rules before it begins its
negotiations. It is also important to ensure that your partner is capable of and enthusiastic to do
what they promise to do in the contract.in a case where the scheme is not a win-win proposition,
it would be difficult to enforce your agreement regardless of the legal rights.in case the business
needs to go to court to enforce the contract, it will be already late. Is it to their greatest advantage
to help you to ensure your image and additionally other licensed innovation rights? Be cautious
that your accomplice is permitted by law to satisfy the guarantees in the agreement. Check the
unwavering quality of the information on your accomplice or client from free sources (Avelino,
Cristancho, & Georgiou, 2015). Abstain from being "stovepiped" - talking just to those
individuals to whom your accomplice or purchaser guides you. You can lose a great deal of cash
on the off chance that you are spoken to with an inappropriate accomplice.

MARKETING 5
Have Clear Agreement Terms
Peru's 6.5 % financial development reflects prompts consistent changes in the household
economy. When going into an agreement with a Peruvian accomplice you should be mindful to
get ready for every single sensible possibility. Try not to endeavor to go into an understanding
without sound lawful guidance. Have your legitimate direction. In your agreements, indicate
accurate terms of installment, and execution measures (Viteri Salazar & Ramos Martín, 2017).
Set courses of events. Give cautious consideration to subtleties, for example, initialing pages of
agreements appropriately verified marks. Try not to expect that administration authorities have
the position to give you allows and authorizations. Confirm their cases of power from free
sources.
Know the standards
Be careful with offers to twist them in support of you. Beset up to comply with every
single Peruvian law and guidelines. Ensure your supervisors (or specialists and wholesalers)
know all applicable American laws, (for example, the U.S. outside Corrupt Practices Act-FCPA)
are material to them. Peru is getting serious about defilement. Try not to hazard your business
being related to degenerate authorities or unlawful practices (Salazar, Ramos-Martin, & Lomas,
2016).
Rational Assets Rights
In Peru, if an item can productively be duplicated; it will be. Additionally, remote IPR
holders endure gigantic misfortunes to global privateers in Peru advertise and, progressively, in
third nation markets. For licenses and trademarks, you should record your enrollments with the

MARKETING 6
INDECOPI to get insurance. At the very least, it is fitting to enlist copyrights in Peru, even
though you may hypothetically get security under the Berne Agreement. Affirm this with your
lawful direction, as the patent behavior across enterprises isn't indistinguishable (Vellema,
Casanova, & Gonzalez, 2015).
Brain the Store
Tasks and deals in Peru require consistent consideration and away from of
correspondence. It is an error to expect they will run themselves. There is frequently a hole
between views of the people dealing with your item or undertaking and home office in the
United States. U.S. based directors must visit regularly to assess the circumstance on the ground.
Creating and sustaining individual connections is significant. Beset up to give great preparation
and specialized help to guarantee item and the executive’s quality. Watch out for the
organization's record books, or if authorizing, on the licensee's record books. Joining the
AmCham and other significant organizations affiliations are enthusiastically suggested
(Marescotti & Belletti, 2016).
Set up a Corporate Social Responsibility Strategy
This is certainly not another idea for Peruvian organizations, as the coffee organizations
have been dynamic in their particular networks for a considerable length of time. Be that as it
may, having a clear CSR plan is getting progressively significant as a key market section
procedure for Peru. It is additionally prescribed that you discover accomplices in the nation who
share this vision. This will greatly affect your open picture in Peru and fundamentally increment
your odds for progress (Vellema, Casanova, & Gonzalez, 2015).

MARKETING 7
QUESTION 3
Don café can easily be a global brand. This is because it has far-reaching and increased
expenditure brands. The product uses a spray dry technology and its branded product could fetch
a huge profit margin. The brand uses cheaper raw materials to produce instant coffee with the
cost savings being transferred to the consumers in the form of reduced prices.
The brand can easily become a global one since it produces average quality products and
this translated to higher prices than that of the competitors. The brand has decaffeinated instant
coffee which has fewer competitors in Ecuador and this would provide an opportunity for the
brand to be widely known in the market (Del Brutto, Mera, & Zambrano, 2014). The brand has
the capability of becoming a global one since I found it in many big supermarkets in Ecuador.
The local mini markets and convenience stores have a taste for the smaller sachet. The brand is
also found in local mini cafes and hence accommodates both the middle-income earners and
high-class income earners.
The brand also does brand promotion in various countries.in Peru, the brand
advertisement is done by the wholesale as expected and it is done under the agreement between
the wholesaler and SICA. The brand is also promoted in smartphone and this would yield a large
number of consumers.
Ecuador has many trading partners around the globe and this would open markets for
Don café. The country is a member of CAN and also has a partnership with the EU. The country
has agreements with multilateral with various trading blocs. The trading agreements could enable
don café from SICA to go global with ease (Jacques, Denancé, Legendre, Morel, Briand, &
Mississipi, 2016).

MARKETING 8
QUESTION 4
Keeping a Light Footprint
The firm is supposed to hold off on the infrastructure investments or hard costs until their
foreign operation matures. This assists in making sure that the firm has a long term return on
investment. The firm shouldn't be too distant since human capital is priceless (Salazar, Ramos-
Martin, & Lomas, 2016).
Employ a Clear Product Strategy
The firm should develop a leading-edge product that encourages it to expand into new
ventures. The firm should test its products in the target regions to make sure that there is success
and check if there are any adjustments required. The firm should also use the oversea associates
to monitor any upcoming developments and identify any opportunities for the SICA products
(Carvalho, Carvalho, & Souza, 2019).
Reinvest
The firm needs to choose an international market and introduce products where there is
low competition. This will assist in collecting extra revenue to reinvest in a product and to
ginning a bigger market share (Avelino, Cristancho, & Georgiou, 2015).
Look For Partners
Before the firm goals global, it needs to make sure that it protects itself by partnering
with best class global firms whose basic focus is to recognize the warning signs and
understanding the potential risks. The firm will also need to establish an entity while entering
new market so that it sets long term goals in the new markets (Jacques, Denancé, Legendre,
Morel, Briand, & Mississipi, 2016).

MARKETING 9
Conclusion
SICA has been one of the successful forms in Ecuador in selling its coffee products. The
firm has gone global in several countries.it uses several strategies in entering the new markets.
With the change in head, the firm needs to change its strategies so make sure that it does not run
under losses. The firm also faces stiff competition from its rivals and hence it needs to follow the
above-mentioned strategies to ensure that the firm’s brands remain in the market.

MARKETING 10
References
Avelino, J., Cristancho, M., & Georgiou, S. (2015). The coffee rust crises in Colombia and
Central America (2008–2013): impacts, plausible causes and proposed solutions. Food
Security, 7(2), 303-321.
Carvalho, C. F., Carvalho, S. M., & Souza, B. (2019). Coffee: In Natural Enemies of Insect Pests
in Neotropical. Agroecosystems, 56(3), 277-291.
Del Brutto, O. H., Mera, R. M., & Zambrano, M. (2014). Cardiovascular health and caffeine
consumption. A population-based study in rural Ecuador. International journal of
cardiology, 172(1), 284-285.
Jácome, A. R., & Garrido, A. (2017). A Real Option Analysis applied to the production of
Arabica and Robusta Coffee in Ecuador. Spanish Journal of Agricultural Research,
15(1), 0104.
Jacques, M. A., Denancé, N., Legendre, B., Morel, E., Briand, M., & Mississipi, S. (2016). New
coffee plant-infecting Xylella fastidiosa variants derived via homologous recombination.
Appl. Environ. Microbiol, 82(5), 1556-1568.
Marescotti, A., & Belletti, G. (2016). Differentiation strategies in coffee global value chains
through reference to territorial origin in Latin American countries. Culture & History
Digital Journal, 5(1), 007.
Salaza, O. V., Ramos-Martín, J., & Lomas, P. L. (2018). Livelihood sustainability assessment of
coffee and cocoa producers in the Amazon region of Ecuador using household types.

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Journal of Rural Studies, 62(12), 1-9.
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livelihood strategies of smallholders: coffee and cocoa producers in the Northern
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Vellema, W., Casanova, A. B., & Gonzalez, C. (2015). coffee certification in Ecuador. Food
Policy, 13-25, 57.
Vellema, W., Casanova, A. B., & Gonzalez, C. (2015). The effect of specialty coffee
certification on household livelihood strategies and specialisation. Food Policy, 57(12),
13-25.
Viteri Salazar, S., & Ramos Martín, J. (2017). Organizational structure and commercialization
of coffee and cocoa in the northern amazon region of Ecuador (Vol. 2). Oxford: Oxford
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