You work for a company in the soft drink industry that has developed a line of c

Question

You work for a company in the soft drink industry that has developed a line of carbonated fruit-based drinks. You have already established a significant presence in your home market, and now you are planning the global strategy development of the company in the soft drink industry. You need to decide the following:

1. What overall strategy to pursue: a global standardization strategy, a localization strategy, an international strategy, or a transnational strategy?

2. Which markets will you enter first? Why?   

3. What entry strategy to pursue (e.g., franchising, joint venture, wholly owned subsidiary)

4. What information do you need to make these kinds of decisions? On the basis of what you do know, what strategy would you recommend

Explanation / Answer

1. For the retail and beverage industry, the localization strategy works better. This is true because the market demand varies from country to another and the company needs to customize the taste of the drink according to the taste of the locals. The company can make us of the core business values of the business to run the company but the approach to the business should be localized. This will take people closer to the company and help the company gain new customers.

2. I will enter the market based on the demographics and food habits of the people. Carbonated fruit juice will only be liked by the youngsters and working professionals between 25 to 40. So the countries with this kind major population will be the first target. The people should like the concept of carbonated fruit juice and the company should be able to modify the product based on the needs of the market. The other target market would be the one with a tag of growing economies. The company can make use of the growing middle class and play with the pricing to attract customers. SO I would prefer expanding to European countries, Brazil, India, China, Japan, Australia and the middle east.

3. If the company is small then they should go for exporting without taking any risk and see how the market responds to the product and then sell it through the distributors. If the market response is good then the company can build a manufacturing unit and then go for direct sales like the companies Coca-Cola and PepsiCo. Contractual manufacturing is also an option if the existing market players are ready to help.

4. We need to conduct SWOT and PESTLE analysis to see which market is suitable for expansion. I would also need the market research data on the market demand and the demographics of the target audience. The survey data with the customers feedback on the new product developed will also help us finalize the best place to expand the market. If we have unique features that the customers might like then go with the exporting initially and once the business is grown then we can concentrate on the direct sales. We also need to forecast the ROI for the business and we can plan accordingly and choose the best market to enter.

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