Sunshine Wines: Market Entry Analysis for Business Report

This business report assesses the market entry potential for Sunshine Wines, an Australian organic wine and craft beer producer, considering expansion into either Singapore or Sweden. The report meticulously analyzes the socio-economic and political environments of both countries, including population, country risk, business risk, GDP per capita, GDP growth rates, inflation, and macroeconomic indicators. It evaluates the business environment, including ease of doing business and corruption perception, and examines the wine market trends in both nations, particularly the growth of organic wine consumption. A weighted index is calculated based on key factors, leading to the recommendation that Sweden offers a more favorable market for Sunshine Wines due to its larger market potential and positive economic indicators. The report concludes by emphasizing Sweden's suitability for Sunshine Wines' international expansion plans, providing a comprehensive overview of the market dynamics and business opportunities in both countries.

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Table of Contents
1.0 Introduction................................................................................................................................2
2.0 Socio-economic environment....................................................................................................2
3.0 Political environment and risk...................................................................................................6
4.0 Business environment................................................................................................................7
Choice of country............................................................................................................................9
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................11

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1.0 Introduction
In the current business scenario, one of the key business aspects that is being considered
by the contemporary business organizations to increase their market share is initiation of internal
business strategies. Entering in the international business helps the organizations in expanding
their market share as well as the brand identity (Folsom et al., 2012). Complying with this
phenomenon, Sunshine wines from Australia is seeking to enter the market of Singapore or
Sweden. However, before entering the international business, it is important for the organizations
to effectively determine the market and business scenario in the host country.
Sunshine wine is being originated from Queensland, Australia. They are producing
organic wine and craft beer for the niche market. One of the key advantages being enjoyed by
them is the absence of pesticides and other artificial chemicals. This report will discuss about the
market potentiality of Singapore and Sweden based on different aspects. One country will be
chosen out of these two countries based on the criterions of Sunshine wines.

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2.0 Socio-economic environment
Figure: 1
Socio-economic environment for Sweden and Singapore
Source: (Coface, 2017)
The population of Singapore stands at 5.5 million, whereas the population of Sweden is
9.8 million. Thus, the market potential for Sweden will be more compared to Singapore due to
having more population. The country risk for Singapore stands at A3 compared to A1 of
Sweden. Thus, the country risk for Singapore is slightly higher than that of the Sweden. The
business risk for Singapore is A2 and A1 for Sweden. Thus, business organizations operating in
Sweden will find less business risk compared to the organizations operating in Singapore
(Allard, Martinez and Williams, 2012). However, on the other hand, the GDP per capita for
Singapore stands higher than that of Sweden. GDP per capita for Singapore is US $ 52887
compared to the GDP per capita of US $ 50049 for Sweden. Thus, in this case, business

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organizations will find more potentiality in Singapore compared to Sweden due to more
purchasing power of customers in Singapore.
Figure: 2
GDP growth rate for Sweden
Source: Tradingeconomics.com, 2017

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Figure: 3
GDP growth rate for Singapore
Source: Tradingeconomics.com, 2017
The current GDP for Sweden stands at 1.3 percent. From 2016, it is showing positive
trend. However, compared to last few years, it is being maintained in a consistent position. The
GDP rate is growing with the help of net exports and increasing government spending. On the
other hand, the current GDP growth rate stands at 2.2 percent (Checherita-Westphal and Rother,
2012). However, the rate of GDP for Singapore is much fluctuating ranging from 12.3 to -1.9.
Thus, business organizations will face more uncertainty in Singapore than in Sweden.
2014 2015 2016 (e) 2017 (f)
GDP growth (%) 3.6 1.9 2.0 2.2

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Inflation (yearly average) (%) 1.0 -0.5 -0.3 1.1
Budget balance (% GDP) 5.5 2.6 2.4 2.4
Current account balance (% GDP) 17.5 19.8 18.9 16.1
Public debt (% GDP) 98.5 104.7 106.4 105.7
Table: 1
Macroeconomic indicators of Singapore
Source: (Coface, 2017)
2014 2015 2016 (e) 2017(f)
GDP growth (%) 2.6 4.1 3.3 2.6
Inflation (yearly average) (%) 0.2 0.7 1.1 1.5
Budget balance (% GDP) -1.0 0.1 -0.1 -0.2
Current account balance (% GDP) 4.8 5.3 5.0 5.1
Public debt (% GDP) 44.7 43.4 42.6 41.2
Table: 2
Macroeconomic indicators of Sweden
Source: (Coface, 2017)

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As of 2017, the inflation rate for Sweden stands at 1.5 percent compared to 1.1 percent of
Singapore. Thus, the inflation rate for Sweden is slightly higher than that of Singapore. Higher
rate of inflation in Sweden may have few positive implications for the organizations.
3.0 Political environment and risk
The recent political scenario in Sweden is going through some turbulence due to the rise
of far right party. The political power in Sweden is trying to get Sweden out of European Union.
Thus, it will have negative implication of the business scenario. However, it is creating barriers
in decision-making process for the coalition government in power. The current government
priorities of Sweden include enhancing the growth rate of GDP by attracting foreign investments
and increase the rate of exports. The trading relationship between Australia and Sweden is
favorable with having sound exports and imports between the two countries. They have double
taxation agreement and bilateral working holidaymaker arrangement between the two countries.
Figure: 4

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Corruption perception index
Source: (e.V., 2017)
Both Sweden and Singapore is having favorable score in terms of the corruption.
According to the report being given by transparency international, Sweden scored 88 and
Singapore scored 84 in corruption perception index, 2016 (Freckleton, Wright and Craigwell,
2012). Thus, there is not much difference between the score of the two countries. Business
organizations will face nearly same political risk scenario in operating in both the countries.
4.0 Business environment
According to the data being available with the World Bank, Sweden ranks at nine and
Singapore at two in terms of ease of doing business. This, Singapore is one of the leading
country for the business organizations to operated effectively and easily. However, Sweden is
also not far behind with the ranking of nine (Ranking of economies - Doing Business - World
Bank Group, 2017). Thus, it will not have any huge differences between the two countries.

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Figure: 5
Sales trend of wine in Sweden
Source: (Statista.com, 2014)
The above data shows that, the trend of wine consumption in Sweden is showing growth
in the recent years (Gaeta and Corsinovi, 2014). However, the growth rate of organic wine is
showing more positive trend compared to the conventional trend. From 2006, to 2014, the
growth rate of organic wine is 1 percent to 10 percent.

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Figure: 6
Wine market growth rate of Singapore
Source: (Reaching Singapore gourmet travellers through magazines, 2017)
Wine market in Singapore is growing rapidly in the recent time and it is one of the
potential markets in the Asian region. The above figure is showing that as of 2016, the volume of
wine being consumed is 12 million litres. However, the market of organic wine is small and in
the budding stage.
Choice of country
Weighting Sweden
Score/10
Sweden
Weighted score
Singapore
Score/10
Singapore
Weighted score
Ease of doing
business
30% 5 1.5 6 1.8

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Corruption
index
25% 4 1 7 1.75
GDP per capita 20% 6 1.2 4 0.8
Market
potential
25% 8 2 4 1
Total 100% 5.7 5.35
Table: 2
Weighted index
From the above-calculated weighted index, it is being seen that Sweden is having higher
score compared to Singapore. Thus, the choice of country for Sunshine wine should be Sweden
(Brouthers, 2013). Majority of the criterions are similar or having negligible differences between
the two countries. However, in most of the cases, the potentiality of Sweden is more than that of
Singapore. The above table has considered the major four factors to calculate the weighted score.
Thus, the result will help the organization in taking their decision of choice of country
effectively.
Conclusion
It can be concluded that, Sweden is having more market and business potential for
Sunshine wine due to the fact that, it is meeting the majority of the criterions effectively
compared to Singapore. Moreover, it is also been seen that, the population and economy is
bigger for Sweden than Singapore. Thus, the market will be more in Sweden. The rate of growth