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Comparative Analysis

CAGE Framework

Cultural Sensitivity

The cultural sensitivity describes the culture of its people to speak different languages and are related to different ethnic backgrounds. High profile countries that include United Kingdom, United States, and Germany have a high sense of cultural sensitivity where they have different cultural citizens from different ethnic background with different religions. However, India and Brazil have the highest population of locals residing with similar ethnic backgrounds and similar languages. The presence of cultural sensitivity allows companies with various opportunities to target a different set of customers.

Administrative Sensitivity

The administrative sensitivity describes that the country has political hostility and lacks trade amongst different regions. China, UK, US does not have administrative sensitivity and thus it is safer than most countries for investment purposes. India has political hostilities amongst different political parties and companies might hesitate for investment.

Geographic Sensitivity

This represents the physical distance between the bordering countries and the lack of borders. UK and Germany are the part of the European Union and they do not have any difficulties in passing through the borders. If the physical distance is higher in a country, then it would attract less customers abroad to avail the similar products and investments.

Economic Sensitivity

This indicator describes the low per capita income and have a clear and wide differences between rich and poor. As Brazil and India are in the phase of growth, therefore they have a low per capita income and the difference between rich and poor is high.

Alternatives

Three alternatives have been described here under which illustrates the pros and cons for each market in order to make investments in these countries.

Invest in Brazil and India

Advantages

The two economies have comparatively higher consumer savvy market in which consumers can identify the quality of coffee marketed
The per capita income in Germany and UK are 90,878 and 102,275 respectively, which is the second and third largest per capita income.

Disadvantages

The market saturation is higher for the two countries because where there is minimal chances of growth
The projected percentage of growth of coffee in Germany and UK are 2% and 16%.

Invest in China and United States

Advantages

Second largest projected growth rate of coffee in China and the highest income per capita for US
US is ranked 4^th in terms of ease of doing business in the country.

Disadvantages

Illy has never stepped its foot in the Chinese market, which may cause the company to make errors
Only 560 coffee houses are present in China, which highlights low potential of coffee house market.
Only 4% projected growth of coffee in the US

Recommendations

It is recommended that Christophe Reale shall make investments for Espressamente in Brazil and Indian market in order to gain future growth opportunities. The two economies have the highest projected growth rates for coffee and are also highest in terms of urbanization in the country. Previously, Illy has been successful in targeting the Brazilian economy and have 66,000 Kg of sales volume in the particular country. While considering the Indian market, although the company has not fully gained the confidence of the market, but a slight change in the strategy can impact the entire sales of Illy. The target market for Espresamente in India can be catered due to the presence of difference between rich and the poor.

Implementation

In order to implement the particular strategy recommended to enter Brazilian and Indian market, the company shall make joint venture with the local coffeehouse for their particular market. Making strategic alliance with the local companies will help Espressamente to develop the understanding of the local market and their consumption per capita................................

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