Any company that engages in any form of business has profitability at the back of their minds. Besides maximizing profits, they also try to maintain their corporate social responsibility. Such responsibilities, including providing job opportunities, get rid of discrimination and protecting the environment (Desrochers, 2010).
With the growth of the world economy, there has been an emergence of new markets in which different businesses would want to engage. Most companies are involved in international trade for the following reasons: increasing demands, acquiring capital, mitigating risk, and diversifying revenue and supply sources (Managementstudyguide.com, 2015).
International business refers to when there are production and distribution of goods and services across country borders. A global economy creates excellent business opportunities; this happens due to the reduction of trade barriers and the changes in consumer preferences (INTERNATIONAL BUSINESS LEARNING OBJECTIVES, n.d.).
Many companies have a vision of entering and conquering markets that are primarily not in their country of origin. They would want to create dominance in different countries and be a success. When planning to enter into a new country, a company needs to have an entry strategy that will have vital choices that will help in knowing how to navigate the new territory (Vermeulen, 2001).
In this paper, I shall outline how the BrewDog beer company can strategise itself and enter into the Russian beer market.
BrewDog is a Scottish craft beer, created by James Watt and Martin Dickie in Fraserburgh in 2007. The founders met while in school at the age of 24 years. James Watt was studying economics and law, while Martin Dickie was studying brewing at Heriot-Watt (Headspace, 2019).
The mission for BrewDog was to revolutionize the beer-making industry and to re-define the beer-drinking culture of the British people and also to make other people as passionate as they were about the consumption of craft beer (BrewDog.com, 2009).
BrewDog has grown to be one of the best craft beers in the world, which uniquely runs its operations. It raised funds for its expansion through crowdfunding for shares equating to 8% of the total capital of the company and raised £2 million. The company exports to over 60 countries in the world and has been valued at more than £1.8 billion (Headspace, 2019).
This beer has achieved significant milestones in a short period such as becoming Scotland's largest independent brewery in only its second year, by 2009, BrewDog became UK's fastest-growing alternative beer. Within that year, they also brewed the world's strongest beer at 32% alcohol level (BrewDog.com, 2009).
BrewDog has grown to become an award-winning craft beer and has been able to expand its operations and also introduce a wide range of craft beer products to its portfolio. The uniqueness of BrewDog is how it can involve other people in its activities and develop products that resonate with the needs of the population that loves beer (BrewDog.com, 2009).
As a company of firsts, in 2018, BrewDog opened a craftbeer hotel-the doghouse- which is situated next to their Columbus brewery and also, they have opened a beer museum. BrewDog also broke the record for equity crowd funding by raising over £126million. The BrewDog manifesto was also launched where it gives the blueprint for the future in terms of improving the quality of the beer, and people (www.BrewDog.com, n.d.).
Situation analysis refers to the process by which a company evaluates the environment where it is seeking to implement its mission, vision, and goals. In conducting a situation analysis, the internal and external conditions have to be analysed and to ensure that the company will be able to perform better in the new environment, it wants to set up shop (Brnjas and Tripunoski, n.d.). Conducting s situation analysis is vital as it enables a company to know the type of marketing strategy they can employ.
In conducting a situation analysis, two significant considerations have to be put in place; macro-environment analysis and macro-environment analysis. The macro-environment analysis involves factors that the company has no influence over, and they include factors such as opportunities and threats that can impact a business. In contrast, micro-environment consists of the inherent characteristics of a company that can propel it to perform in the new market that it is entering (Brnjas and Tripunoski, n.d.).
The Russian economy is one of the strongest in Europe and has remained on a steady rise over the years with vast oil and gold reserves (The Economist, n.d.). Over the years, the market for import beer into Russia has been growing. A brand that is not well known can sell very well in Russia so long as they have a good distribution network and a fair price (Anon, n.d.).
BrewDog should enter the Russian beer market as the imports of beer grew by two-digit rates, exceeding the dynamics of other market segments. The beer imports increased by 15% to 351 million litres. The premium market for beer has played a significant role in increasing the import business for beer as it grew by 0.6 p.p to 4.6% of beer imports into Russia (Anon, n.d.).
Craft beer consumption has been on the rise in the Russian market due to the foreign breweries being known in Russia. Many consumers of beer in Russia tend to take more of the foreign beers than the local Russian beers (Themarketingconcept.com, 2019).
An analysis of the internal business environment is crucial as it examines its resources, competencies, and advantages it has over its competitors (Themarketingconcept.com, 2019).
- They have a product that has a quality and unique taste. This flavour always tastes fresh because it is