Internalization: analysis of other markets

To justify our choise of the US, we have analyzed other potential entry markets for Ambro in Europe. We mainly looked at the population, purchasing power and area specific trends. These are the highlights:

Germany

• 80 million people (US Census Bureau)
• High purchasing power of 122 on the Eurostat Index. 
• Increasing gym subscriptions and increasing willingness to pay for health.
• Organic foods very popular in Germany 
• Germans purchase food and beverages on the basis of 'value for money'
• Translation ought to be outsourced and might be too costly
• However, German-speaking area larger when counting Austria (8 million) and Switzerland (German-speaking 74% out of 8 million), 

Nordics (Denmark, Sweden and  Norway)

• 20 million in population, far less substantial than Germany and the US 
• Very high purchasing power (196 for Norway as the highest, 125 for Denmark as the lowest)
• Less shipping costs due to geographical location (if produced in Finland)
• Growth potential for private label food products (Foodnavigator)
• Food culture of the 'Nordic Diet' which encourages healthy eating
• Families seldom eat together - could be potential for on-the-go foods
• Translation costs relatively high for a small number of potential customers in three different languages

United Kingdom

• 63 million in population which is quite substantial
• Moderate purchasing power of 110 on the Eurostat Index
• High growth of obesity indicate limited interest in a health food product
• More than 60% of the population have a negative and fatalistic attitude towards their own health
• No translations needed for the original product packages (in English)

Southern Europe (Spain, Portugal and Italy) + France

• 184 million in population 
• Low purchasing power, with France as the leader with 108 but others with less than 100 on the Eurostat Index
• Language barriers: level of English knowledge lower than in other possible target markets; all the materials need translating into multiple languages
• Strong dining culture which emphasizes home cooked meals
• Thus, this area has the least potential customers

Our research on other countries have enabled us to draw significant conclusions. Firstly, German-speaking area has enough of people in numbers, people have enough of purchasing power and preference for organic products. However, their 'value for money' attribute would indicate that in Germany, people generally don't want to pay too much for food. Still, Germany - due to its size and potential for healthy products - would be a good next market to target. Secondly, in the Nordics people are too few in number but on the other hand, the food culture leans heavily on healthy eating. Thus, Ambro could have potential. However, it doesn't make sense to enter this market before the sales volumes are high enough in other markets, due to the very small niche market of the Nordics.

Thirdly, obesity and lack of positive attitude towards health dominates the view of the UK consumers. However, Ambro targets a small niche market and this group of consumers could exist in the UK as well. Also, there are multiple other nationalities living in the UK, often in extremely busy jobs in the financial center of London. Also, entering the UK would not require translating. Thus, UK may serve some potential - even though the interest in health by the British majority is low. Fourthly, as for the Southern European countries, there are enough people but not enough money. Besides that, the strong Southern European dining culture, which places home cooked and eating together on a near holy level, would not celebrate the fast and simple solution that Ambro provides.

Even if some markets would prove potential, these findings further strengthens Ambro's number one choice of expanding its business towards the US. Stay posted and stay informed !

Sources:

Agriculture and Agri-Food Canada: http://www.gov.mb.ca/agriculture/statistics/agri-food/germany_health_environment_en.pdf
A Taste for Organic Food http://ourworld.unu.edu/en/a-taste-for-organic-food
Eurostat: GDP per capita in PPS: http://www.euromonitor.com/european-marketing-data-and-statistics-2014/book
Foodnavigator: http://www.foodnavigator.com/Financial-Industry/Euromonitor-highlights-Nordic-food-trends
Goethe Institutue: http://www.goethe.de/ges/mol/tre/glb/en2907049.htm
Kings Fund department of health: http://www.kingsfund.org.uk/time-to-think-differently/trends/healthy-behaviours
Public health England: http://www.noo.org.uk/NOO_about_obesity/trends
US Census Bureau http://www.census.gov/population/international/data/countryrank/rank.php
Yahoo Shine: http://shine.yahoo.com/healthy-living/the-new-nordic-diet-the-next-big-weight-loss-trend-2607925.html