Upon entering the international business market there are many considerations that need to be undertaken including, economics, culture, marketing, licensing and strategies. This report will provide XXXXX brewery with the information and recommendations for each element of business that needs to be considered before entering the international market.
2.0 Economic Environment
There are a number of economic issues that XXXXX brewery need to take into consideration. The first issue to consider is the overall stability of the local economy in relation to the rest of the world. Ideally, you should be aiming for markets that have strong growth potential and are economically stable. This can usually be reflected in the countries GDP per capita, which is the mean income of the nation. Another indicator to consider is employment. The level of employment can be a good indicator when trying to determine a potential customer base as people who are employed have more disposable income than those who aren't. The minimum wage can also be factored into your analysis of market potential. Look for countries where the employment level and minimum wage are currently on the increase. You should also look into local employment conditions and restrictions. You will often need to employ local people in your international operations, so you need to be aware of labour union involvement as well as labour and skills shortages. Investigation into the local inflation rate should also be undertaken as a country with high inflation symbolizes erosion of customer purchasing power and falling exchange rates. Foreign currency exchange rates are another important factor when determining the viability of a new market. You need to remember that your investment may gain or lose value depending on the value and volatility of the exchange rate. Governments may also place limits on currency exchange in a bid to prevent inflows and outflows of capital into a country, potentially impacting on your business operations. A thorough economic analysis will significantly improve your chances of success internationally and can save you from making costly mistakes.
3.0 Cultural Environment
There are a number of key cultural elements that XXXX Brewery need to take into consideration when designing products, developing promotions and implementing distribution systems in foreign markets. These elements include values, beliefs, thought processes, symbols, traditions, religion and language. Religion, tradition and local customs are very important considerations. You need to make yourself aware of the local culture to ensure that you don't accidently or carelessly offend people. It is important that you remain sensitive and tolerant to different points of view and ensure that your brand doesn't contain any symbolism that could be offensive in the local culture. An example in your case would be to not market in Muslim cultures as they are not allowed to consume alcohol. Another important cultural element that needs to be considered in international business is the language. Being able to speak a foreign language or have some understanding of phrases helps to gain greater acceptance as they respect you have made the effort to learn the language and allows you to gather and evaluate information easily. Another important element is business etiquette. Even tiny mistakes in international etiquette can have a negative effect on your success. They may be interpreted as a significant lack of manners and can put an abrupt end to your business abroad. To your business partners, you will appear uninformed or downright rude, and you might jeopardize your business deal if you do not take the time to research social customs and international etiquette beforehand. This is why it is essential that you gather an understanding of each culture that you intend to market towards to increase the chance of success.
Marketing is a crucial part in any businesses…