Fernandes on the move : market screening tool for Fernandes

Fernandes is a Surinam company of which the soft drinks are licensed by Coca-Cola Enterprises the Netherlands. Fernandes is a soft drinks company that wants to enter the international market through export. At this moment, Fernandes soft drinks are being sold in Surinam and the Netherlands and the soft drinks have proved to be very successful over the last years and therefore the company wants to expand its business to the international market. Prior to market entry it is important to make an estimation of potential market demand and to conduct a systematic and comprehensive assessment of global market opportunity. The purpose of this thesis is to assist Fernandes in their efforts to expand in the European market by the development of a market/industry assessment tool and to offer guidelines on how to implement this tool. The following problem was defined during this research: To answer this problem definition, a market/industry screening tool has been developed during this research. This screening tool is used to compare the selected target countries on several internal and external indicators focusing on the company Fernandes and the soft drinks industry. The screening tool is a gradual elimination method focusing on the internal and external analysis. The internal analysis shows the current situation to indicate what characteristics of Fernandes are of influence on the market screening tool. During the internal analysis Root’s ‘Factors in the Entry Mode Decision’ model has been used. This model received some adjustments by including the product/industry characteristics used by Cavusgil et al in the screening process. From the internal analysis can be concluded that Fernandes operates in the fruit-flavored soft drink market, a very specific market with several major competitors also offering soft drinks from the Caribbean and already having years of experience doing business internationally. Fernandes should focus on brand awareness and make use of the CCE network if possible. The external analysis includes two phases; the preliminary screening and in-depth screening and has been tested according to an application of the model to screen six target countries selected by Fernandes: Belgium, France, Germany, Turkey, Spain and the United Kingdom. The Overall Market Opportunity Index of Cavusgil combined with the country ranking method of Cavusgil et al. provided the basis during the preliminary screening to measure market potential and to select the most promising target country. After the preliminary screening, three countries were selected for in-depth screening: Belgium, Germany and the United Kingdom. Whereas the preliminary screening focused on overall market attractiveness, the in-depth screening focused on industry specific market potential with the use of the industry/market factors of Cavusgil et al. The external analysis concluded that Germany offers the best opportunities for market entry. The preliminary screening indicators as well as the in-depth screening indicators pointed towards Germany as most promising country. Germany has a large market for carbonated soft drinks and consumers have a large preference for fruit-flavored carbonates. A drawback can be that Germany is not a CCE country. This means that Fernandes cannot make use of their network when doing business in Germany. After the internal and external screening phases, global market opportunity assessment continues with analyzing competitive forces and visiting those countries that appear to have good prospects and selecting foreign business partner. It is advisable for Fernandes to hire an international export manager who continues the market assessment starting with Germany to get in contact with a local business partner in order to start exporting the Fernandes soft drinks.