Assignment 4 GGW PDF

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going global...

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Final Results XANTERÎA COSMÊTICA

In this final report the results obtained from the expansion plan of Xanteria Cosmetica are presented, the data collected throughout the month is shown.

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About XANTERÎA COSMÊTICA We are a 100% Mexican brand of natural cosmetics, which seeks to highlight the beauty of each

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Research part 1 Researching about Xanteria Cosmetica, I obtained information about the growth it has had in recent years. The company began with small productions to meet its demand mainly in Nuevo León, currently they distribute to different states of the Mexican Republic, including Mexico City, Puebla and Michoacan. This brand of cosmetics is recognized in Mexico thanks to the type of products they manufacture, it has the certificate of "cruelty-free products" granted by the PETA foundation and also have the seal of "hypoallergenic products" which was obtained from the hand in hand with a team of researchers from New York. Another reason why it is expected to reach the foreign market is because of appearances and collaborations with professionals in the world of makeup. In 2019, the brand managed to collaborate with Vogue magazine, producing a red lipstick, which was used to make up models at New York Fashion Week for important brands such as Agatha Ruiz de la Prada, Ricardo Seco, Cartlon Jones, among others. No attempt has been made to enter the international market; what you want to achieve is the correct reach in northern countries such as the United States and Canada and southern countries such as Colombia, Chile and Peru. You want to be part of the Sephora team in the countries where these stores exist and exclusively in the United States at Ulta Beauty. With the resources that currently exist, it is very likely that it will be possible to venture into the large makeup distribution chains, the prestige that the brand has

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obtained in recent years, the quality of its products and its ideas make the entry process easier. to the world of retail. All the information was analyzed and important points were taken to be able to develop the SWOT that graphically represents the good, the bad, what to work on and what to avoid to achieve a correct entry into the international market. 1 SWOT CHART

Strenghts

Weaknesses

Quality in products National recognition Efficient production Good marketing plan

Wrong expansion Planning poor vision to achieve goals Certain negotiation skills are lacking Medium production, not large

Opportunities

Threats

Enter new markets Product portfolio expansion Distribution chain Greater diffusion of products

Competitive prices New independent Mexican brands Changes in trade policies Losing quality and recognition

As mentioned above, the greatest pos

nsion is sought in the American

continent, specifically in the United States, Canada, Colombia, Chile, and

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Argentina, that is why for some countries it is expected that the distribution and sale of products will be through of the Sephora chain and for the United States ventures into Sephora and Ulta.

Country

United States Expansion through Internationalization Expansion through internationalization is when a company goes beyond the country’s national border and market. The reason for internationalization is when the company has utilized all the opportunities in the domestic market. Now the brand expands into the global market to exploit

Expansion Strategy

opportunities in the international market. Multi-domestic Strategy: A multi-domestic strategy is when a company provides a customized product/service relevant to the foreign market conditions. It’s a costly strategy because of its research and development cost, market, and manufacturing costs by following the local markets’

Required documents

needs in different countries.  Entry Manifest or

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Application and Special Permit for Immediate Delivery, or any other form required by the port director. 

Evidence of right of entry.

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Commercial invoice or proforma invoice.

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Special requirements for commercial invoices per product.

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Packing list.

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Carrier's certificate.

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Power or legal authorization of representation.

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Individual or associate certification.

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Power or legal authorization for companies.

Budget INCOTERM

Country Expansion Strategy

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Customs guarantee bond.

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Total summary of the entry. $3,000 USD DAP-Delivered At Place

Canada Expansion through Internationalization Expansion through internationalization is when a company goes beyond the country’s national border and

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market. The reason for internationalization is when the company has utilized all the opportunities in the domestic market. Now the brand expands into the global market to exploit opportunities in the international market. Multi-domestic Strategy: A multi-domestic strategy is when a company provides a customized product/service relevant to the foreign market conditions. It’s a costly strategy because of its research and development cost, market, and manufacturing costs by following the local markets’ Required documents

needs in different countries.  Bill of lading or air transport letter 

Proforma invoice



Commercial invoice

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Certificate of Origin: Canadian Customs requires a certificate of origin to establish the origin of manufacture and to calculate the corresponding customs duties

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Packing list sometimes

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required as a supplement to the commercial invoice 

Sanitary or other inspection certificates may be required for certain types of products entering Canada, such as plants, seeds, animals, pharmaceuticals, nursery plants, and meat.

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Export permits issued by the exporter's government, such as the permit to import endangered species

 Canadian tariffs for the Most Favored Nation -NMFrange between 0% and Budget INCOTERM

Country Expansion Strategy

10% for cosmetic products. $3,000 USD DAP-Delivered At Place

Colombia Expansion through Internationalization Expansion through internationalization is when a company goes beyond the country’s national border and market. The reason for internationalization is when the company has utilized all the

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opportunities in the domestic market. Now the brand expands into the global market to exploit opportunities in the international market. Multi-domestic Strategy: A multi-domestic strategy is when a company provides a customized product/service relevant to the foreign market conditions. It’s a costly strategy because of its research and development cost, market, and manufacturing costs by following the local markets’ needs in different countries.  Commercial invoice

Required documents

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Packing list

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Seen good

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Letter of responsibility

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Certificate of origin

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Technical sheets

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Product handling sheets

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Insurance**

**not mandatory, unless the Incoterm negotiation term so indicates. Budget INCOTERM

Country

$4,000 USD DAP-Delivered At Place

Chile

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Expansion through Internationalization Expansion through internationalization is when a company goes beyond the country’s national border and market. The reason for internationalization is when the company has utilized all the opportunities in the domestic market. Now the brand expands into the global market to exploit Expansion Strategy

opportunities in the international market. Multi-domestic Strategy: A multi-domestic strategy is when a company provides a customized product/service relevant to the foreign market conditions. It’s a costly strategy because of its research and development cost, market, and manufacturing costs by following the local markets’

Required documents

needs in different countries.  Shipping documents: Original bill of lading, transport letter or air waybill 

Cargo manifest



Commercial invoice

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Packing list

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Assurance certificate

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Affidavit on the price of the merchandise

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Mandate

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Additional documentation depending on the merchandise to be exported, such as certificate of origin, licenses, permits,

Budget INCOTERM

Country Expansion Strategy

certifications, etc. $4,000 USD DAP-Delivered At Place

Argentina Expansion through Integration Through integration, expansion is when you combine/join various current operations of the company without changing the target customer market. Businesses and companies use a value chain system for integration. Forward Integration: Forward integration when a company

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opens up its brand retail stores and directly approaches the final customers and offers them the Required documents

product/service.  Shipping documents: Original bill of lading, transport letter or air waybill 

Cargo manifest



Commercial invoice



Packing list



Assurance certificate



Affidavit on the price of the merchandise



Mandate



Additional documentation depending on the merchandise to be exported, such as certificate of origin, licenses, permits,

Budget INCOTERM

certifications, etc. $5,000 USD FCA—Free Carrier

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Research part 2 For this project I considered 5 countries in America, including the United States. Each country will be analyzed individually and their advantages and disadvantages will be highlighted, in addition to highlighting important aspects of their cultures. The market to be covered is the beauty industry, the Xanteria company is dedicated to the production of vegan and hypoallergenic cosmetics. The beauty product consumer audience can be segmented in terms of consumer typologies. Four macro-categories can be identified: Traditional consumer. This is the person who normally goes to a perfumery reads magazines and buys foundation, eye and lipstick products. The traditional consumer is an individual who is influenced by media in his\her purchase decision process but does not invest his\her own time in the pursuit of the latest trend. He\she will always but in consideration of his\her financial availability, without behaving like a “rocketeering consumer”. New entrant. This is a consumer that begins to put on makeup when becoming an adult, starting from word of mouth, showing increasing curiosity towards these products and finally experimenting with them. This is a new entrant to the market, and as such will be more influenced by the communication efforts put forward by cosmetics companies, but he\she is unlikely to have a strong, personal passion for the industry. Beauty addicted. This is the customer that spends much of his\her time consulting blogs and tutorials, almost in a state of competition with other addicted customers 12

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in learning the latest news and rushes to buy the latest products regardless of actual needs. This is the “fashion victim” of cosmetic products and could be considered a lead user, in terms of understanding the use, positioning, and appeal of a new product. Beauty expert. This is a professional makeup artist either because of his\her career or because of a strong passion in the industry. This customer may have access to a variety of information channels, but without being influenced by opinions, and being independent in purchase choices. As a professional, he\she is likely to be especially loyal to a particular set of high-end brands to access a degree of reliability and consistency in his\her work.

United States The U.S. is a large country that boasts high-performance rail networks, highway connections, and air-traffic systems. Its well-developed logistics market has strategic centers in excellent locations. The preferred shipping options in the United States are UPS and FedEx. Small businesses may also use the government-run postal system (U.S. Postal Service). The vast majority of U.S. consumers are more likely to make a purchase when free shipping is included. More than half of consumers, in turn, are more willing to buy products when there’s a possibility of free returns and exchanges. When it comes to cross-border shipping, there are some challenges that need to be taken into consideration. These relate to security and counter-terrorism vigilance, economy and the impact of a recession, and regulations connected with import and trade. The U.S. customs authorities exercise detailed due diligence so you should ensure timely, correct customs paperwork. The more accurate the customs data, the faster the parcel will be out for delivery. The U.S. is one of the largest cross-border B2C ecommerce markets when it comes to both exports and imports. The most intensive B2C ecommerce trade between the U.S. and the UK is the result of the common linguistic background. A popular destination for online shopping is also China. The best way to enter the U.S. market is through partnerships or alliances with the big companies such as Sephora an Ulta, a well-structured partnership can benefit both parties in the following ways: Your partner can complement your capabilities and provide the expertise, insights and contacts that may make the difference

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between success and failure. Each company focuses on what it does and knows best. Both partners share the risk. In a partnership, you can also pool ideas and resources to help keep pace with change as well as approach several markets simultaneously. Your partner may provide technology, capital or market access that you might not be able to afford on your own. Strategic alliances can also be very profitable. One of the easiest ways to export is to form an alliance with a company that has a product or service that complements your own. Then you can save money by using the other company's distribution and marketing expertise. In this case, to transport the merchandise to the US, the most advisable thing would be in land transport due to the proximity, besides that it is much cheaper. The volume that will be exported to the US may be carried in a trailer container, so the costs should not exceed $ 3,000 dollars, taking into account the previously chosen INCOTERM (DAP). The moment is perfect to enter the market, since the pandemic situation is taking advantage of, since many clients are opting in support of small and independent brands instead of large companies that have different brands, in addition the prices will be more accessible than any product luxury brand and will have very good quality. U.S. negotiators have a distinctive style: forceful, explicit, legalistic, urgent, and results-oriented. Although these traits inevitably vary according to personalities and circumstances, a recognizably pragmatic American style is always evident, shaped by powerful and enduring structural and cultural factors. 2 USA CULTURAL ASPECTS

Forceful

Explici t

Negoti ation Cultur e

Urgent

Legalist ic

Result s orient

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Canada Canada offers lower corporate tax rates. In an effort to encourage economic growth and attract international business, Canada gradually reduced its tax rate over the last nine years from 18% to the current rate of 15%, which is one of the most competitive corporate tax rates in the world (compare to the U.S. tax rate of 21%). Business owners expanding to Canada will also benefit from its broad trade network, which provides an advantage to Canadian organizations with preferred access to global and diverse markets. Canadian trade pacts include the North American Free Trade Agreement (NAFTA), the European Union's Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Another Canadian business advantage is their commitment to innovation and, in support of that, the country’s efforts to improve their intellectual property (IP) regime by reducing administrative burdens and streamlining procedures for Canadian businesses. In 2018, Canada acceded to the Hague Agreement. This year, the country has agreed to join several other international IP treaties: the Madrid Protocol, the Singapore Treaty, the Nice Agreement, and WIPO’s Patent Law Treaty. The best way to enter Canada’s market is through partnerships or alliances with the big companies such as Sephora an Ulta, a well-structured partnership can benefit both parties in the following ways: Your partner can complement your capabilities and provide the expertise, insights and contacts that may make the difference between success and failure. Each company focuses on what it does and knows best. Both partners share the risk. In this case, to transport the merchandise to Canada, the most advisable thing would be in land transport due to the proximity (it can be by train), besides that it is much cheaper. The volume that will be exported to Canada may be cost around $3,000 USD taking into account the previously chosen INCOTERM (DAP). The moment is perfect to enter the market, since the pandemic situation is taking advantage of, since many clients are opting in support of small and independent brands instead of large companies that have different brands, in addition the prices will be more accessible than any product luxury brand and will have very good quality. Most Canadian businesspeople, especially those among younger generations, are experienced in interacting and doing business with visitors from other cultures.

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They often take a genuine interest in other countries and are usually open-minded rather than forcing their ways upon you. Canadians believe in the ‘time is money’ philosophy almost as strongly as Americans do. Scheduling meetings in advance is required. However, you can sometimes do this on short notice, especially if the parties have had previous business interactions. Canadians generally expect visitors to be punctual. Avoid being more than 5 minutes late, and call ahead if you will be. 3 CANADA CULTURAL ASPECTS

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Colombia Colombia’s GDP is steadily growing. 2015 saw a 3.1% bump, and while inflation remains at 4%, it’s expected to drop to 2-3% in the next year. Especially compared to its volatile neighbors, Colombia’s economy remains steady and ranked #53 in the World Bank’s 2017 Doing Business Report. In the last ten years, Bogota has received US$16.77B in Foreign Direct Investment (FDI), and that number is expected to increase due to the 2016 peace agreement with the FARC guerrilla group. Cartagena is booming, and i...