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Write 3 page essay on the topic Discussion The Espresso Lane to Global Markets.Therefore, it would be difficult to enter the German market due to declining consumption for the past 15 years. However m
Write 3 page essay on the topic Discussion The Espresso Lane to Global Markets.
Therefore, it would be difficult to enter the German market due to declining consumption for the past 15 years. However much its consumption is projected to rise, it couldn’t be advisable to enter the German market. It would be challenging to sell Espresso in China since most Chinese patrons of premium coffee shops preferred lattes, cappuccinos and mochas to espressos which they considered bitter.
Economic growth of a country determines its consumer’s purchasing power. It is therefore possible for Illy to enter all the discussed markets that is, Brazil, China, India, Japan, United Kingdom, the U.S and Germany. This is because their economies are developed meaning there is increased purchasing power parity. Economic growth is directly related to market maturity and concentration of coffee shops. India for instance had room for 5,000 cafes. This means that Illy could capitalize on the less concentration of coffee shops in India and enter the market. The UK had a high concentration of coffee shops, meaning there were more consumers. With high consumption, it would be profitable for Illy to enter the market, although it will face completion from Costa Coffee, a local brand in the UK. Illy would also face similar challenges in Brazil where the local brands were still strong (Alon & Lohwasser, 2012).
Growth of the franchise sector is also a key driver for Illy before entry into the market. For instance, the poor economic conditions in Japan led to the flattening out of the franchising sector. This forced companies to adjust their concepts to local tastes and expectations in order to ensure success. This would affect Illy’s quality of coffee produced, not forgetting that Illy was obsessed with quality (Alon & Lohwasser, 2012). In China, foreign franchisees were not allowed to purchase directly real estate property located in China
