The current global coffee market is booming because of the increased consumption of this drink and the introduction of the coffee drinking culture across the world. Different countries such as China seem to be embracing the coffee consumption culture at the fastest rate, hence, contributing to the excellent performance of the global coffee industry. The growth of niche markets in traditional coffee markets and the emergence of new outlets have provided a perfect opportunity for their expansion. The boom in the coffee industry is an indication of good beginning for companies such as Espressamente, which are trying to promote their products to the global market. The current coffee industry continues to be driven by technology where many companies are opting to embrace it in their market-entry plans. Such technological aspect as the internet continues to facilitate the entry of companies into new foreign markets by offering extensive market research and the delivery of accurate data relating to these outlets.
The current level of competition has been vital for boosting the manufacture of quality coffee products around the world. The key rivals in the contemporary market are McCafe, McDonald’s, Tchibo, Coffee Bean, and Starbucks. It is vital for Espressamente to understand its business strategies in order to compete with them in the most efficient manner. The proof of the current coffee market growth is the increase in the level of coffee exports around the world. It directly indicates that the demand for coffee has increased massively and has made it a fundamental part of the global market. Coffee remains a vital asset for most countries such as Brazil because it forms one of the largest sources of income while creating employment opportunities for locals as well. Espressamente has the chance of learning new market entry strategies and utilizing them to its advantage in this competitive coffee industry.
The potential foreign markets for Espressamente include China, Brazil, Germany, the United Kingdom, The U.S., India, and Japan. It is worth appreciating all of these potential markets exhibit differences in terms of their culture, administrative aspects, geography, and economic characteristics. The coffee drinking culture in such markets as Japan, Brazil, the U.S., and Germany sets the ground for effective expansion of the company into these outlets. The coffee drinking culture in these countries makes them attractive in terms of offering a new market for the company. It will be easy for Espressamente to enter such outlets and perform at the required level because the boost of the existing coffee culture is favorable for this process.
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All markets except China have less stringent administrative systems in terms of the new markets entry. China seems to have a complex nature of conducting business, hence, making it less attractive in comparison to other potential markets. The latter such as the U.S., the U.K, Japan, Brazil, Germany, and India tend to have lesser administrative formalities in the international market, hence, making it more attractive for Expressament. The company will find it more facile to fit into these markets because of the easy way in which it can acquire relevant trading licenses and recognition.
Another crucial aspect considered for the determination of the attractiveness of these potential international markets is the geographical aspects. Geographically, it can be noted that all the potential markets are located in different regions around the globe. For instance, Brazil is in South America, the U.S. in North America, the U.K and Germany in Europe, and India, Japan, and China in Asia. The diverse location of each of these markets makes them more attractive in terms of investment for the company. It would be easier for it to take advantage of each of geographical region because of the difference in marketing aspects and consumer response.
Economically, such markets as India, China, and Japan have remained stable in time of financial crises in other countries. The stability of these potential markets attracts the company to enter and conduct its activities because they will not have a need to survive all the time. Moreover, such emerging economy as in Brazil continues to perform stably in terms of economic growth and would be attractive destinations for the company’s global strategy.
Reale is the managing director of Espressament at Illy. The first and most important variable that Reale should consider in the decision-making process is the level of coffee consumption across different country. Decisions relating to the entry into new markets should only be made after a keen analysis of the coffee consumption culture in these markets. Its variable is crucial in indicating the level of sales the company should expect from the new markets. It will help in the elimination of any surprises, as the company gets into the new markets.
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The second significant variable that would help Reale in the decision-making process is the income per capital for the top 10 percent of the population. Its variable for the top 10 percent of the population would be vital in assisting Reale to make the best decision relating to market entry. It gives a projection of the purchasing power of the population in each of these countries, hence enabling the company weigh the economic benefits it is likely to derive from these markets.
The third variable is the ease of doing business rank. Different countries have different administrative systems that determine the complexity of businesses conducting. Reale should consider this aspect because it helps to indicate costs that might be involved in the entry strategy and subsequent restrictions to conducting business.
The last most significant aspect that will help Reale in the decision-making process is the coffee shop concentration in each of these countries. It projects the level of competition the company will expect from the potential market. Reale should consider the level of shop concentration and determine the strategic places for its coffee shops, while getting into the market.
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