BIG COLA CASE international business PDF

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answers to the Study case cola case in international business...

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Inès Dubois – Louise Bustin – Ashley Belalan-Boucher – Malkiel Vadnai – Marie Boubennec BIG COLA CASE

1)

What are the main competitive advantages of AJEGROUP in its industry sector ? Are they easily transferred to foreign markets ?

AJEGROUP has a fair price. In fact, they sell their product at a lower price, 30% less than the average market price. Moreover, in each country they are selling their product, they have a unique market. In fact, they are adapting themselves to the peculiarities of the country and that is what makes them different from competitors that are implementing a one-size-fits-all policy. Additionally, AJEGROUP is using word of mouth and not paying any cent in advertising as their competitors. They are targeting homemakers that are interested in low prices and it distinguishes them from the others because they are targeting a specific type of people that others wouldn’t think about. AJEGROUP products are easily transferred to foreign markets because they have a good strategy and unique one that permits them to easily get into a new market. In fact, even if in the beginning they used word of mouth to promote their product, they are starting to expand their group through partnerships with football players.

2)

What variables/criteria can Big Cola use (AJE Group) for the selection of international markets ?

For the selection of international markets, as the entry strategy is based on entering markets with low incomes, one can look at the per capita income, the economic vulnerability of the market and its human development index.

3)

Which markets are the most attractive for company growth and reach its growth and internationalization objectives? Why?

The most attractive markets for AJE are the lower socio-economic classes, i.e. all countries where other well-known brands are too expensive (Coca, Pepsi). Thus, by defending its low price position, AJE Big Cola can differentiate itself from others and grow. The company can also focus on countries with a large number of housewives, as they are the ones who will be sensitive to the brand's price. Finally, the young middle classes are also very strongly attracted to such drinks.

4)

AJEGROUP is a low-cost company. What do you think about its strategy of sponsorships (F.C. Barcelona and the English National Team)? What are they seeking with this sponsorship programs? Should it be profitable for a low-cost company?

The AJEGROUP’s new strategy is to be on a global market and target more people. As seen, Asian countries pay a particular attention to the brand of a product. Therefore, by doing

sponsorship with big football clubs and football celebrities they are attracting more attention to their brands and products. Such brand awareness can only benefit the brand’s visibility around the world and attract a wider audience. For instance, fans of Messi will probably follow their favorite player by buying the same drink as him. And the fact that the product has a low price will push them to buy more in a way that they can afford something that their “idol” drink. In general, sponsorship is profitable. Indeed, it represents an investment however it is rapidly forgiven following the large income received through the sponsorship.

5)

Could the company reach its strategic corporate goals maintaining a small corporate and management structure?

Yes they can succeed in their strategy even being a small business. It will take a lot of work and organization for them. Only when they are successful they risk being overwhelmed, even if so far they have mastered different markets and different products while remaining a small business. Moreover, they already have succeeded by being a small business over several countries so they should be able to reach their strategic corporate goals still....