Partner Corporate Environmental Performance -Myassignmenthelp.Com

Question: Discuss About The Partner Corporate Environmental Performance? Answer: Introduction Lavazza coffee is a leading coffee brand which was founded in 1895 by Luigi Lavazza. The brand started as a small grocery store. It is still run by the fourth generation of the same family. Lavazza imports coffee from various parts of the world and have given birth to the idea of blending different coffees. They organization believes that the blending of different coffees is the key to their success and unique taste. The brand is a market leader in Italy and has a wide presence in over 90 countries across the globe. Caf Crema is one of the leading offerings of Lavazza coffee. This particular coffee consists of a 100% Arabica blend. It has a unique and fragrant aroma and is composed of Indian and Brazilian coffee. The coffee is fairly strong and is largely in demand among people across the globe. Lavazza coffee brand classifies their coffee in 10 different profiles based on their taste, flavor and body (Carey, 2016). Caf Crema falls in the 7 category signifying that it is a balanced coffee which is rich in taste. This report throws light on international expansion recommendations for the brand. The countries considered for the same are China and Australia. This report highlights the business environment for Lavazza to enter and flourish into these two countries as well as the modes of entry recommended to the firm. International expansion International expansion is when organization move ahead of their local boundaries and expand into international geographies. The era of globalization has made this fairly easy and largely prominent. Lavazza coffee already has presence in over 90 countries of the world. Expansion of Lavazza coffee further would be another milestone for the brand owing to the strong brand name the company possesses. The level of brand awareness is high accounting people and hence it would be easy for them to accept it. Depending on the creativity and uniqueness of product promotions, it is even possible to generate curiosity and excitement in the minds of new customers for the brand. The increasing coffee consuming population is adding cherry on the cake. Potential markets The potential markets chosen for the brand are Australia and China. The reason behind considering these two countries is their increasing population, changing demographics, ease of doing business index, disposable income of their people and growing economic environment. Both Australia and China are developed economies and have a significant contribution to the worlds growth. The macro environment of the two countries can be better understood by conducting a PESTLE analysis which is as below (Newton, 2014): Australia Politically Australia is a democratic liberal democracy. The intervention of government is partial and most of the businesses are in private hands. The open government is a clear advantage for any new business. The tax system is largely favorable and the costs involved in starting a new business are competitive. Economic Economically Australia is a great opportunity for any entrepreneurs. The ease of doing business in the country is high and at present it ranks 14 in the world. Australias non-farm payrolls employment number are rising and hence the country is welcoming new businesses with open arms. The inflation is contained and the overall business market is open with bare minimum restrictions. Social Socio-cultural factors affecting any organization refer to the set of beliefs, customs, behaviors and practices that people of a region predominantly follow. The country is ranked 42nd in the worlds coffee consumption which is more than most countries. The level of education in the country is highest yet. The influence of the British is very large on the population and hence the coffee culture is on a rise. Technological As of 2011, almost 79% of the population in the country is internet savvy. Over 17million people are smartphone users. These two factors alone are evidence enough of the technological growth and development of the country. Technological advancement of any country acts in the favor of a new business establishment as it helps the business in enhancing the reach to the customer. Legal Australias business laws are simple and make the entire process of starting a new business rather convenient. The company must be registered as a foreign company followed by obtaining permits to run operations in Australia are the two basic necessary steps that must be adopted by the company before venturing into this country. The business taxes that need to paid are as below: Corporate tax Goods and Services Tax Capital gains tax Other business taxes. Environmental Managers of any organization must take into account the environmental and ecological factors impacting the country of operations. Lavazza has a project Tierra running in order to ensure sustainable development of the planet. After due consideration of the ecological environment of Australia, similar project can be included. Australian governments are particular about their carbon footprints. It is essential that the wastes from businesses in Australia is disposed in an efficient manner. Political China is a constitutional monarchy. Both formal and informal organizations must abide by government rules and regulations. The political stability of the country is currently a question mark. The increasing privatization is a boon for new businesses. However, the intervention of government in the starting up of a new business is one of the highest in the world. Economic China is a developed economy with a rising inflation. The employment numbers are getting better and the steps taken by the government to control the population are expected to improve them further. China is ranked 78th in terms of the ease of doing business in the world according to World Bank reports. The increasing inflation is reducing the disposable income of people making the country a non-favorable destination for marketers. Social Socially, China has improved leaps and bounds over the last few years. The government has put efforts in curbing the unfathomably and aimlessly growing population of the country. The coffee consumption is evident and the large population of the country reduces the impact of existing competition. The level of education is growing and so is consumer awareness. Technological China is a birthplace for second hand technology. Any technology existing in any part of the world would have a me too product in China at a cheaper price. Even so, only close to 40% of the people are using the internet. Due to the uneven income distribution, some of the cities have become a massive hub for business and growth while some are still coming to terms with this growth. Legal There are various laws in place that govern new businesses in the country. The control of the government on the same is relatively high and makes it difficult for budding entrepreneurs to be creative. There is no such thing as an independent contractor in China. Therefore the company has to be registered as a foreign entity and be governed by those rules. Environmental There are various steps taken by the Chinese government for the betterment of the environment in the country. China has been conducting immense research in the field of solar energy and the availability of that technology is a boon for any new business in the country. The central government ideally issues strict compliances and the monitoring and enforcement of the same is done by the local governments. China has also been working hard on its carbon footprints and hence ensures that the organizations effectively use their resources. Selected market Given the above analysis, the appropriate market for entry is Australia. There are various reasons for selecting Australia. These reasons are as below: Higher ease of doing business Rank 14th in the whole world (World Bank, 2018). Controlled inflation hence higher disposable income of people. Population is more technologically aware and averse. Coffee drinking is an important part of their culture. British influence. Less government intervention. Increased privatization. Lesser competition as compared to China. General strategy Global standardization The biggest advantage of Lavazza stays with the strong brand name and history of the Lavazza family. For certain brands, it is important that they remain authentic to their roots irrespective of their company of operations. Therefore the strategy recommended to Lavazza coffee would be that of global standardization. This means that the company and its products remain the same across the world (Kotabe Helsen, 2014). It is true that the consumer needs and demands of every country is highly varied and it is largely difficult to presume that such a wide variety of peoples needs would be catered to by a single product. However, there are various advantages to adopting this strategy. The brand name of the organization is preserved. The authentic ideas and products remain the same. The longer term vision behind a global standardization strategy is to ensure customers across the world of the same taste, quality, richness and flavor of the coffee across the world. Such brands become home brands and they act as a safety net for people travelling to foreign locations. Moreover the huge line of Lavazza products ensures that the company is single handedly able to cater to the needs of diverse customers across the globe. Lavazza classifies its coffee into 10 categories. This division is based on the flavor, texture, richness and aroma of the coffee. Given the efficiency of this division as well as the large range of products in each range make it plausible for Lavazza coffee to cater to the needs of highly diverse customers with varied tastes and preferences in coffee. Entry mode in Australia Joint Venture Australia has a booming coffee market. Currently Lavazza products are supplied in the Australian food market Valcorp fine foods. However, the market penetration is bare minimum and the company barely holds any share in the market. In order to make its presence felt, it is imperative that organizations select appropriate modes to enter into a new country. This is crucial as the mode of entry has a rather longer term impact on the shareholding of the company. The entry mode recommended to Lavazza coffee for entry into Australia would be a Joint Venture. A joint venture is ideally a combination of two established companies (one local and one international) who come together and work in consensus. The exact holding of each organization in the collaboration is mutually decided. In this scenario, Lavazza coffee must indulge in a joint venture with a well-established name brand like Woolworths Limited. The various advantages of the joint venture between Woolworths Limited and Lavazza coffee would be as below. Local knowledge The idea behind tying up with a local brand is to gauge the knowledge that the brand holds about the local culture, customs, people and lifestyles of the area and use it efficiently to improve and establish business (Yan Luo, 2016). Woolworths limited has been in existence in Australia since 1924. After almost a millennium of a business, the brand obviously holds immense knowledge about the locals and Lavazza could really take advantage of that. When two leading brands like Lavazza coffee and Woolworths come together, they yield immediate response owing to the long term trust in the two organizations. Woolworths long history in the country has garnered immense goodwill in the market. When Lavazza coffee ties up with such a reliable brand, there will be a certain amount of trust and respect associated with the venture from the beginning. Shared risks and costs When two companies come together for a joint venture, they share the risks and costs of the ventures. Hence the burden does not entirely fall on one organization (Shah, 2015). This is a major advantage of joint ventures. Since Australia is a relatively new market for Lavazza, it is expected to come with a certain amount of risks in the business. These risks can be covered by Woolworths experience and knowledge of the area. Improved relationships and growing network The biggest advantage of a joint venture is the long term relationships and bond that forms between the two organizations. When two leading brands come together and work collaboratively, it signifies a road map for future growth and success of both the brands. Owing to Woolworths history in the country, they have built and established a grand network of suppliers, vendors, media personnel, distributors and other stakeholders of the business. Lavazza coffee can gain the direct advantage of this network and utilize it to their advantage, gain and growth. Growth Lavazza coffee and its growth in the international market is the agenda in the report. However, a joint venture with Woolworths limited will also lead to the growth of the local brand. This would be their introduction in an entirely different business segment. It would help them enhance their product lines and attract an even wider customer base for the business. Promotional strategies In order to be able to succeed in any new business, it is important that the product or service is promoted effectively. The promotional strategies of any business help the organization in reaching out a wide customer segment and market their products to them. International expansion also requires immense promotion from the brand. For the existing product, promotion strategies can be relatively easier but for an international expansion, the promotional strategies of the business have the responsibility of creating excitement about a new product in a new market. This can often be tricky. Strategies recommended to Lavazza coffee for effective promotion in Australian grounds is as below. Television advertising The first and foremost strategy that can be adopted by any business to venture into a new country is to reach out to people through television. The viewership of television is massive in almost every part of the globe. This is why television advertisments lead to an enhanced awareness about the brand and its upcoming presence in their local countries. Lavazza coffee must ensure that they associate with leading channels and broadcast creative advertisements at peak watching hours. Interesting taglines could also be used by the brand like Soon in Australia or Now in Australia to make people aware about the introduction. Joint venture advertising In this case of a joint venture mode of entry, Woolworths limited must also work towards promoting Lavazza coffee to its existing customers and using their existing strategies. This would help in building trust and curiosity in the minds of the consumers. Social media marketing Social media marketing is the art of promoting any brand, organization or product through social media platforms. The growing usage of social media has now made these platforms a promotion for leading brands. Lavazza coffee already has dedicated Facebook, Instagram, Pinterest and Twitter accounts with a large number of followers. Social media marketing is a largely effective tool to reach out a large customer segment with the help of a single platform. Social media has also become a medium to enable a two way communication with customers (Solomon Tuten, 2017). In order to ensure this, Lavazza must enhance their social listening and be consistently aware of what is being spoken about the brand on various social media platforms. Facebook posts are often followed by various comments and twitter hashtags are largely responsible for creating a buzz in the market. These strategies of social media marketing must be adopted by Lavazza coffee to ensure a higher brand reach and improved customer base. Digital marketing Digital marketing enables users to look for a brand on search engines in an effective manner. At the same time, these users are targeted by the company on numerous digital platforms. This makes it easy for the brands to target customers based on their preferences, internet search history, location, cultures, behavior and cookies stored. Digital marketing breeds on search engine optimization and search engine marketing (Chaffey Ellis-Chadwick, 2016). Both these processes make it easy for consumers to reach out to their customers and consistently target them through different sources and destinations. Challenges of starting a new business in Australia No country in the world is perfect in every aspect. Even while starting a business in Australia, it is important to list down various challenges that Lavazza may face within the Australian market. This will help the brand stay prepared and be ready with a contingency plan as and when required. The various challenges of starting a new business in Australia are as below: It is important to submit the ASIC form 201. This is an application for the registration of a company. Availing construction permits is very difficult especially for a foreign company, Lavazza would be opening up outlets and hence this can pose a severe threat Attaining office utilities in Australia is a longer process than any other country. Utility involves basic utilities like electric and water supply. The company must complete a CT metering form to arrange for an internal wiring in the office. This entire procedure takes about 75 days just to get basic utilities in place. Taxation is taken very strictly. The corporate tax currently stands at flat 30%. It is imperative for Lavazza to familiarize itself with the taxation policies of the country. Australian culture is difficult to understand and track owing to a significant impact of nearby countries. Also the country has no majority religion of its own. This diversity in the population makes it difficult to understand the culture of the country. It is highly important to understand the GST (Goods and services tax) levied in Australia. There is already an increasing competition especially from Di Bella coffee which has become a global brand on its own. Recommendations Lavazza coffee is a leading brand in Italy and across the globe. After detailed analysis, a new prospective market Lavazza coffee has been finalized as Australia. This report has laid emphasis on international expansion strategies that can be adopted by Lavazza in order to expand to the Australian market. Expanding to any new markets requires immense expertise and knowledge. There are various circumstantial issues that must be considered. Few recommendations for Lavazza are as below: Know about the market Before venturing into this international market, it is highly recommended to know about the market well in advance. The firm must decide upon their location and distributors as well as customer preferences and ideologies. It is also important to understand the customer needs and work towards catering those specific needs of the consumers. Pricing strategy It is also important that while entering into a new market, the product must be priced effectively to ensure that people buy it. Lavazza follows a premium pricing strategy across the globe. Premium pricing refers to pricing the product slightly higher than the markets average (Hinterhuber Liozu, 2018). This way the brand, sets an effective positioning for itself and hence targets a niche market who can afford quality products at a higher price. For premium priced products, the target market of the organization shifts on the basis of income groups. Lavazza coffee will be opening up various cafes and hence it becomes crucial to effectively finalize the place where they set their caf. Lavazza coffee must select commercial places which are easy to locate. It will also be beneficial to have an outlet at leading airports of the country. Appropriate selection of place makes is plausible for customers to reach the outlet and hence leads to increased brand visibility and awareness. Promote well The last part of the product market involves promoting the product in such a manner that it is easy to reach out to consumers. Lavazza coffee must allocate unique strategies to ensure that that the consumers are aware about the product. The promotions of the company should be able to create a sense of curiosity and excitement in the minds of consumers. Digital marketing, social media marketing, billboard advertisement, television newspaper ads as well as email marketing can be used by Lavazza to reach out to its consumers. Conclusion Lavazza coffee is a leading coffee chain established in Italy. The brand has now become a global brand with a wide presence across the globe. This report throws light on the international expansion strategies that can be adopted by the company. For consideration, China and Australian markets have been considered. Of the two countries, Australia has provided for a better business opportunity for Lavazza coffee. This is due to the controlled inflation, high disposable income, increased ease of business, rising coffee population and internet aversion of the consumers. Australia is a land of a brilliant opportunity for Lavazza. It has been recommended that Lavazza must adopt a global standardization strategy and ensure that the look, feel, taste and flavor of the brand remains the same across the globe. Moreover, the entry mode to adopt is recommended to be a joint venture with Woolworths Limited. The brand image and the wide reach of the latter is sure to benefit Lavazza coffee. Lavazza coffee has a strong brand name and in order for further growth, it is important for the brand to analyze new areas of operation. Australia seems like that perfect next jump destination to make for the coffee brand. With appropriate pricing, unique promotions and clear understanding of the market, Lavazza coffee can surely gain a large market and enhance its customer base across the world. This would lead to the brands increased awareness, improved positioning and widened reach. References Carey, J.M., 2016. Visionaries: Creating a Modern Guggenheim. New York. Guggenheim bookstore. Chaffey, D. and Ellis-Chadwick, F., 2016. Digital marketing. Prentice Hall. Hinterhuber, A. and Liozu, S.M., 2018. Thoughts: premium pricing in B2C and B2B.Journal of Revenue and Pricing Management, pp.1-5. Kotabe, M. and Helsen, K., 2014.Global marketing management. Newton, P., 2014. What is the PESTLE Analysis? London, United Kingdom. Bookboon. Shah, K.U., 2015. Choice and control of international joint venture partners to improve corporate environmental performance.Journal of Cleaner Production,89, pp.32-40. Tuten, T.L. and Solomon, M.R., 2017.Social media marketing. Sage. World Bank. 2018. 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