Company Expansion into International Markets
My business, an international coffee franchise that operates in Europe, wants to diversify its operations by entering the American, Asian, and African markets. My company's potential growth as a coffee restaurant will be influenced by the nation's consumption of coffee, income per capita, and density of coffee shops (Alon & Lohwasser, 2012).
European Market
Europe consumes a lot of coffee, hence they have a coffee drinking culture.
American Market
America, on the other hand, may be a market for the coffee industry. Although they are aware of the product's health benefits, American customers like being seduced by appealing presentations (Alon & Lohwasser, 2012). For instance, an American coffee consumer will be interested in the health benefits of the product and the method of preparation, whether the company uses organic products or whether the coffee beans are genetically modified. Also, the American market is interested in the processes such as the roasting of the coffee beans.
Asian Market
China, on the other hand, is initially a tea market (International Trade Centre, 2010.). The number of coffee shops in China is few as compared to Europe and America. The coffee consumption in China is consequently very low. Research showed that the coffee consumption in China is high in the urban centers only. The Chinese consider coffee as a beverage that is for the top income earners, therefore just people who have a disposable income are the ones that usually purchase coffee.
African Market
In Africa, Kenya exports a lot of coffee to the foreign markets. However, the citizens of Kenya are weak consumers of the product. Majority of Kenyans also prefer tea to coffee. The culture in Kenya is that coffee is a preserve of the high-income earners who have disposable income. Consequently, just like in China, coffee sales are high in urban centers due to the different cultures in the country (International Trade Centre, 2010).
Risk Mitigation Strategies
These different markets pose cultural risks to expanding my business to these areas, and therefore they need various strategies to ensure that the company stays relevant.
American Market
For the American market, I will ensure that our outlets have the most sophisticated machines. Also, I would ensure that there are a variety of coffee types to choose from. I would even customize the products to ensure that we consider the clients that are health-conscious.
Asian Markets
For China and Kenya markets, the risk management will involve a lot of marketing strategies. For instance, I would lower the price of coffee slightly so that I can provide an option for clients who take tea. Also, I would include coupons and discounts as a marketing strategy to appeal to customers. I would also incorporate free internet in all cafes so that even workers and students can come to the outlet, have their coffee, and do their work. The students could even finish their assignments while sipping coffee.
Market Expansion Decision
The consumer culture will also influence the decision of which market the company should venture first. For instance, my company would consider venturing into the United States of America first. The United States already has a consumer base for coffee. I would only require the products offered in our outlet to conform to the culture of the American consumer. After the success of the venture in the American market, I would compare China and Kenya and choose the country where statutory regulations are more favorable for opening up a franchise.
References
Alon, I., & Lohwasser, M. (2012). The espresso lane to global markets. Retrieved from http://www.elmayorportaldegerencia.com/Documentos/Mercadeo/[PD]%20Documentos%20-%20Ivey.pdf
International Trade Centre (ITC) (2010). The coffee sector in China: An overview of production, trade and consumption. Geneva: ITC.
