In this discussion, the group under consideration is Brazilian community and the samples are of the consumption of the Iced Tea and Lemonade as goods and services.
The organization is geared towards reducing the production cost and the cost of operation and the levels of profit maximizing.
From the feasibility study was initially conducted in Brazil where the organization wants to extend their products and services, there has been evidence that there are organizations who offer Iced Tea and Lemonade as goods and services. Lemonade seems to be one selling in the Brazilian market, and thus Iced Tea becomes the best option for competition purposes. It means that they will translate if proper strategies are put in place. Brazil’s Guarana Antarctica is the most famous soda of South America. Coca-Cola is also a famous one.
The price and advertisements are not affective at all. Since the popularity is very high and th goods under discussion are highly consumed in all over the country, the advertisement is only to maintain the status of their product in the community. The price, if increased or decreased, it would rarely affect the community but if the change is significant, then a large population would be able to respond either positive or negative on that change.
Proposed New Market Entry Strategy
Despite the fact that organization has been established, there is fear in the sales of beverages products and services due to the fear of the uncertainties.
One of the challenges when venturing into a new product is making a profit in the short run to ensure that they do not engage in activities that do not contribute to the final output of the company.
Some of the uncertainties involved include perishability of the products as well as the majority of the customers being involved in the production of grocery and food products from their homes in large scale.
Mode of the Market Entry
As a result of the above reasons, the organization should consider joining with another established organizations in the new market to ensure that products and services are released in the market with ease. This implies that joint venture should be considered as one of the strategies to take advantage of the already established market and customers who purchase types of goods and services. The organization will be in a position to reach the target customers within a very short duration of time (Chen et al., 2017). Another strategy that is suitable for the company is franchising where they are allowed to use another firms business brand and model for a given period after which they can get into the market by their own after being established and knowing what the market needs are Franchising and joint venture.
New market entry strategies are necessary as they give the organization a chance to conduct a practical trial in the market in which they are venturing. While in the course of conducting a test of the market, data and information regarding the consumption and the profit margin of the market are recorded which ensures that when they get into the market as an independent body they will be in a position to pick within a very short duration of time (Baena & Cerviño, 2015).
Market entry and trade barriers
One of the risks associated with the new market entry in the market is the foreign exchange risk.
Different countries can be associated with a specific currency issues which need to be to be considered by every organization before getting into the market.
The inflation rate in the various countries directly affects the prices of the products and services, and this turns out a risk that faces a new organization when venturing into the new market (Fillat & Garetto, 2015).
Government laws and policies, also known as sovereign risk, usually affects an organization directly since the production and marketing activities must be in line with the laid down measures. This implies that before the organization ventures into the market, they must first of all study the policies and legal issues that may affect their business negatively.
Another risk that is a risk that the organization is likely to be faced with is the cultural difference. Different markets in different parts of the world are associated with numerous cultural beliefs which may affect the acceptance of the services and products.
Baena, V., & Cerviño, J. (2015). New criteria to select foreign entry mode choice of global franchise chains into emerging markets. Procedia-Social and Behavioral Sciences, 175, 260-267.
Chen, P. L., Kor, Y., Mahoney, J. T., & Tan, D. (2017). Pre‐Market Entry Experience and Post‐Market Entry Learning of the Board of Directors: Implications for Post‐Entry Performance. Strategic Entrepreneurship Journal.
Fillat, J. L., & Garetto, S. (2015). Risk, returns, and multinational production. The Quarterly Journal of Economics, 130(4), 2027-2073.