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This assignment is a written strategic internationalisation report that your team (of 3 members), acting as consultants, will prepare for Coopers as part of the firm's preparation for expansion in Vietnam. Coopers is the same company that you have studied as part of your first assignment (i.e. the individual case analysis).
In this assignment, you should assume that Coopers is NOT YET operating/doing business in Vietnam. This assignment will challenge your team's capability to recommend whether the beer market in Vietnam is a market that Coopers should exploit, and if it is, be able to explain why and how.
This assignment is an opportunity for you to apply your knowledge of Global Strategy and International Management theories, concepts, models, frameworks and analytical tools in the context of an international company, Coopers. You will demonstrate your skills in systematic analysis of Coopers' global business environment and its plan for internationalisation in Vietnam. You are expected to draw on our learning and teaching materials, the Coopers case and supporting document (i.e. the industry reports – Australia and Vietnam), online academic journal articles and research databases that are accessible through our Deakin library. In this assignment, your group is expected to engage in research work in order to present a well-written report for Coopers. In other words, you are expected to go beyond the main documents (e.g. the case and industry reports) as far as necessary to present well-argued recommendations. Refer to our CloudDeakin for more suggestions on which resources to use in your research project.
Your team's task in this assignment is to work together in conducting research that will inform your report. There are specific questions that you will need to answer that will guide you in your task. A template is provided below. The maximum number of words is 4000 words. A critical factor in your preparation of the report is that all sections must be cohesive and integrated. In other words, all sections should be consistent and should build on one another.
Please use Times New Roman font, size 12, double space and 1 inch margin in all sides. If you cite any reference, the reference list is NOT counted in the maximum number of words. You are free to attach appendices (not included in the word count) to support your report. However, please use appendices sparingly and strategically because these will not be marked.
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Economic globalisation has offered various strategies for companies to expand into the international market and adapt to the local business environment (Hsu, Chen & Cheng 2013). This is a strategic internationalisation report that assesses whether the Vietnamese beer market is suitable for the international expansion strategy of Coopers Brewery South Australia (Coopers). The competitive position of Coopers is determined through its strategic objectives, the strengths and weaknesses when compared to its competitors, resources and capabilities and the influence of the value chain on its performance and in gaining competitive advantage. The institutional environment in Vietnam's beer market is assessed through PESTLE and Porter's Five Forces Model. Various opportunities and threats for Coopers are identified. Based on the analysis of both internal and external factors influencing the company, recommendations are made as to which mode of entry is suitable for the Vietnamese beer market. Finally, the key points and recommendations are summarised in the conclusion section.
Coopers Brewery established in 1862 is a fifth and sixth-generation family-owned business and an unlisted public company whose 90% of shareholders are family members. It holds the rank of 1276 among the top 2000 Australian companies. It is reported to have generated revenue of $239,000,000 and its consistent profit over the last decade reveals its commitment to the vision statement that 'Coopers is passionately committed to celebrating 200 years in the manufacture and distribution of the finest beers and brewing products' (Coopers Brewery 2013, p. 6). The main focus of Coopers is to capture niche markets where the key market is drinkers in the age group of above 35 years who prefer product quality over beer price. This is in line with the company's mission to 'creates great crafted beers and other natural products for the enjoyment of everyone' (Coopers Brewery 2013, p. 6). Though it holds 5% of the Australian beer market share, industry experts have observed that the key strengths of Coopers are its product differentiation and marketing strategy and the major weakness is its dependability on the Australian market (Australian Food News 2016).
The major strengths of Coopers Brewery are its products, consistent growth since its inception, marketing strategies, growth in the international market, capital investment decisions and domination in the craft beer market.
The core products of Coopers include a range of ales, stouts and lagers which are available bottled and, in most cases, on tap or canned. Its premium products have a distinguished cloudy nature. Its various products are brewed to suit different occasions. Also, special-limited editions are launched from time-to-time. Apart from the beer brands, it is also focused on the homebrew kits and malt extracts. In 2016, Coopers produced a record 81.5 million litres and posted the 23rd consecutive year of improvement with a compound annual growth rate of 9.2% (Coopers Brewery 2017). Despite its sales growth, the profit margin is being influenced by the pressure from major liquor chains and higher malt costs.
Coopers' marketing programs are centred on its history and family tradition of the firm. A traditional feel is rendered to its products with the used of either 'ale', 'stout', or 'lager' in their beers. It adopts multi-media marketing, and the common theme is the uniqueness of its products. Continued investment at the firm's new brewery and malt extract, with both a manufacturing and marketing focus, has meant that expansion into new markets has been achievable. Coopers holds the license for the Australian Made, Australian Grown (AMAG), which is used as a label to all exported beers (Australian Made 2011). Its growth is driven by an increase in offshore sales of beer and malt products which contribute around 10% of total sales (Main 2015). Despite its international availability, exports account for 2% of commercial beer sales (Spence 2016). The worldwide craft beer market is one of the fastest-growing beer segments. Coopers leverage this through its homebrew experience, setting it as a core product which contributes to 30% of the sales volume (Spence, 2016).