St. Rose College Educational Foundation Inc.

College of Business and Accountancy

Samput, Paniqui, Tarlac

CASE
STUDY
Submittted by:
Biado, Janna C.
Gonzales, George P.
Lacsamana, Joules N.

Mr. Alvin Manzon, MBA

Instructor
Company: ManZone Coffee Roasters (MCR)

Owner: Vince Manzon

Industry: Specialty Coffee

Background:

MCR is a New York-based coffee roaster known for its high-quality green bean, ethically
sourced beans and innovative brewing methods.

Having saturated the domestic market, MCR is considering international expansion. Their
initial target market is Japan, a country with a growing specialty coffee scene. However,
management is divided on the best approach.

Option 1: Exporting the Green Bean Experience MCR would continue roasting their signature
blends in New and export them directly to Japanese cafes and retailers.

 Advantages: Lower initial investment, maintains quality control.

 Disadvantages: Higher shipping costs, less control over pricing and brand image in
Japan.

Option 2: Partnering for Local Production (International Business Strategy & Corporate-
Level Strategy)

 MCR would partner with a local Japanese coffee roaster to establish a production facility
in Japan.
 Advantages: Lower shipping costs, potential for cultural adaptation of blends,
knowledge of local regulations.
 Disadvantages: Loss of some control over quality and brand, potential for profit sharing.

Option 3: Opening Green Bean Cafes in Japan (International Corporate-Level Strategy)

 MCR would establish a chain of Green Bean cafes throughout Japan.

 Advantages: Full control over brand experience and quality, direct interaction with
customers.
 Disadvantages: Highest initial investment, risk of failure in a new market, requires
significant management expertise.
Questions:

1. International Business Strategy: Analyze the advantages and disadvantages of

exporting pre-roasted coffee beans versus adapting the roasting process or coffee blends
for the Japanese market.

 As MCR considers its worldwide development into Japan, exporting pre-roasted coffee
beans and customizing the roasting method or coffee blends for the Japanese market
present distinct advantages as well as risks.

EXPORTING PRE-ROASTED COFFEE BEANS

Advantages:
Lower Initial Investment:
MCR can reduce the initial investment needed for exporting pre-roasted coffee beans to
another country because they can use their current roasting facilities in New York
without building new infrastructure in Japan.
Maintain Quality Control:
By roasting the beans in New York, MCR is assured that they can maintain the taste and
quality of their unique blends, upholding their reputation for high-quality products before
they export their products.

Disadvantages:
Increased Shipping Costs:
Exporting pre-roasted coffee beans in Japan may result in greater expenses for
transportation, which could have an effect on the operation's entire affordability and
pricing competitiveness in the Japanese market.
Less control Over Pricing and Brand Image:
In the absence of a local presence, MCR may find it difficult to maintain a strong brand
image and regulate product pricing in Japan, which could have an effect on consumer
perception and market positioning.

ADAPTING THE ROASTING PROCESS OR COFFEE BLENDS FOR THE

JAPANESE MARKET
Advantages:
Lower Shipping Costs:
Collaborating with a local Japanese coffee roaster or creating a manufacturing plant in
Japan can reduce shipping costs, increasing the overall profitability of the business.
Cultural Blend Adaptation:
Customizing the roasting method or coffee blends to Japanese preferences may increase
MCR's product appeal in the local market, which could lead to greater market popularity
and customer satisfaction.
Knowledge of Local laws:
Collaborating with a local partner provides MCR with important insights into Japanese
laws and market dynamics, which leads to more efficient operations and compliance.
 Disadvantages:
Loss of Some Control Over Brand and Quality:
MCR might encounter a partial loss of control over the brand as well as the quality of its
goods as a result of partnering with a local roaster. This may have an effect on
consistency and customer's impression of the brand.
Possibility of Profit Sharing:
Since MCR was going to offer their local partner a piece of their proceeds, there's a
chance that profit sharing will make them less profitable.

These two options both have their advantages and disadvantages, it is important to know
what are the pros and cons of their ideas before deciding which strategy is better. Also,
MCR should do market research in Japan to better understand consumer preferences,
competition, and market dynamics. In addition, utilizing local expertise through
partnerships or collaborations might increase the probability of success in the Japanese
specialty coffee market.

2. International Corporate-Level Strategy: If MCR decides to partner with a local

roaster, what type of corporate-level strategy (multidomestic, global, or transnational)
would this represent? Explain your reasoning.
 If an international company decides to work with a local group, the sort of corporate level
strategy that this cooperation symbolizes would likely be a transnational strategy. A
transnational strategy contains components of both multidomestic and global strategies,
attempting to attain global efficiency while being sensitive to local market demands. In
this instance, the worldwide corporation teaming with a local group demonstrates a
strategic strategy that combines the capabilities of both global operations and local
experience. By working with a local roster, the firm can benefit from the expertise of the
local market and cultural subtleties while yet having a worldwide presence and
maximizing operational efficiencies. This strategy allows the organization to respond to
local market conditions while simultaneously leveraging on economies of scale and
global synergies, making it a well-rounded approach that combines global reach with
local responsiveness.

3. Evaluation: Considering MCR's resources, industry, and target market, which option
seems most viable? Why? Are there any potential risks associated with this option?

 Given MCR's resources, industry position, and target market in Japan, partnering for
local production, appears to be a feasible expansion strategy. This option has different
advantages that are in line with MCR's goals and characteristics of the Japanese market.

Advantages of Partnering for Local Production:

Lower Shipping fees: By building a manufacturing facility in Japan, MCR may
reduce the shipping expenses involved with exporting roasted beans from New York.
Cultural Adaptation: Working with a local Japanese coffee roaster allows MCR to
customize their blends to local preferences, improving acceptance and appeal in the
 Japanese market.
Knowledge of Local regulations: Working with a local partner provides significant
knowledge into Japanese laws, leading to better compliance and smoother operations.

Potential Risks of Partnering for Local Production:

Loss of Control: Collaboration with a local partner may result in a loss of control over the
final product's quality and brand representation. Maintaining the quality and brand
integrity would be crucial.

Profit Sharing: Sharing profit with local partner can have an impact on MCR's overall
profitability in Japan. There should be a clear agreement between them regarding the
profit-sharing agreements before they start with the partnership.

Companies usually choose partnerships or joint ventures when expanding into new
market due to the difficulties of international operations and the need for local expertise.
MCR could benefit from creating strategic collaborations with respected Japanese coffee
roasters who share their dedication to quality and ethical sourcing. By combining MCR's
roasting and innovation expertise with the local partner's market knowledge, production
capacity, and marketing networks, MCR can develop a significant position in Japan's
specialty coffee market while reducing market entry risks.

4. Future Considerations: What additional factors (e.g., cultural differences, legal

environment) should MCR consider before making a final decision?

 1.Work Culture:
Understanding local work culture is crucial for effective human resource management.
Tailoring marketing strategies to local consumer behavior enhances customer
engagement and brand loyalty. Recognizing differences in communication styles,
including language barriers and non-verbal cues, improves business interactions.

2. Legal Environment
Familiarize with local laws on business operations, labor, taxation, and environmental
standards to ensure compliance and avoid legal issues. Understand local IP laws to
protect intellectual property and prevent infringements. Ensure contracts adhere to local
legal standards, including dispute resolution mechanisms.

3.Economic Environment:
Assess economic stability and growth prospects in the target market to mitigate risks
during downturns. Monitor currency exchange rates, especially for foreign transactions,
as fluctuations can affect profitability. Evaluate the cost of labor, materials, and
operational expenses to ensure alignment with the company's financial objectives.

4.Political Environment:
Political stability is essential as changes in government policies can affect business
operations. Understanding the political climate helps anticipate potential risks.
Additionally, tariffs, trade agreements, and import/export regulations impact the
feasibility and cost of doing business in new markets.

5. Technological Environment:
Assess technological infrastructure quality and availability, including internet
connectivity and transportation systems. Understand local market openness to new
technologies, which influences product adoption and market penetration strategies.