Situation Analysis : Industrial Players Essay

Decent Essays

1. Situation Analysis:
Industrial players:
Tea is considered as lighter and healthier beverage than coffee. As a result, market competition is high and already global Multi-national corporations like Coca-cola and Uniliver are there as market leaders. Matte Leao from Coca-cola and Lipton tea from AmBev are the direct competitors.
Industry revenue, size and growth:
Brazil is a politically stable country with booming economy which makes it perfect for foreign investment or joint venture. Brazilian population comprises of 67% middle class population with $12,100 per capita income of 202 million people with a consumption rate of 1.2 kg ppa makes it a huge potential market.
Market size for tea was USD 28.7 billion with growth rate of 13%. Market size was expected to grow to USD 50 billion by the end of 2014. Total size of organic beverages market USD 500 billion. Household penetration was less than 15% and others are 85%. Per capita consumption of tea is 1.2 KG.
Market attractiveness:
People of Brazil devote 14.8 hrs to leisure and personal care which can be considered as huge benefit. Moreover, people here are very adaptive to change. Convincing them to divert from a coffee consumption nation to tea won’t be an impossible task. Technological advancement and Internet advancement can be taken as added benefit.
High tariff duty can be a challenge to maintain the pricing strategy competitive as a new venture. Brazil’s average tariff is three times of US tariff.

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