The goal of this thesis is to find out if Lemonaid should take the opportunity to expand internationally and which market could be entered. Furthermore, it will be established how to approach and position Lemonaid in the market and deciding which market entry mode should be used to promises the best possible success. This leads to the central question of this paper: How could a best practice strategy for an international market entry of Lemonaid Beverages GmbH look like?
To answer this question, firstly the current situation of Lemonaid is assessed in terms of company resources and size as well as preparedness for internationalisation by using the Nine-Strategic Window framework. A potential market will be selected after it. In the third chapter, the market environment, the competition in the market and Lemonaid's competitive advantages in the market are analysed. For this purpose, Porter's Diamond, Porter's five forces and the competitive Triangle are used. After the assessment and the result of the analysis, the 4 P's (Product, Price, Place, Promotion) are determined based on a comprehensive SWOT analysis. Finally, the market entry mode is derived in chapter 5 in respective of all the information, analyses and data obtained.
In recent years, consumer behaviour in terms of sustainability, environmental awareness and social responsibility has changed significantly. Consumers become gradually more aware of the consequences of their purchasing behaviour and pay more attention to environmental, political and social responsibility. It is assumed that this trend will continue even more in the future. Based on this development, it is expected that consumers demand for sustainable products and especially for products from companies in compliance with these mentioned values will increase strongly. One company whose strategy and vision are based on the sale of sustainable, eco-friendly and fair-trade soft drinks is the Lemonaid Beverages GmbH located in Germany. The enterprise achieved strong growth rates in sales in the last years and distributes already in some countries outside of Germany. The continuing increase in demand of sustainable products offers Lemonaid Beverages GmbH opportunities to enhance their success by expanding into new markets.
Table of Contents
1. INTRODUCTION
2 CURRENT SITUATION AND SELECTION OF THE MARKET
2.1 Lemonaid Beverage GmbH
2.2 The nine strategic windows
2.3 Selecting the right market
3. ANALYZING THE MARKET CONDITIONS
3.1 Porters diamond – environment conditions
3.2 Porters five forces U.S. – competition
3.3 Competitive Triangle – international competitiveness
4. POSITIONING IN THE MARKET - SWOT ANALYSIS AND 4PS
5. ENTRY-MODE DECISION
6. CONCLUSION AND RECOMMENDATION
Objectives and Topics
This paper aims to determine the viability of Lemonaid Beverages GmbH expanding its international footprint and to identify the most suitable target market and entry strategy. By assessing the company's internal resources and the external market environment, the study seeks to develop a best-practice framework for an international market entry that aligns with the brand's commitment to sustainability and its social business model.
- Evaluation of company preparedness for internationalization using the Nine-Strategic Window framework.
- Market environment analysis through Porter’s Diamond, Porter’s Five Forces, and the Competitive Triangle.
- Strategic positioning of the brand in a new market based on a comprehensive SWOT analysis.
- Determination of the optimal market entry mode for a small and medium-sized enterprise (SME).
Excerpt from the Book
Entry mode decision:
On the one hand Lemonaid should establish a sales branch with initially 1-2 employees and a small office with a small warehouse in the chosen place from chapter 4Ps. The two employees should only be responsible for finding new customers, maintaining customer relations and simple marketing activities in reconciliation with the headquarter in Germany. Warehouse and office should be leased to ensure flexibility and reduce exit barriers. On the other hand, the expertise of a local sales agent or consultant who knows the local market and can, for example, establish contacts with customers in the on-trade market, where Lemonaid wants to place itself, should be used in the beginning. This could be done in cooperation with the local employees so that they get experience. Furthermore, an attempt should be made to sell the soft drinks from Germany to the customers by drop shipment and to keep only a small stock in the warehouse in the US in order to keep the costs as low as possible. Imports and exports as well as the entire logistics could thus be managed from the headquarter in Germany. Invoices to the customers should be issued exclusively from the German headquarters, so sales would be generated in Germany. As brand awareness, customer base and sales increase, further Investments should be made to generate more sales in America.
Summary of Chapters
1. INTRODUCTION: This chapter defines the research question regarding a best-practice strategy for Lemonaid's international market entry and outlines the methodology, including resource assessment and environmental analysis.
2 CURRENT SITUATION AND SELECTION OF THE MARKET: The company's status is assessed as an SME, and the USA is selected as the primary target market due to its cultural proximity, economic conditions, and high market demand for sustainable products.
3. ANALYZING THE MARKET CONDITIONS: This section provides a detailed analysis of the US market environment using Porter’s Diamond, evaluates industry competition via Porter’s Five Forces, and assesses product competitiveness through the Competitive Triangle.
4. POSITIONING IN THE MARKET - SWOT ANALYSIS AND 4PS: The chapter synthesizes previous findings into a SWOT matrix to determine the optimal marketing mix (Product, Price, Place, Promotion) and strategic focus for the US market.
5. ENTRY-MODE DECISION: This chapter evaluates various market entry options for an SME, ultimately recommending a hybrid approach involving a sales agent and a local sales branch to balance control with risk.
6. CONCLUSION AND RECOMMENDATION: The paper summarizes the strategic findings, reaffirming that Lemonaid should pursue a niche premium strategy in the US market using a combination of export and hierarchical entry modes.
Keywords
International marketing, Lemonaid Beverages GmbH, Sustainability, Market entry, SWOT analysis, SME, Porter's Five Forces, Premium soft drinks, US market, Market positioning, Competitive Triangle, Social business, Global marketing strategy, Export mode, Distribution channels.
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on developing a best-practice international market entry strategy for Lemonaid Beverages GmbH, a German-based social business producing sustainable, fair-trade soft drinks.
What methodology does the author utilize to evaluate market suitability?
The author employs a structured scientific approach including the Nine-Strategic Window framework, Porter’s Diamond, Porter’s Five Forces, the Competitive Triangle, and a comprehensive SWOT analysis to determine market potential and competitive advantage.
Why was the USA selected as the target market for Lemonaid?
The USA was chosen due to its significant market size for soft drinks, high consumer demand for sustainable and organic products, and cultural/economic similarities to the German home market, which facilitates a lower-risk entry.
What are the core competitive advantages of Lemonaid mentioned in the study?
The core advantages are the unique social business model, the high-quality ecological ingredients, the fair-trade certification, and the strong, transparent brand reputation which is difficult for competitors to replicate.
How does the author recommend positioning the brand in the US market?
The recommendation is to position Lemonaid as a "high premium" brand, targeting niche segments like upscale restaurants and convenience stores, while leveraging social media for targeted communication to younger, eco-conscious demographics.
What market entry mode does the author propose for Lemonaid?
The author proposes a hybrid entry mode: establishing a small sales branch (hierarchical mode) while collaborating with a local sales agent to leverage local market expertise, maintaining logistics and invoicing within the German headquarters to keep costs and risks manageable.
How does the author propose dealing with the higher price point of Lemonaid products?
The strategy involves clear marketing of the brand’s sustainable values and the donation-based business model to justify the premium pricing to consumers who prioritize these aspects over lower-cost mass-market alternatives.
What are the primary risks associated with the suggested entry strategy?
Primary risks include increased fixed costs from establishing a sales branch, potential currency fluctuations, trade barriers/import duties, and the competitive threat posed by established industry giants like Coca-Cola.
- Citar trabajo
- Erik Hündling (Autor), 2021, International Marketing Management. The example of the Lemonaid Beverages GmbH, Múnich, GRIN Verlag, https://www.grin.com/document/997200
