The Espresso

Lane to Global
Markets
Illys coffee-shop concept:
Espressamente

Welcome to Illy!

A miracle of chemistry in a cup

Reputation: Quality - Taste - Experience - World renowned
Espressamente is Illys own franchised coffee bar with 200 locations in
20 countries.
Goal: To be recognized as the only authentic Italian Coffee Bar Chain
that delivers superior customer satisfaction globally, with a truly
authentic taste from the heart of Italy!

Illy ~ Espressamente SWOT

BRAZIL
C: Largest coffee grower. Consumption
increasing. Long term Orientation
A: 126/183 ease of doing business
G: Far from Italy. 5th largest density
starbucks in million population
E: Larger wealthier middle class.

CHINA
C: Long term orientation
A: Hard to do business for foreign
companies
G: Far from Italy. 4th highest starbucks
population per million
E: Larger middle class, demand for high
quality beverage products

GERMANY
C: Popularity in speciality coffee
culture. Sophisticated. Low long term
orientation
A: 20th, ease of doing business. High
investment on R&D and Innovation.
G: Close to Italy. 3rd highest starbucks
population per million
E: High GDP per capita.

UNITED KINGDOM
C: Low long term orientation; Shift from
tea culture to coffee culture
A: One of the easiest places to franchise,
Ease for foreign investors
G: Close to Italy. 2nd highest density of
starbucks per million people.
E: Recent growth of 6% remained stable

INDIA
C: High long term orientation
A: 132/183 ease of doing business
G: No starbucks. Far from Italy
E: 2nd fastest growing economy in the
world, growing middle class

UNITED STATES
C: Low long term orientation, Customers
difficult to satisfy: Retail experience, WIFI,
product innovation, health trends
A: Rank 4 in ease of doing business
G: Far from Italy. Highest density of
starbucks per million people.
E: Ranked 1 in coffee consumption(25%)

JAPAN
C: High long term orientation. Less alcohol
consumption More growth opportunity
for hot beverages
A: 20/183 for ease of doing business
G: Tokyo, is approximately 6,138
kilometers away from Rome, Italy >>>
Difficult to franchise
E: Ranked 3 as coffee importer;

GE Matrix

BCG Matrix

What criteria do we use in order to

prioritise entry into
foreign
markets?
Coffee Consumption
(per capita)
Income per capita for top 10% of the population
Disposable income trends for middle class
Growth rate of the coffee sector in the country
Economic growth rate
Coffee Culture/Acceptability of specialty flavours
Competitive presence/dominance
Illys Brand impact on potential consumers
Ease of Doing Business rank

To invest or not to invest?

1. Brazil
2. China
3. Germany
4. UK
5. India

6. USA
7. Japan

Modes of Entry by country

C
o
u Br
n azi
t
l
r
y
M
o
d
e
o
f
e
n
t
r
y

Joi
nt
ve
nt
ur
e
pa
rtn
er
shi
ps
M
ast
er

Ch
in
a

Joi
nt
Ve
nt
ur
es

Ge
rm
an
y

Dir
ect
Fr
an
chi
sin
g

U.
K

M
ast
er/
Ar
ea
Fr
an
chi
sin
g

In
di
a

M
ast
er/
Ar
ea
/
Se
qu
en
tial
Fr
an
chi
sin

U.
S

Dir
ect
Fr
an
chi
sin
g

Ja
pa
n

Pa
rtn
er
shi
ps
Joi
nt
Ve
nt
ur
es

What are the relevant

environmental variables that
1. Social
should
impact the decision?
- openness to foreign brands
- Importance of business relations in dealings
- regional and cultural differences within a country

2. Political/ Legal
- Ease of foreign companies entering the market i.e. China
- Laws governing owning of land and licensing
- Stability of political environment
- Associations governing entry into markets i.e. The German Franchise
Association

What are the relevant

environmental variables that
3. Economic
should
impact the decision?
- Disposable income of consumers
- Competition from other local/ international brands

4. Technological
- Technological progress and potential

What are the relevant

organizational variables that
should
impact
theproducts
decision?
- Flexibility of organization
to redesign
and tweak brand image
when needed to fit with each type of market

- Communication channels to facilitate international expansion and dealing

with partners all around the world
- Trade orientation. Ensuring decisions made pave the way into successful
expansion into international markets

THE END