Problem Statement
The company with its current success has been looking to expand itself in the market through its franchised brand Espressamente. The potential markets that have been discussed in the case have been the Indian, UK, US, Japan, Germany, Brazil and Chinese markets. The company has to basically decide the international which should be pursued by Espressamente.
Question 01
Brazil CAGE analysis
Cultural distances
Urban coffee culture
Second largest coffee market
Administrative distances
High interaction relationships
Growing franchise culture
Geographical distances
Strong local brand loyalty
9054 away from Italy
Economic distances
Successful in Foreign direct investment
Low per capital income
Expected growth in coffee market 30%
China CAGE analysis
Cultural distances
Established product category
Administrative distances
Minimal to go sales
Saturated market
Franchising popular but risky
Geographical distances
Large population lives in urban areas
8147 km away from Rome, Italy
Economic distances
Projected growth 10.7%
Rising income
Germany CAGE analysis
Cultural distances
Ranked second in terms of coffee consumption
150 liters’ coffee consumption per person
Interest in preparing fresh drinks
Administrative distances
Healthy business environment
Stiff competition
Geographical distances
Large population lives in urban areas
736 km away from Rome, Italy
Economic distances
15% per capita decline coffee
Growth in the market is projected
India CAGE analysis
Cultural distances
Bureaucraticculture
Increasing trends towards global lifestyle
Administrative distances
Sixth largest producer of coffee
Franchising system is prevailing
Stiff competition
Geographical distances
Large area to open up coffee business
5929 km away from Rome, Italy
Economic distances
Growing economy
Increased middle class
Japan CAGE analysis
Cultural distances
People willing to accept change
Administrative distances
Ranked third in the coffee importers
Innovation in product category
Difficult to franchise............................................
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