Global beauty made in Brazil Harvard Case Solution & Analysis

Global beauty made in Brazil Case Study Solution

Evaluate Natura’s current expansion options (in terms of regions where they are planning to expand): What are the best choices for its international growth? Why?

Natura is Brazil Origin Company. In 1982, Natura as per its global expansion strategy made its first attempt to expand outside Brazil and outsource distributor in Chile. The company always focuses on expansion of its business into different international markets and at present,it wants to expand its operations in United States, Mexico and Russia. Currently, US is one of the major market for the Natura as expansion into this market will increase the market share of the company.  In addition to this, Russia is also identified as fastest growing market that will provides benefits to the company in term of financial stability and growth if it expands its operation in Russia as well.

Mexico is also recognized as a potential market for the expansion as in long run it will give access to US market that will enhance the overall company’s performance. There are a lot of American companies in Mexico, and many of Mexican workers live and work in US. So this can be identified as an opportunity for Natura’s to expand its business operations in this market as it fulfills Natura’s global expansion strategy.

Natura’s will face many hurdles through the international expansion such as Russia contains huge counterfeiting and also it is competitive market that  will provides challenges to the company to survive and to differentiate itself from other competitors . Natura’s will have to enter this market through careful planning, research and adequate resources. Tough completion from international brands and market leader will also give tough time to Natura’s.

Natura’s wants to expand its operations into different international markets either by a partnership with the international companies who is aware of the local market and is operating since many years. But, by having a partnership with the local partner will have many drawbacks such as local partners will only know how to sell their products and they will lack completely Natura culture. Natura business model include direct selling through the sales consultant that is best in case of Natura as in order to retain and maintain the corporate culture and custom of direct selling.

The best choice available to Natura is to expand in a market where there is higher demand of its product and expand in countries where it can successful implement its business model and run as well as expand operation successfully.

Direct selling approach should be retained in long run and to enter into new market quickly, Natura will have to follow that particularly country norm sat initially basis in order to learn about the market and then should try to change the model slowly and gradually on the basis of its market observation.

Can they transfer their business model abroad? What are the major challenges for that? Should they change the model depending on where they operate?

Adapting business model in every country where it wants to expand will be practically challenged as it is not easy to transfer their business model effectively without understanding market trend. Direct selling is only possible when sufficient knowledge of the market is available. Each and every country have different norms and trend, so one policy does not fill at all. At initial Natura can operate by having a joint venture with the existing companies when Natura gain enough sufficient knowledge then it can implement and transfer the business model.

Major Challenges will include time to transfer the business model as transferring business model into new country will take time and also resources are required in order to train the staff and encourage them to adapt the model.

Adaptability is another issue. In such a market, it is a matter of time that whether the model will be adapted successfully or not. Failure of business model will cause huge financial loss to the company.

The competitor will be a major issue as they will impact the success of the company into international markets due to highly competitive environment. Secondly, there are many already established brands in these international markets that may serve as great challenge and barrier for the company to enter new markets globally.

If Natura remain busy in implementing its model and not focusing on ever changing market environment then Natura will be out of the market in no time. Corporate culture norms and business model take years and decades to implement to run successful. Therefore, Natura must understand and learn from its past experiences and should focus a mixed strategy in order to be successful in all markets........................

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