This study aimed to supply in depth position of a state and market comparing which focuses on the beer industry in both Italy and Canada. It provides the reply to the chief inquiry which market we are traveling to put in and why we should put in that state.
This study besides focuses on the chief similarities and differences between both markets of Italy and Canada. By comparing those differences and similaritiesi??we will eventually acquire to the decision that which state we are traveling to put ini??and explicate the ground why we want to put in that state. There are several factors which we are traveling to utilize to compare these two countriesi??they are as follows:
The cultural differences by Hofstede ‘s cultural dimensions.
Beer industry conditions in both states.
Macro-economy state of affairss in both states.
Alcohol Taxes and Duties Legislative Framework.
Market size of legal imbibing and buying population.
Major participants in beer industry of both states.
Introduction
Beer is one of the most used drinks in the universe next to coffee and tea. The beer industry hence as we can conceive of is one of the biggest industries in the universe with many rivals inside of the industry. It is non surprising that many different sorts of beer and a assortment of trade names can be found in both Italy and Canadai??and both of the states has a long history of development of brewery industry every bit good.
In this articlei??we are traveling to compare both of the states ‘ marketsi??industry conditioni??cultural differencesi??political background and so forthi??all those information will be taken into considerationi??and be processed to do the concluding determination on which county environment is more suited and good for us to put into.
Some theories are traveling to be applied to analyze the cultural dimensions of both countriesi??such as Hofstede ‘s cultural dimensionsi??and SWOT analysisi??Porter ‘s Five Forces Model.
Methodology
What method do you utilize to roll up your factbook and why?
The methods i use to roll up my factbook is that I are traveling to use some models from respected writers that are most applicable to my chosen industry ( beer industry ) such as Hofstedei??SWOT analysis and Porter ‘s five forces.
What premier theory and attacks do you pull on and why?
Hofstede ‘s Cultural Dimensions
Hofstede measures the cultural dimensions differences in different states. There are five dimensions in this frameworki??namely the Power Distance Index ( PDI ) i??the Individualism-Collectivismi??Masculinity-Femininity and Uncertainty Avoidance. Since Hofstede measures cultural dimensionsi??therefore it will be used in the cultural system page of the paper when the cultural facets are discussed.
SWOT Analysis
SWOT is the abbreviation for Strengthsi??Weaknessesi??Opportunities and Threats. It is an analytical model to assist sum up in a speedy and concise manner the hazards and chances for a certain companyi??for my instance the beer industry in two different countriesi??Canada and Italy. The SWOT analysis looks into internal factors within the company/industry/country ( Strengths and Weaknesses ) and external factors outside the company/industry/country ( Opportunities and Threats ) . This method will finally assist us to look at the chief positivei?? ( strength and chances ) i??and the negativei?? ( failings and menaces ) i??sides of both states when comparing. Initially this should assist us make up one’s mind on which state would be most attractive to put in the beer industry. For this reasoni??this method will be used at the terminal of the paperi??which will give us an conclusive overview of the both states.
Porter ‘s Five Forces Model
Porter ‘s five forces theoretical account argues that there are five forces in an industry to find the extent and graduated table of the competition. These five forces affect the industries ‘ attraction. It is an efficient tool to analyze competition in the industry. In this modeli??five forces are the menace of replacement merchandises or servicesi??the menace of the entry of new competitorsi??the strength of competitory rivalryi??the dickering power of customersi??and the bargaining power of providers. The industry ‘s attraction is the primary and cardinal factor to make up one’s minding the profitabilityi??and in any industryi??the regulation of competition will be reflected in any of the five competitory forces. The intent of Porter ‘s five forces is to demo the attraction of the beer industry in both Canada and Italy and to assist investors make up one’s mind in which state to come in in the beer industryi??besides it could assist companies to develop a peculiar scheme in the industryi??and this theory might be used in chapter which deals with market / industry conditions.
What method of informations aggregation and analysis do you utilize and why?
The methods i use to roll up my informations are seeking my university ‘s library faculties for utile academic articles and utilizing a mix of articles from writers known through literature and the Theory Tutorials for my Comparative Country Studies class. Of coursei??the dependable information on Internet is besides consulted as extra sourcesi??and I have besides analyzed the one-year study of the company.
The beer industry of Italy and Canada
In this sectioni??relevant market conditions that apply to the Italian and Canadian beer sector will be explained. The market can be separated harmonizing to different factors like size and attraction every bit good. If we divide the market harmonizing the different market portions which individual brewery holdsi??we can see that there are several chief participant in the beer industry in both of the states.
Italy
Italy is celebrated for its winesi??howeveri??it is non well-known for its ain beer. By and large speakingi??Italy does n’t devour about every bit much beer as its European neighbouri??howeveri??there is a turning tendency of ingestion for beer in Italyi??the beer in Italy is non every bit widespread as in its European neighboursi??mainly because there is a historical penchant for vino in the state.
Italian breweries have undergone a “ Renaissance ” in recent old ages. In facti??only in the past few yearsi??Italy has started holding beer imbibing and savoring competitions and many related festivals. Normallyi??this kind of activity is reserved for winei??howeveri??nowadays beer is gaining more and more regard from wine-preferred Italiansi??and even many immature Italians prefer to back up their state ‘s beer industry instead than the vino industry nowi??stilli??the Italian beer industry has much infinite to turn and be developed.
There are some trade names of beer in Italyi??one of the oldest and most accepted breweries is Birra Peronii??which was established in 1846 and the headquarter of Peroni is in Rome. Peroni ‘s most celebrated merchandise is a pilsner-style beer. Nastro Azzuroi??which is besides one of the few Italian beers that marketed all over the worldi??Nastro Azzuroi??is a instead light manner beeri??many breweries are crafting darkeri??heavier beers that are bestiring involvement from new and experient beer drinkers likewise. In add-on to those elephantine breweriesi??there are many microbreweries in Italyi??and they play a of import function and have a great part of the market every bit good. A microbrewery peculiarly additions attending from immature Italians is Birrificio Baladini??the brewery entreaties to immature coevals through far-out advertizements and patronizing international music festivals and immature Italians think there ‘s room in the planetary beer market for some of their most outstanding brews.
Canada
Traditionallyi??Canada ‘s largest brewing companies were Labatt ‘s and Molson. In 1995i??Labatt ‘s was purchased by an Belgian company which is called Interbrew and it is now a portion of Brazilian-Belgian Anheuser-Busch InBevi??the universe ‘s largest brewing company and Molsoni??the other largest beer companyi??which was merged with US company Coors in 2005 and created a new company called Molson Coorsi??which is the universe ‘s 5th largest brewing company now.
In 2006i??with the purchase of Sleeman Breweriesi??the largest staying Canadian brewery was purchased by the Japanese company which owned Sapporo Breweryi??The Canada ‘s beer production market is chiefly under control of many foreign multinationals. Approximately 90 % of beer gross revenues under license was of merchandise brewed domestically from non-domestic corporations by the terminal of 2006. American beers brewed under license dominate much of the market. For instancei??in Canada by Labatt ‘s and Coors LightMolson, Budweiser is brewed under license.
The market in Canada for domestic beer is dominated by many foreign companies as we mentioned, which are Labatti??Molson and Sleemani??they are all foreign owned companies. The biggest Canadian owned breweri??Moosehead breweriesi??only controls about 5.5 % of the Canadian market.
Country comparing
Macro-economic indexs
Economy
Canada population 33,487,208 ( July 2009 est. ) .
Italy population 58,126,212 ( July 2009 est. ) .
Economic freedom Canada universe rank 6.
Economic freedom Italy universe rank 87.
Finance
Fiscal freedom for Canada: 80.0.
Fiscal freedom in Italy 60.0
Canada investing freedom 75.0.
Italy investing freedom 75.0.
Canada
Economy
-GDP ( Buying Power Parity )
$ 1.335 trillion ( 2010 est. ) . Country comparing to the universe: 15.
$ 1.297 trillion ( 2009 est. )
$ 1.33 trillion ( 2008 est. )
-GDP Per capita ( PPP )
$ 39,600 ( 2010 est. )
state comparing to the universe: 22
$ 38,700 ( 2009 est. )
$ 40,000 ( 2008 est. )
-Inflation rate ( consumer monetary values )
1.6 % ( 2010 est. )
state comparing to the universe: 41
0.3 % ( 2009 est. )
Italy
Economy
-GDP ( PPP )
$ 1.782 trillion ( 2010 est. )
state comparing to the universe: 11
$ 1.763 trillion ( 2009 est. )
$ 1.857 trillion ( 2008 est. )
-GDP per capita ( PPP )
$ 30,700 ( 2010 est. )
state comparing to the universe: 43
$ 30,300 ( 2009 est. )
$ 31,900 ( 2008 est. )
-Inflation rate ( consumer monetary values )
1.4 % ( 2010 est. )
state comparing to the universe: 32
0.8 % ( 2009 est. )
Historical developments
Italy
Beer is known and drank in Italy really long clip agoi??Italians brewed and consumed the blond drink. It said that Roman Emperor Agricola was a fan of beer when he was the governor of Britanniai??and in 83 AD Roman Emperor Agricola raised to the imperial throne and came back to Italyi??he took three maestro beer makers with him from Glevum of which the antediluvian name Gloucester and opened the first existent “ saloon ” in Italy.
Nowadays beer is particularly loved by immature people in Italyi??which has been seen as an informal drinki??compared to the vino which is alway used in much more formal topographic points. Aperitif and vino savoring have now gained back to wine many insouciant drinkersi??howeveri??until a few old ages agoi??young Italians really imbibe more beer than vino.
Pub-styled bars are still really popular in Italy and they have spread the love for the more alien trade names of beer: many of them serve Japanesei??Germani??Australian and East European beers along with the more known 1s brewed in the UK and Belgium. At least one bottle of “ Birra cinese ” ( Chinese beer ) is served on every tabular array of every Chinese eating house.
Canada
In the 17th centuryi??European colonists foremost introduced beer to Canadai??as Canada had an ideal clime for doing and hive awaying beer before infrigidation was introduced. Jean Talon built the first commercial brewery in Quebec City.
In 1668, more than a century subsequently when beer foremost came to Canada, a figure of commercial beer makers came outi??including some that subsequently became the samples of the Canadian beer industry: John Molson founded a brewery in Montreal in 1786i??Alexander Keith inHalifax in 1820i??Thomas Carling in London in 1840i??John Kinder Labatt in 1847i??also in Londoni??Susannah Oland in Halifax in 1867i??and Eugene O’Keefe in Toronto in 1891. G. Riley for “ an improved method of brewing alei??beeri??porteri??and other maltliquors. ” was the really first one patent to be issued by the Canadian authorities on July 6i??1842.
Prohibition in Canada did non last every bit long as in the U.S, and it was mostly effectual by the center of 1920s ( nevertheless in Prince Edward Islandi??it ran from 1901 to 1948 ) . Nonethelessi??it still had a similar consequence of go forthing really few beer makers in Canadai??by the late 20th century, it was merely that there has been a resurgence and microbreweries have started. However in some states, brew saloons are still illegal.
Cultural system
Hofstede ‘s Cultural Dimensions of Italy and Canada
Power Distance
Individuality
Maleness
Uncertainty Avoidance
Italy
Higher
More corporate
More masculine
Strong
Canada
Lower
More individualistic
More feminine
Weak
Power distance
Canada is lower on the Hofstede ‘s power distance index than Italyi??Italy is in the center on the index by and large. Italian seems to anticipate differences in power between people. Canada ‘s Power Distance ( PDI ) is comparatively low compared to Italyi??the index of PD is 39 for Canadai??is still lower compared to a universe norm. This is declarative of a greater equality between social levelsi??including governmenti??organizationsi??and even within households. This orientation reinforces a concerted interaction across power degrees and creates a more stable cultural environment.
Individuality
The more corporate nature of Italy compared to Canada can be seen in many ways. It is non uncommon for adult kids to populate with their parents for old ages. Italian concerns are chiefly owned by persons and households. Business is sooner done with people with which 1 is familiar. Unacquainted invitees will non be invited into an Italian place. Coffee or dinner will be taken with non-family members at a coffeehouse or eating house. Canada has Individualism ( IDV ) as the highest ranking ( 80 ) Hofstede Dimensioni??and is declarative of a society with a more individualistic attitude and comparatively loose bonds with others. The public is more autonomous and looks out for themselves and their close household members.
Maleness
Italy is a reasonably masculine society and ranks somewhat higher on this index than Canada. Many Italian work forces still handle adult females with heroism and value machismo. Although adult females have entered the workforcei??their Numberss are still little and few are in upper echelon places. Italian family are the exclusive sphere of adult females ; Italian adult females for the most portion cooki??clean and attention for the kids. Italians place a premier importance on stuff ownerships. It is really of import to look good in Italy.
Howeveri??like a more feminine culturei??Italians besides know how to take clip to appreciate the good things in life. Italians work in order to populate instead than populating to work. Ambition is non prevailing in Italian civilization. Therefore I assume that beer as a informal beveragei??it is more popular under this sort of cultural background instead than more formal cultural background states.
Uncertainty Avoidance
Italy avoids unsteadily more strongly than Canada. By and big Italians prefer to make concern with people they know. In additioni??Italians prefer to cognize something about an person before they speak with him/her on the phone. Thusi??in concern one should direct an introductory facsimile and followup with a phone call.
Political/Government System
Beer or malt liquori??is defined as all fermented spirits brewed in whole or in portion from malt for the intents of the Excise Acti??grain or any cloying affair without any procedure of distillationi??but does non include vino.
Italian Alcohol Taxes and Duties Legislative Framework
Alcohol
Duty
Beer ( 5 % ABV or 12Es Plato )
0.12? per pint
Wine ( bottle 11.5 % ABV )
0.00? per 75 chlorine
As we can see in the tabular array of different rates of responsibility applies to beer in Italyi??which contains following degree of responsibility. Italy is a member of the European Unioni??therefore it portions the Common External Tariff government. EU responsibilities are charged by the Italian Customs Agency on the CIF ( costi??insurance and cargo ) value of the merchandise imported into Italy.
The Alcohol Act ( 2001 ) bans Television and wireless advertisement of alcoholic merchandises between 4PM and 9PM and prohibits alcohol advertizements from being shown on Television within 15 proceedingss before or after any kids ‘s plans. The Act besides requires a self-regulatory codification to be provided jointly by media companiesi??advertising bureaus and advertizers to regulate alcohol advertisement.
For the legal imbibing agei??there is no minimal age of legal imbibing. And the legal buying age of intoxicant is 16 and 18. South Tyrol prohibits both functioning and purchase for people under the age of 18 and to everybody in a province of alcoholism. Milan has enforced a prohibition on those under 16 buying intoxicant. Heavy mulcts are given to proprieters and parents if a dealing is completed.
Canadian Alcohol Taxes and Duties Legislative Framework
Beer
Duty
Up to 1.2 % intoxicant
$ 2.591/hectolitre
1.2 % to 2.5 % intoxicant
$ 13.990/hectolitre
Over 2.5 % intoxicant
$ 27.985/hectolitre
As we can see in the tabular array of different rates of responsibility applies to beeri??which contains following degree of responsibility: ( 1 ) more than 2.5 % absolute ethyl intoxicant by volume ; ( 2 ) more than 1.2 % but non more than 2.5 % absolute ethyl intoxicant by volume ; and ( 3 ) less than 1.2 % absolute ethyl intoxicant by volumei??and for all beer incorporating more than 2.5 % absolute ethyl intoxicant by volumei??the rate of excise responsibility is presently $ 27.985 per hectoliter. Howeveri??excise responsibilities are non imposed on beer provided it is brewed by a individual for personal or household usage or to be given off without charge and is non for sale commercially.
Canadian authorities showed how extremely they value beer production and its breweries by take downing the revenue enhancements exercised on beer production. This is a benefit to the industry. As one of the leaders of the whole economic system of Canadai??the beer sector is likely to keep these revenue enhancement benefits and other benefits might be offered every bit good to the beer sector to develop the Canadian beer industry.
In Canada, intoxicant was taxed pursuant to the Excise Act antecedently. Howeveri??a new government in Canada for the federal revenue enhancement of certain alcoholi??including liquors and winesi??was introduced in the Excise Acti??2001i??which was implemented effectual July 1i??2003. Strike responsibilities on beer ( and malt spirits ) continue to be imposed under the Excise Act. Generallyi??different excise responsibility intervention applies to alcohol for non-beverage usage. A license is required authorising certain intoxicant operations under both the Excise Acti??2001i??and the Excise Act. For beeri??a license is merely required under the Excise Act for the commercial operation as a breweryi??for examplei??the topographic point where beer is manufactured. All brewery licensees are required to post and keep security with the Canadian authorities. The sum of security is set at a lower limit of $ 5,000. Generallyi??beer is capable to an excise responsibility that is imposed and becomes collectible during the production procedure.
The legal imbibing and buying age in Canada are both 19. Howeveri??In some countries such as Ontarioi??Saskatchewani??British Columbiai??Newfoundland and Labradori??Nova Scotiai??Northwest Territoriesi??Yukoni??and Nunavuti??underage imbibing under parental supervising is permittedi??with some restrictionsi??on one ‘s ain belongings in the states of New Brunswick andOntario and at place in the states of Prince Edward Islandi??British Columbia and Saskatchewan. InBritish Columbiai??only kids of the oversing parentsi??not any other bush leagues such as guestsi??are allowed minor imbibing. Consumption of intoxicant in another individual ‘s place is capable to other Torahs.
Major participants
The brewing industry had become highly concentrated in Canada by the 1970si??being dominated by merely three major companiesi??which are Molsoni??Labatti??and Carling-O’Keefe. Canada ‘s largest brewing companies were Labatt ‘s and Molson as we mentioned in the old overview of industry status of both states. In 1995i??Labatt ‘s was purchased by an Belgian company which is called Interbrew which is now portion of Brazilian-Belgian Anheuser-Busch InBevi??the universe ‘s largest brewing company and Molsoni??the other largest beer companyi??which was merged with US company Coors in 2005 and created a new company called Molson Coorsi??and it is the universe ‘s 5th largest brewing company now. In 2006i??the largest staying Canadian brewery was purchased by the Nipponese owned Sapporo Breweryi??Canada ‘s beer production has been chiefly under the control of foreign multinationals.
By the terminal of 2006i??nearly 90 % of beer gross revenues was of merchandise brewed domestically under license from non-domestic corporations. American beers brewed under license dominate much of the market. For instancei??Budweiser is brewed under license in Canada by Labatt ‘s and Coors Light by Molson. The market in Canada for domestic beer is dominated by Labatti??Molson and Sleemani??all foreign-owned companies. The largest Canadian-owned breweri??Moosehead breweriesi??only controls little part of the Canadian market.
Italy hosts a few breweriesi??with the largest owned by the best known Italian and foreign trade names. Peroni ‘s brewery produces the best known Italian beer: “ la Peroni ” . Peroni besides produces the premium beer Mastro Azzurro and the trade names Wuhreri??and lesser known Raffo. Heineken Italy brews it ‘s celebrated Heinekeni??but has besides acquired the trade names Morettii??Ichnusai??Birra Messina and Dreher. Carslberg owns a few brewerys in Northern and Central Italy. In Northern Italyi??Forst brews its ain branded beer every bit good as the celebrated Menabrea. In Friuli Venezia Giulia the latest trade name of Italian beer Birra Castelloi??has been active since 1997. Along with these large playersi??there are tonss of microbreweries – little graduated table breweries that produce little measures of beeri??they besides have premium quality.
Major determination of comparing and recommendations
Making a determination in which state to put is non so easyi??because of all those different discrepancies in both of the countiesi??some of the discrepancies are strength for Canadai??howeveri??some of them are favourable for Italy.
In the first placei??the revenue enhancement rates between Canada and Italy differ. In Canada the rates are comparatively lower than in Italy due to the fact that the revenue enhancement degree is comparatively high in the European context. In add-on to thisi??the Canadian authorities reduced revenue enhancements even more to profit Canadian beer makers.
Secondlyi??when a expression is taken at macroeconomic indexs like GDP per capita we see that Canada is a bit more favourable. Howeveri??since this differences are so smalli??both of the states that we have chosen are developed countriesi??and GDP per capita which above certain degree has a comparatively weak influence on the ingestion of beer. Thereforei??this factor is non likely to hold a important influences on the desicion of investing in the states.
Thirdlyi??the population above legal imbibing age in the markets has been calculated get downing from the age at which intoxicant ingestion is allowed. This would intend that we start numbering the population get downing from 18 old ages old in Italy ( some country start from 16 old ages old ) and 19 old ages old in Canada. We find that the comparative sum of people able to buy and devour intoxicant in Italy is larger than in Canadai??because the whole population is larger in Italy than in Canadai??and the population of legal imbibing age are besides higher in Italy than in Canadai??thereforei??the possible market in Italy are larger than in Canada.
Lastlyi??when comparing markets harmonizing to its participants and their market portions we find that Canada has a more concentrated market with high market portion big participants and many little participants. Italy on the other manus has two old participants with a high portion and one smaller participant while the remainder of the market consists of truly little participants. It would hence be an advantage to put in the Italian market ; seeking to derive and increase a market portion because of the fact that there are many foreign participants already play really of import functions in the Canadian marketi??Molson Coors Brewing company and Anheuser-Busch InBev have a market portion of 42,70 and 42,20 per centum severally. Third topographic point is hold by Moosehead Brewing company with a portion of 5,90 per centum. These three chief participants hold 90,8 per centum of the market in entire by volume.
Taking all those facts into consideration, I would state that Italy would be the state that we are traveling to put in. As we explained abovei??we analysed both states SWOT, for Italy, the strength is market size, the failing is comparatively higher revenue enhancement rate on intoxicant, and the chances is that there are merely two large old participants and some utmost little playersi??gaining or increasing a portion is comparatively easyi??and the market of Italy are more potentiali??because Italy still on the turning stage of beer industry. Moreoveri??since the age allowed to imbibe in Italy get downing from the age of 18 and in some countries are even lower to 16i??and with more population in Italyi??therefore the market is bigger in Italy than in Canada. In additioni??nowadays the Italian authorities extremely values the Italian beer industry due to the impact on its economic system and therefore revenue enhancements are acquiring lower and lower. And the menaces of Italy is that new public policy may harm the beer industry, such as the advertisement policy we mentioned before which bans the ads of intoxicant in specific period of clip on Television.
