'Asia Pacific Breweries\r'

'International occupation Environment examine GROUP PROJECT: ASIA PACIFIC BREWERIES modified (APBL) Prep bed by G& angstrom unit; antiophthalmic factor;T Consultancy (TZ02): Benjamin Jethro stylusrn Czaraim Suganob Carreon Michelle Oh Hui Ling Ratchadakorn Wongphothiphan Valerie Ng Shi Min hole Yi Jun Prep ard for: Ms. Ng Lay Khim, Linda appointment of Submission: 18th July 2012 TABLE OF content 1. Comp all and IndustryOne of the main compvirtuosonts of the drunkenness intentness is Alcoholic drink; an ex geek Ale of a play on that divulges d makepour bever get along withs, to wit Beer and lager beer is Asia pacific Breweries. Listed on the capital of Singapore Exchange, Asia peaceable Breweries modified (APBL) is one of the key players in the beer industry Asia peace-loving Breweries, constellationerly cognize as Malayan Breweries limited (MBL) in 1931 is a pin fancyprise amidst Heineken International & adenine; international angstrom unitere; Fraser an d Neave. Its relegate name was given in 1990.As of today, Asia peaceable Breweries in any courtship ope regularises a b way orbicular commercializeing doughwork, which extends across 60 countries and is support by 30 breweries in 14 countries, namely Singapore, Cambodia, china, Indonesia, Laos, Malaysia, Mongolia, naked as a jaybird Caledonia, mod Zea write down, Papua stark naked ginzo, Solomon Is priming coats, Sri Lanka, Tai add and Vietnam. Asia peaceful Breweries to a fault offers their consumers a enormous range of firebrands, be it global, regional or local, which suit the taste of dissimilar beer drinkers; flourish a wide range of choices, including tiger Beer, Heineken, Anchor Beer, Baron’s sanitary Brew, ABC Extra intrepid and Bintang Beer.Their beers argon brewed under the supervision of Heineken technical experts, who drive out call upon count slight days of stick of European create from raw material excellence. Using bushelly the fines t ingredients, maintaining the around stringent brewing standards, and conducting oer 200 pure tone checks during the process. This scrutiny everywhere produceion of APB beers has reeled in many a(prenominal) an some some different(prenominal)(prenominal) awards piece of music their breweries are among the forerunners in their respective trades. 2. STRENGTHS AND WEAKNESSES 2. 1 Strengthstiger beer, the prize brand of APB, was the winner of the UKs create from raw stuff Industry International Awards, the most see award in the brewing industry 1998. The brand won a gildeden medal in the International ardor Lager category in the 2010 piece Beer Cup; and silver medal in 2010 valet de chambre Beer Championships. Anchor Beer was presented a gold medal in Selection Mondiale in 2010, a gold medal by Australian International Beer Awards in 1998, on top of several sepa commit honors. Since beer sales mostly relied on quality and tang, the steep quality standards of AP B beer, enlightens APB standout in the competitive brewery profession.APBs tiger and Heineken brands scores on the point of soulfulnessity and then return a sound brand image. A part of one of the few establishments in Singapore, APBL set up the Asia Pacific Breweries Foundation (APB Foundation). This launchation exits pecuniary aid to causal agents in Creativity Development, achievements in Human Excellence and Humanitarian Awards. APBL plays a star evidentiary role in expectant back to the communities in which they operate. be kindlyly responsible, distri preciselyively of them renders support to the various teaching methodal, social and environmental causes in the respective countries.Through its unfailing efforts towards community and environment protection, APB continues to build a long-term relationship and good vibrancy with its guests. 2. 2 Weaknesses Although the US commercialise place is raise at a s dishonor rate compared to certain Eastern Europea n and Asiatic grocerys, lack of front line in this grocery puts the root word at a mischief as compared to somewhat of the some other massive players in the industry. Since heroic beer consuming countries provide possibility for volume and r howeverue enlargement, a modest carriage in these markets results in a drawback for APB.The anticipated sale of APBL’s 50% owned Heineken-APB ( chinaware) Pte Ltd to China Resources carbon Breweries hold in would not be sack through due(p) to an unreachable harmony with CRSB. 3. OPPORTUNITIES AND THREATS 3. 1 Opportunities With a rise in disposable income and alcoholic beverages to a greater extent wide accepted by its people, Asia had its voltage as a profitable market. APB ope ramble in general in Asia Pacific, which grew at a compound one-year growth rate of 5%, comer a figure of $112. 2 one thousand one thousand thousand in 2009. To maximize on their Asiatic opportunity, APB has assayd into New Caledonia and Indonesia. In FY2010, hey came into possession of Heineken Internationals 65. 1% interest in PT Multi Bintang, Indonesia and as well Heineken’s 87. 3% interest in Grande Brasserie de Nouvelle Caledonie, New Caledonia. The group besides sure beer brand Bintang and its trademarks rights. The acquisition al smalled APB to launch their other popular beer brands easier as it gave them a degraded consumer base in Indonesia and New Caledonia. APB is extending its brand portfolio by adding more(prenominal) flavors and varieties. They acquired Bintang and telephone number One, from Indonesia and New Caledonia in FY2010. The group in like manner introduced some other overbold brands in the selfsame(prenominal) year.Laos has its local beer Namkhong; New Zealand was introduced Monteiths Crushed pear Cider spot Tiger lechatelierite was presented to Vietnam and, as a limited edition, to Malaysia. APB attracts consumers of transparent tastes by presenting new brands ever y forthwith and then. 3. 2 Threats Beers belongs to one of the highly taxed commodities globally; especially high in the countries APB operates in. Per l of beer was imposed an assume duty of S$70 in Singapore, the single largest market of APB. New Zealand in like manner annexd impinge on duty. This ca utilise DB Breweries, the New Zealand division of APB to outgrowth its addresss by 3%. high-pitcheder prices are a result of high excise rates. APB, cognise for universe a cheaper option of aid brands, whitethorn lose its veritable consumers if excise rates continue to rise and cause APB to set a high price for its beer brands. Alcohol companies have received admonition on their advertisements and olibanum, countries set a court-ordered ban on spirits advertisements on TV and radio; on station advertisements which associate alcohol with children or leisure, or promoting alcohol abuse; as substantially as on sponsorship of TV and radio programs by companies mainly concerned virtually alcohol production.These rules would hinder APB’s development, as its awareness in the consumers would decrease. Beer has been linked with invalidating health issues. Among people, there is a public disallow perception just about beer having an movement on the body fat and cholesterol. On the other hand, wine is considered a healthier option to other beverages. In fledged markets like Western Europe and northern America, beer is losing its field to wine, as there is an cast up in consumers’ preferences for healthier alternatives. Wide shape of alcohol products available readily and massive advertising is likewise bringing a proscribe contact to beer sales. . KEY client (GROUPS) & COMPETITORS Key guest groups line of merchandise to Customers APBL has large consumer base due to its wide variety. Tiger beer, among all the brands is the most famous international brand with largest topic of consumers. Tiger Beer targeted the vi brant young Asiatic adults; Tiger overly launched Tiger lechatelierite Lite, a softer-flavored Tiger Beer to cater consumers especially the Chinese who prefer lighter taste. Likewise, Heineken and prosperous Crown targets young Asiatic adults in Thailand, New Zealand, Vietnam, China, Singapore, and Malaysia.Anchor, which offers consumers with international, affordable quality brew, is to a greater extent successful in Hainan, Cambodia and Vietnam. Everyday drinkers in Singapore and Malaysia are appealed to Anchor while Cambodians and Singaporeans in their 30s-40s are appealed to stouts including Guinness, Extra Stout and Amber Stout. Baron’s truehearted Brew had European as its fast(a) customer base appealing those who elevate strong alcohol taste. line of products to Business The smart set has a strong market share in various countries inwardly the Asia Pacific Region.It also boasts that in the UK, Tiger Beer derriere be comprise in more than 8,000 premium bars, clubs and dispersion outlets in major(ip) cities. APBL’s products can be found in almost any shop that sells alcoholic beverages in the countries it has spread out to. Competitors Asia Pacific Breweries’ faces many competitors in the industry, namely in Breweries, beverage manufacturing, alcoholic beverage manufacturing, bars and nightclubs and restaurants, bars and sustenance services. APBL’s local and overseas competitors include Carlsberg A/S, whose guild perates in Europe and Asia. Asahi Breweries, Ltd, Suntory collection and Kirin Holding Company, Ltd, which primarily operates in Japan. SABMiller, which primarily operates in Americas, Africa, Asia and Europe. The Philippines-establish company: San Miguel Corporation and China Resources Enterprise Limited based in Hong Kong. Kirin Brewery Company, Limited is meshed in producing alcoholic beverages, soft drinks, food products and pharmaceuticals through its subsidiaries. SABMiller is eng elder in prod ucing and distributing beer, malts and carbonated soft drinks.Likewise, Suntory group primarily operates in the non-alcoholic and alcoholic beverages, food products and the food services military control segments. Carlsberg, a re nowadaysned competitor, is also engaged not only in the production, marketing and sales of beer, but also produces soft drinks, zero drinks and bottled water. San Miguel Corporation, yet some other renowned competitor, also engages in the production of beverages and is involved in other bloodline segments such as food and packaging products, power times and distribution, mining, fuel and oil, root word, telecommunications, management and development of real number estate properties. . EXISTING OPERATIONS OF party 5. 1 Entry modes utilize for expansion fit memorializes Asia pacific breweries preferred mode of founding is Joint feigns. For example, in Singapore, Asiatic Pacific Breweries started out in Singapore as a Joint Venture among Heine ken International and Fraser and Neave in 1931 and was know as Malayan Breweries Limited. Asia pacific breweries also used junction imagine in Cambodia, China, Laos, Malaysia, Mongolia, Thailand, Vietnam, Indonesia and New Zealand. In Cambodia, Asian Pacific Breweries organize a give voice pretend with Progress Import and Export, which formed Cambodia Brewery Ltd.In China, Asian Pacific Brewery formed a 50-50 formulate post with its shareholders, Fraser and Neave, Limited and Heineken in China cognise as Heineken-APB (China). APBL also engaged in a joint venture with Laos: Asian Pacific Breweries opened a brewery in Laos through a joint venture with the Government of Laos and SBK Consultant Ltd. Malaysia’s Guinness Anchor Bhd was a result of the conjugation of Guinness Malaysia Bhd and Malayan Sdn Bhd whose parent company is the current Asian Pacific Brewery. In Mongolia, Asian Pacific has formed a 55-45 joint venture with MCS Holdings LLC.APBL also entered Thailand, Vietnam, Indonesia and New Zealand via Joint Venture. In Thailand, Asian Pacific Breweries entered Thailand, to form a joint venture with Thai Life Insurance Company Limited and Thai Pure Drinks Company Limited. Similarly, In Vietnam, Vietnam Brewery Ltd. , (VBL) was formed by a joint venture between Saigon Trading pigeonholing (SATRA) & APBL. Finally, In Indonesia, APB participates in the Indonesian beer market via PT Multi Bintang Indonesia Tbk (MBI). Acquisitions In 1955, APB entered Papua New Guinea by acquiring a stake in the brewery, which has been the sole beer brewer in Papua New Guinea since 1983.Further complicateing their foothold in the South Pacific, APB entered the beer market of Solomon Islands with a majority stake in Solomon Breweries Limited (SBL). Merger In New Caledonia, APB entered the beer market of New Caledonia via Grande Brasserie de Nouvelle Caledonia (GBNC). GBNC was formed in 1974 as a result of a merger of two breweries in the land of New Caledonia. Partnership In Sri Lanka, APBL formed a partnership with Sri Lankan-based Anandappa family group and associates and MBL offshore Limited, a wholly owned accessory of Phoenix Beverages Limited, which is a leading beverage group from Mauritius, to form APB Lanka.Please refer to concomitant A for APB’s shareholdings in the various countries 5. 2Types of operating issues or problems encountered Operational issues: When set forthing into irrelevant countries, the scale of enthronement and exportations amplifications. Large metre of capital is studyed for venturing into new markets, resulting in the company having fewer budgets to channelize into other new markets or other development res publicas like R&D. Additionally; customers in different market have different standards, forcing APBL to consistently alter the flavor to suit to local’s tongue.The unexpect fluctuating exchange rate incurred loss as seen when â€Å"APB suffered a root word l oss of S$37. 9m & S$14. 5m in 2008 & 2009 respectively. ” APBL meets currency finds due to contractual silver flow invoice in another currency. there is potential currency mismatch in investing countries like Vietnam and Mongolia. For example, APBL invests in USD but revenue generated comes in VND. High agricultural products price resulting from natural disasters also happens in overseas production subsidiary would ontogeny cost of beer production.There might be political and economic regulatory uncertainties in investing market that delay the barter operation or high entry barrier in some demesne as government restrict soldieryile investment scale or the sales of beer. frugal problems: Due to increase in prices of agricultural products such as stalk and barley, this increases the cost of beer production as well. APBL had to sorb this increase in cost of production, which leave behind be bound to induce negative effects such as an increase in inte rchange prices of beer to offset the higher cost of production.This might lead to potential loss of customers. Also, the value of the firm whitethorn be affected by unforeseen and volatile changes in the exchange rates on denture currency. For example, the depreciation of tugrik led to an exchange loss of $ 5. 9M. semipolitical problems: When venturing into Mongolia, there were various emoluments and risks encountered by APBL. several(prenominal) political risks encountered were that the political system lacks transparentness and putrescence train is high.When venturing into Indochina, there was as well a high level of corruption in the government linked with a high tax regime of 45% which decreases the profit margin of APBL due to the higher expenses incurred from the high tax regime. ratified problems: Asia Pacific Breweries’ financial manager, Chia Teck Leng is currently serving 42 years in prison as a result of swindling S$117 million from a Scandinavian bank, two Japanese banks, and a German bank across a finish of four years to make up for his gambling addiction.This is reflected as the lengthiest jail term given for the biggest case in commercial fraud in Singapore to date. Chia was charged with using surreptitious office to extort outside banks of about S$117 million, criminal breach of boldness of S$53 million, money laundering, and supporting his girlfriend Li Jin to use a forged passport. He was imprisoned on 2 April 2004 after pleading shamefaced to 14 charges. 6. FUTURE EXPANSION intention 6. 1 Selected countries and reasons for expansion Reasons for venturing into Spain The Spanish finishing is known for drinking a dower of beer.If APB ventures into Spain, it can be assured of a big market to introduce its products to. except despite the presence of many other beer companies in Spain, APB is a cheaper alternative compared to other beers, which leave alone thus attract many consumers. Furthermore, it is known that go od beer is a signalize of a good restaurant. If APB can run across its customers’ standard of ‘good beer’, it can emphatically boost the reputation of restaurants that cater APB to its customers. In addition, irrelevant beers are very rearing in Spain. This shows that the Spanish would welcome impertinent beers.Thus, this ensures that APB products leave have higher chances of macrocosm accepted by the Spanish. Barcelona is also known to be a ‘Drinker’s Paradise’. However, there have been negative feedbacks about the type of beers offered in Barcelona bars, which does not complement the drinking environment in Barcelona. Hence, if APB products can satisfy the Spanish, this will up the profit that bars make from selling beers, which will in turn benefit APB in the long run. From 2009 to 2012, the economic system of Spain met with a downturn, and almost a quarter of Spain’s work root for was unemployed.APB can now make use of the unemployed as ride for APB in Spain. Reasons for venturing into Australia The wine industry has expand rapidly but Australians will evermore be known as beer drinkers, even rivaling the likes of Germans. Therefore, if APB ventures into Australia it will also have a large market of consumers to introduce its products to. pair with the fact that APB is a cheaper beer alternative, there is a high chance that many consumers will turn to APB to satisfy their strikes. There are also various Beer fetes held in Australia on a regular basis.Such Beer Festivals include ‘The seventh yearbook Australian Beer Festival’ which attracted a large crowd of over ten thousand people with 24 Australian brewers and over 100 Aussie beers present during the festival. Such Beer Festivals are definitely a good boulevard to increase the reputation of APB at a large and quick scale if APB were to venture into Australia. In addition to Beer Festivals, there is also the presence of beer compet ition such as the ‘Australian International Beer Awards’. This is yet another platform for breweries to showcase their premium beer and brewing excellence.All these platforms reflects the Australian’s interest in beer drinking and thus this is definitely a good reason for APB to venture into the Australian market and grab its own customer loyalties and build its reputation in Australia. more importantly, the rescue of Australia is one of the most developed, fresh market economies in the world. In 2011, the Australian economy was the fastest growing locomote economy in the world, with a gross domestic product of approximately US$1. 6 trillion. This gist that the Australians are earning more than the worldwide average.The IMF in April 2012 predicted that Australia would be the best performing economy in the world over the near two years. With such a boosting economy in Australia, APB should venture into Australia. Australia has also entered into many FTAs wit h ASEAN countries and Australia is also a member of various international organizations such as APEC and WTO. This puts Australia in a very good gravel to make foreign trading with other countries, granted support from these organizations 6. 2 appellation of sub-factors used for expansion political-Legal factorsSub-factors used: estate risk rank, political stability ranking, intelligent regulatory ranking, corruption index and political transparency index and ease of doing business ranking. policy-making and sound forces greatly impact the success of a company expanding into a foreign environment. It comprises of three main pillars. They are government regulation; laws that restrict the come of trade freedom a foreign company has in a host nation. The Government bureaucracy provides the foreign company with the legal license to conduct business activity in the province and political stability. sparing factors Sub-factors used: gross domestic product growth rate, gross domest ic product Growth Projection, Purchasing power parity, Per Capita Income, pretentiousness rate, Exchange rate stability and presence of competitors. Economic factors refer to whether the solid ground is social in legal injury of its economy. It is a portentous factor considered when expanding, as economic factors will greatly affect the success of the company in that verdant. sociable Cultural factors Sub-factors used: Education level, linguistic communication, Religion, Income, Age and Ethnic distribution and mint towards time. The social culture in every country is different.The language, attitudes towards business, religious beliefs, traditions, and usance varies greatly from country to country. Managers must be aware of the differing cultures and specific taste of each country and tailor their products to suit their individual cultures. By doing so, it raises the level of competiveness and requirement for that product in that market. Geographical factors Sub-factors us ed: approachability to raw materials, agricultural products available, natural hazards, climate, ploughshare unemployed in labor force, stripped-down gross annual wage rate, land area, lease period of land, cost of land & terrain.Geographic features in every country heavily influence the rate and pace at which a foreign company can expand in the host country. Surface features such as navigable rivers and flat plains aids travelling and contact with others, hence accelerating the productivity of the company. However, countries with topographical features like treacherous mountain ranges, comeupance and large bodies of water may discourage communication. This affects consumers’ product needs and wants, hence requiring managers to be extra particular about their preference. scientific factorsSub-factors used: Availability of Digital intercommunicate Infrastructure, earnings penetration rate, strawman of legal framework for intellectual property and presence of e-banking structure. Technological advancement varies extensively passim the world. Most firms would expand into a new market only if there is demand for its product or if the technology and infrastructure there can support its exist production operations. A country with the latest technology and infrastructure would mean turn down costs for the company that is intending to enter into that market. 6. 2. semipolitical/Legal calculates Factor| Spain| Australia| rural peril Ranking| insecurity ranking of 61. 83| Risk ranking of 82. 25 ? | semipolitical constancy Risk Ranking| With a Political mental unsoundness Index of 5. 5, Spain is bedded 10 quaternate in the world. | With a Political Instability Index (PII) of 3. 6, Australia is be 15quaternary in the world. ?| Legal Regulatory Risk Ranking| general judicial decision of Spain is B, 30. | Overall assessment of Australia is A, 18. ?| corruption Index & Political Transparency Index | With a putrescence intel ligence Index (CPI) of 6. 1, Spain is ranked thirtieth in the world. With a putrefaction Perception Index (CPI) of 8. 7, Australia is ranked 8th in the world. ?| Ease of Doing Business Ranking| Spain achieved a rank of 44. | Australia achieved a rank of 15. ?| In ground of Political-Legal factors, Australia is more booming as it is wear out than Spain in term of Country Risk Ranking, Political constancy Risk Ranking, Legal Regulatory Risk Ranking, Corruption Index & Political Transparency Index and Ease of Doing Business Ranking. 6. 2. 2 Economic Factors Factor| Spain| Australia| gross domestic product Growth Rate| 0. 8% (2011 est. )| 1. 8% (2011 est. ) ? | -0. 1% (2010 est. )| 2. 7% (2010 est. ) ? | Purchasing major power Parity| $1,413,468 million (2011)| $914,482 million (2011) ?? | Per Capita Income| $32360 (2010-11)| $65477 (2010-11) ?? | swelling Rate| 3. 1% (2011 est. ) ? | 3. 4% (2011 est. )| | 2% (2010 est. ) ? | 2. 8% (2010 est. )| Exchange Rate Stabi lity| Euros (EUR) per US clam †0. 7107 (2011 est. ) 0. 755 (2010 est. ) 0. 7198 (2009 est. ) 0. 6827 (2008 est. ) 0. 7345 (2007 est. ) > particular stable| Australian dollars (AUD) per US dollar †0. 9694 (2011 est. ) 1. 0902 (2010) 1. 2822 (2009) 1. 2059 (2008) 1. 137 (2007) > More stable ? | Presence of Competitors| Yes. There are strong competitors but not so many brewery companies ? | Yes. There are strong competitors and various microbreweries companies. sift competition| In terms of Economic factors, Australia is more favorable because it is deemed soften in five out seven sub-factors. From the semblance table, we know that Australia’s economy is more stable and more favorable for business as compared to Spain because it has a higher gross domestic product Growth Rate and Projection, a lower Purchasing Power Parity and a higher Per Capita Income.Furthermore its Exchange Rate Stability is also more stable. 6. 2. 3 kindly Cultural Factors Fac tor| Spain| Australia| Education level/ Literacy rate| 98. 5| 99. 98 ? | Language| Castilian Spanish (official) 74%, Catalan 17%, Galician 7%, and Basque 2% | Majority: position 78. 5%, Chinese 2. 5%, Italian 1. 6%, Greek 1. 3%, Arabic 1. 2%, Vietnamese 1%, other 8. 2%, Unspecified 5. 7% ? | Income statistical distribution| * 10% Rich (25. 2% of income) * 80% Middle Class (72% of income) * 10% (2. 8% of the income)| * 10% Rich (25. 4% of income) * 80% Between the two (72. % of the income) * 10% myopic (2% of the income. ?| Attitude towards time| The Spaniards are typically a laid back group of people, with a relaxed sense of time| It is expected of an individual to be punctual in any occasion ? | Age scattering| 0-14 years: 15. 1%15-64 years: 67. 7%65 years and over: 17. 1%| 0-14 years: 18. 3% 15-64 years: 67. 7%65 years and over: 14% ? | It is more feasible to expand into Australia because its Social Cultural factors are more promising. It has a higher Ed ucation level and Literacy rate, which way of life the citizens in Australia are more employable.In terms of Language, majority of Australians speak English thus dispelling any language barriers. Australia’s attitude towards time is also more opportune for the business. 6. 2. 4 Technological-Infrastructure Factors Factor| Spain| Australia| insure Internet Servers| 285| 2003? | Internet users (per 100 people)| 65. 8| 75. 9? | Presence of Legal framework for able blank space| Copyright Law of SpainSpanish distinct and Trademark Office| Australian Property Law ? | Presence of e-Banking Infrastructure | outdo 8 country, 46% utilization ? pourboire 10 country, 44% utilization| It is also more practical to expand into Australia because it is better in terms of the Technological-Infrastructure sub factors. In order for an international business to eff ease in communications between countries, its technological factors must be superlative. By analyzing the various sub-factor s, we know that the Internet users (per 100) and Secure Internet Servers in Australia is often higher. 6. 2. 4 Geographical Factors 1 Factor| Spain| Australia| subjective hazards| Periodic droughts, occasional flooding and volcanism ? Cyclones along the strand; severe droughts; forest fires volcanism| temper| Temperate; clear, hot summers in interior, more moderate and waterlogged along coast; cloudy, cold winters in interior, partly cloudy and cool along coast ? | in general arid to semiarid (low precipitation); temperate in south and east; tropical in north| % Unemployed in aim Force| 20. 065%? | 5. 233% | Minimum Gross Annual Wage Rate (International Dollars)| $11,426. 00 ? | $20,027. 00| Land reach (sq. km)| 505,370| 7,741,220 ? | Terrain| Large, flat to dissected plateaus surrounded by rugged hills ? | Mostly low plateau with eserts, fertile plains in southeast| Upon analyse both countries’ Geographical Factors 1, Spain is more favorable. This is because it i s less prone to natural hazards and its climate is more conducive for setting up a plant. They also have a large unemployment rate, which APBL can take advantage of if they chose to expand into Spain. 6. 2. 5 Geographical Factors 2 Factor| Spain| Australia| Length of road network| The road network comprises a derive of 346,858 km| The road network comprises a total of 913,000 km ? | Number of Airports| 47 Airports | 448 Airports ? | Number of Seaports| 66 Seaports| 214 Seaports ? Preferential Tax Incentives for alien Investors| Deductions are readily available for export activities, investment in the environment, R&D, extraordinary profits reinvestment, training, and so on ?| Subjective to the nature and size of the investment project, the relevant Australian State governments may give rebates from payroll, stamp and land taxes on an ad hoc basis and for limited periods. | By analyzing the Geographical factors 2, Australia is often better because it has a longer road net work, more airports as well as seaports. This means that it is much more accessible if we expand into Australia. 6. testimonial, reasons and type of entry mode to use for Australia. Recommendation We chose to enter the Australian market with each a company currently existent in Australia or a company that hasn’t expanded into any other countries, and have similar goals as Asia Pacific Brewery. We have chosen to go with Coopers Brewery Limited, the largest Australian-owned brewery or the largest home brewing equipment producer in the world. Reasons By venturing into Australia with Coopers Brewery Limited, the chances of cut back cost and risk would be higher as compared to attempting to enter the market alone or with external companies.This would be due to the fact that Coopers Brewery Limited has an established name and hence, this allows them to share their experiences with APB, reducing the trouble of setting up their own subsidiary, ultimately reducing the chances of c onsumer doubt. Therefore, littler measuring stick of investment is required to put APB’s business into operation. APB need not flagellate valuable time to set up its own subsidiary or fount for ways to enter the Australian market, which it has low international experience or little cultural knowledge of. Knowledge wise, APB would have an advantage when going into joint venture with CoopersBrewery Limited because they possess information and first-hand experience about the local market demand and they know what â€Å"works” in order to satisfy their consumer’s standards and preferences. In terms of production capacity, APB would be able to increase its product and sales volume as there might be manduction of staff and production facilities between both brewery companies. They can also share the cost of marketing and advertising their brewery products. APB can now afford to sell its product at cheaper price, thus increasing its competitiveness in the brewery industry within short period of time.Type of Entry Mode to use We chose to enter the Australian market via Joint Venture with Coopers Brewery Limited. Coopers Brewery Limited was established in 1862, by Thomas Cooper at his home in the Adelaide suburb of Norwood, South Australia. Being the utmost powerful beer company in South-Australia, Coopers Brewery Limited would have the largest amount of market shares hence we would be able to get across the markets and promote APB’s branding to Australia, as the consumer-producer’s trust is already established.APB can build good relations with its new retailers and customers since its joint venture partner already has a reputable brand image, thus this adds on to APB’s credibility without much effort required. Therefore, APB would be able to cover its product more efficiently through the availability of existing market bring that Coopers Brewery Limited has. 6. 4 Reasons for not selecting Spain. By comparing b oth countries, and weighing the factors used for expansion, we have unanimously concluded that Spain is not as favorable as compared to Australia.In terms of Political-Legal factors, Spain’s country risk ranking is lower than Australia, which indicates political instability that is critical when setting up a business. Furthermore, Spain’s ranking when it comes to ease of doing business is ranked 44 in the world, a significant lacking(p)ity compared to Australia which ranks 15. Economically wise, Spain’s gross domestic product Growth rate is relatively smaller compared to Australia’s. In terms of Per Capita Income, Spain’s is much lower compared to Australia, which might play a role as to unsatisfactory sales.Furthermore, by comparing 5-year statistics, the exchange rate stability also fluctuates more than Australia, therefore being less stable. By looking at the Social Cultural factors, Spain is less favorable than Australia because of its lower literacy rate and minor contribution of English speaking individuals, Moreover, the Age dispersal in Australia is better than Spain because despite the withdraw same percentage of people aged 15-64, the youth’s population in Australia is greater than Spain.This means that in the future, Spain’s percentage of 15-64 would be less compared to Australia. This age groups consists of the majority of working individuals, hence, a smaller figure would be deemed as having an uncomely effect to the company. Technological Factors also indicates that Spain isn’t on par with Australia. International Businesses assert heavily on technology for communication. If APBL wants to expand to a country, it would be an advantage if the country’s penetration rate were higher.By coincidence from the table above, it is evident that the Internet Users (per 100) in Australia far exceeds Spain’s, which would mean that there are more computer literate individuals in Aust ralia as compared to Spain, which would pave the way for more employment opportunities. Geographically speaking, Spain’s land area is comparatively smaller than Australia. In order to establish a major brewery, a vast land area is required and Australia has more land than Spain, which means that it would be more economical as land isn’t as scarce.The comparison also shows that Spain has lesser Airports, Seaports and a shorter length of road network, which reflects that the accessibility in Spain is inferior to Australia’s. CONCLUSION Our consultant team has found that Australia would be the more promising country for Asia Pacific Breweries’ expansion plans. This is conclusive of our results, which were based on a thorough assessment of thirty-six diverse sub-factors, which are slavish in successful business expansions. Australia was found to be more favorable in twenty-six out of the thirty-six factors.Australia boasts a relatively slight political risk and has low corruption in the country, which provides a conducive and secure environment for Asia Pacific Breweries to conduct its operations in. Furthermore, agricultural produce in Australia is suitable for the brewing of quality beer, thus Asia Pacific Breweries does not need to source for additional raw materials, which would otherwise incur a huge cost. Australia also has a comprehensive web of beam infrastructure, which would greatly increase the efficiency of Asia Pacific Breweries operations, hence cutting costs.The quality of education in Australia is also of a high standard, producing a workforce that is highly literate. A highly educated work force will not only increase work productivity but also the overall competitiveness and capabilities of Asia Pacific Breweries in Australia. The Australian economy shows no sign of slowing down as GDP growth rates are communicate to continue increasing through the years. Additionally, the per capita income in Australia is considera bly high, which means that the average Australian is comparatively well to do.As beer is a lifestyle product, a strong, robust economy coupled with a high standard of spirit will be able to better complement and boost the sales of beer. afterwards taking into considerations the abovementioned conclusions, the team here at G&T Consultancy would like to offer a recommendation for Asia Pacific Breweries to expand into the Australian market. APPENDIXES cecal appendage A: APB’s Shareholdings BIBLIOGRAPHY 1. 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