Benefits of International market
After industrial revolution, globalization has again changes the business environment that is observed all over the world. One of the significant objective and aim of any company is to be a global player and leave a global footprint in the industry of operation. It is an inspiring and motivating idea for every business organization.
In a broad spectrum a business can be said to have two markets one is the domestic market which is the country of origin for the company and the other is the international market. Internally market strategy deals with policies and decisions that are made by a company to place and promote the goods or services the organization has to offer in the market which is beyond the geographical boundaries of the domestic country. Global marketing offers a plethora of advantages and benefits to a business; it not only guides the company to increase the customer base it also assists in developing goodwill and creating a brand image. Identifying and analyzing the advantages can assist businesses of all scales to strategies their global market penetration plan as well as pay attention to the customer services (Verbeke 2013).
Global networking: New business arrangements and business partnership opportunities open for a company once it has the exposure in the global market. The scope of a business increase as cheaper alternative to expensive resources can be found in the international market place. Networking is a key to successful business.
Better revenue potential: if a company can sell products to larger target audience then it is bound to flow more revenue into the business, the potential leads of a company increases hence making the sales potential better.
Increase in the scale of business: Aforementioned with the increase in the potential leads of the goods or services of the company the potential sale also enhances resulting in better economies of scale for the business. It in turn reduces the cost of the business through pushing higher volume of sales
Exploration: Opportunities and threats for the business both increases with global expansion. The company may find a market where the demand for the goods or service may be more than the domestic grounds. There is also a possibility of facing less competition depending on the industry and the nature of business. This decreases the dependency on the domestic market.
Creating a significant brand image: it is one of the significant steps in marketing to develop a brand image in order to make a place for the brand in the minds of the target market be it domestic or International. Global branding works in developing a reputation and goodwill for the company which adds to the sales maximization and revenue.
Cadbury Schweppes aims to keep its position as a market leader and stay in the top three position of the market share in the industry. It also wants to combine the position it has in the soft drinks industry worldwide as the largest and most successful non-cola brand owner. According to the statistics that has been provided in the case study Poland stands 20th on the per capita consumption of confectioneries in the world.
Opportunities why Cadbury had chosen Poland to invest
Cadbury Schweppes is a well established and a popular company of Britain that has a reputation of serving high quality goods as a reasonable price. The company had chosen Poland to mark its point of entry in to the central and eastern European market. In 1994, Poland had ranked 20th in the per capita consumption of confectioneries. It was observed that Poland had the largest population out of four countries that were narrowed down it also had a good percentage of private sector business. The consumer market of Poland was also significant and was a great opportunity for Cadbury to invest. The relationship with Poland and United Kingdom’s also gave advantage to the British company to set foot in the polish market. Polish government had authorized a correlation agreement with the European Union and had built a stable parliamentary democracy. The polish government acknowledged the potential of globalization and also wanted to come out of the communist image in order to proactively face market forces internationally (Gong 2015).
Employment opportunities in Poland: As Cadbury is a large scale company the expansion in Polish market will require a large recruitment of people in the senior management sector who understands the market forces as well as work force to run the daily operations of the business. Poland as skilled and trained people who will be get a better opportunity in term of their carrier as well while working with Cadbury (Ramli 2017).
Target Market: the expansion to the polish grounds will offer the company a new range of target market and new opportunities in terms of diversification and innovation of the products.
Government pursued a policy of open trade: After the fall of the communist regime the polish government encourages foreign trade and opened opportunities for internal investors in the market.
Resource for expansion: there were resources for the company to expand in Poland in terms of land and labor which are the two fundamentals of business operations (Ramli 2017).
Absence of major international competitors: Cadbury had evaluated Poland as a land of opportunity and growth. Despite the fact that at that point of time Poland was analyzed one of the leading confectionery markets in Central and Eastern Europe, the international competitors of Cadbury had not established their footprint in the country (Rugman and Verbeke 2017).
Marketing Strategy :Entry strategy
Cadbury had coined three strategies to penetrate the polish market: export goods and products from other Cadbury Schweppes originations in to the country, develop a partnership, imitate an acquisition or create a joint venture with local Polish companies or build and creates its own factory locally and start producing and manufacturing products in Poland.
In order to safeguard the interest of the local industry the Polish government had come up with new import duties that were significantly on the higher end for products like confectionery. Hence considering this situation and dynamics of the Polish economy exporting to Poland was not a feasible selection to the company.
For the second option the company began evaluating options for acquisition or mergers and even joint ventures with a polish company but the research recognized several issues. Therefore the company had rejected the second option of market entry as well and focused on manufacturing in Poland (Grant 2016).
Product and price
Taste and preference in confectionary vary from one place to another hence it was very important to understand the market for Cadbury. The organization opted to produce goods from the existing range of products especially the ones that would keep up with the flavor and taste preference of the polish market. Under the name of Piasten, Cadbury Schweppes’ which is a brand in Germany the company decided to manufacture affordable rate products. All the items were decided to maintain the same integrity as it did all over the world of having supplied the target market with a high quality product at reasonable price (Rothaermel 2015).
In order to build a factory and develop a new confectionery business market in Poland, Cadbury Schweppes decided to invest around ?20m on a Greenfield site in the year 1993. The company conducted research in order to find a place these factors were considered: cost of the project, geographical feasibility, climatic condition, availability of resources, communication and transportation facility, regional population of the area. The construction of the infrastructure was going to be encompassing an area of 9000 square meters. The real challenge was to complete the project and begin production in order to cater to the season of autumn to spring which is considered to be high selling time of confectioneries (Rothaermel 2015).
Extensive research was carried out to understand the polish market preference as well as selecting the site to build factory and operations site. Market survey gave an insight of the polish rules and regulations regarding the external business environment to the company as well (O’Hara 2015).
The case study indicates the importance of market research and the observation of opportunities in international market. It explains the steps a company should take in order to expand business in global arena. Cadbury’s expansion strategy in Poland gives a holistic idea of the kind of challenges and issues that are faced by the company even working in large scale while expanding into the internal market. The company’s approach of dealing with the dynamics external business environment in Poland is a benchmark example. The company balanced the resources and internal business factors with the external environment to create a balance in the Polish land. The significance of research in the operating business is identified in the case study. The company in the first step to recognizes the right country has an evaluation process and determines the opportunities that Poland has to offer, then comes the market entry which is also strategized and a process of elimination of options is observed backed up by rational explanation.
Gong, Y., 2015. Global operations strategy. Springer.
Grant, R.M., 2016. Contemporary Strategy Analysis Text Only. John Wiley & Sons.
O’Hara, M., 2015. High frequency market microstructure. Journal of Financial Economics, 116(2), pp.257-270.
Ramli, N.S., 2017. A review of marketing strategies from the European chocolate industry. Journal of Global Entrepreneurship Research, 7(1), p.10.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Rugman, A.M. and Verbeke, A., 2017. Global corporate strategy and trade policy (Vol. 12). Routledge.
Verbeke, A., 2013. International business strategy. Cambridge University Press.