SRN: 0130590

International Marketing plan for:

In Colombia.

MSc International Marketing

International Marketing Management

[MKT7015]

Introduction

The cheesecake factory is an American restaurant and bakery business, founded in 1978,
its headquartered in Calabasas Hills, California. It employed about 35,700 people as of
December 31, 2014. The company recorded revenues of $1,976.6 million during the
financial year ended December 2014 (FY2014), an increase of 5.3% over FY2013
(Marker Line, 2014).
It owns and operates about 190 casual-dining restaurants in 37 states in the USA that
offer more than 200 menu items ranging from sandwiches and salads to steaks and
seafood. The highlight of the menu is the cheesecake, which comes in about 70 varieties.
Each restaurant has a unique design featuring an over-the-top opulence, Las Vegas-style
glitz (Hoovers, 2015) providing a distinctive, high quality dining experience at moderate
prices, offering an extensive, innovative and evolving menu in an upscale casual, high
energy setting with attentive, efficient and friendly service. As a result, The Cheesecake
Factory restaurants appeal to a diverse consumer base across a broad demographic
range.
The restaurant is characterized for delivering a unique guest experience, creating a
competitive advantage. The key elements of their position within the business include:

Leader in menu innovation

Operational excellence stems from experienced, talented and tenured

management.

Bakery vertical Integration. (The Cheesecake Factory, 2015).

The company has started their expansion into international markets in the Middle East,
Asia and Latin America. Colombia because of its dynamic economy and growing
gastronomic sector its now on the companys scope to introduce and develop the brand
in the South American country.

Country and product - service selection.

The cheesecake factory its currently implementing an internationalization plan,

identifying potential new markets where it has growth opportunities. Due to Colombias
growing eating out tendencies and restaurant market, its an accurate place to develop
an entry strategy to develop this restaurant within the country.
Colombia is located in the northwestern corner of South America, alongside the
Caribbean Sea, bordering the Pacific Ocean between Panama and Ecuador. Colombia
has an area of 1,138,903 square kilometers and a total coastline of 3,207 kilometers. It
shares borders with Venezuela to the east, Brazil to the southeast, Peru and Ecuador to
the south-southwest, and Panama to the northwest. With the fifth-largest area in Latin
America in terms of size. (Nations encyclopedia, 2015)
Colombia has 47.2 million inhabitants (See Figure 1), it has the 29th largest population in
the world and the second largest in South America, has a moderate population density of
42 inhabitants per km2. It has the third largest Spanish-speaking population in the world.
Colombia is a young and dynamic country in which 55% of the population is under 30
years of age.
Its capital is Bogot and its currency Colombian pesos.
Colombia is the number 33 economy in terms of GDP. Its public debt in 2014 was 125,890
million euros, 44.28% of GDP and per capita debt of 2,640 euros per capita.
According to the doing business index, Colombia occupies a competitive place within
Latin America, making the country an excellent place to expand The Cheesecake Factory,
due to the government policies on foreign investment that include protective policies for
investors (See Figure 2, 3).

Figure 1: Population of Colombia

Figure 2: How Colombia and comparator economies rank on the ease of doing business

Source: Doing Business database.

Figure 3: Investor protection Index

Implications of applied models

Pestle
Colombia has done a big effort to increase its indicators in economy, security, investment,
tourism, life quality, development and the legal environment. The actual president of
Colombia is close to end peace talks with the FARC group, getting important advances
that will change the political scene of the country after more than 50 years of internal
conflict. This will have impact not just the politics of the country, the economy its expected
to experience a positive change, increase trust from investors and even the Colombians
themselves. The country has a strong economy, was able to go through the oil prices
drop diversifying in different fields. Colombia has a great advantage regarding
demographics, the medium age is 29 years old, which is very important for investors it
means more labor force, customers and spending.
The technological development of Colombia still very slow, companies have to look for
technologies overseas if they want to get an advantage from competitors.
Investors can find an excellent place to take their business to in Colombia, thanks to the
countrys liberalization and benefits on FDI. The government have been implementing
high environmental standards, this will ensure companies sustainability.

SWOT
Colombia is a country with an excellent scenario for investors, the economic stability,
increasing middle class and investors protection are few of the positives changes that
they country has been doing for years. Investors have a fundamental part on contributing
with the country progress, dealing with one of the most important problems,
unemployment, and the country has a high qualify labor thus foreign companies are able
to create structured employment plans. The country nowadays face a competitive market
with high exchange rate volatility, making investors to build a strong differentiation factor
in order to succeed in the national market.

Culture

Figure 4: Hofestede Cultural comparisons

Source: (The Hofstede Centre, 2016)

Colombia is a unique country regarding its culture, people have high sense of belonging.
The Colombian consumers are changing their habits in recent years, due to increased
active working young people who are creating new consumer trends. The Colombian
consumer is ignoring the kitchen at home, especially on weekends and holidays, creating
a high demand for restaurants. As for eating habits, the Colombian is much influence in
American culture, a trend which is increasing. The consumer appreciates the mix of local
cuisine with international cuisine, he likes to go out in large groups of friends or family,
seeking to find sites that offer an experience as added value to the food, because really
enjoy sharing a long time.

Value of restaurants market

The restaurants market in Colombia is experimenting an important grow within the last
years, the Colombians increase income has a direct link with this behavior. The most
important cities of the country are opening new restaurants constantly from local
establish or new branches to international restaurants. Colombian consumers want to
explore new tastes, thats why the international kitchen its growing in a fast pace in the
principal cities. According to an investigation made by Acodres, indicators evidence the
dynamic behavior this industry is going through nowadays in Colombia (See figures 5,
6)

Figure 5: Percentage distribution - Region and Restaurant size

Less than
Region
100
Barranquilla
13,79%
Bogota
44,83%
Bogota (Outside)
10,34%
Bucaramanga
13,79%
Cartagena
6,90%
Medellin
10,34%

Seats number
Between Between More
100 - 199 200 - 299 than 300
12,82%
5,56%
0%
53,85% 33,33%
20%
2,56% 11,11%
40%
10,26%
5,56%
0%
7,69% 33,33%
20%
12,82% 11,11%
20%

Source: Acodres
(Acodres, 2016)
Figure 6: Percentage distribution - Sales by region
Monthly sells in Millions (COP)
Less than Between Between More
Region
100
100 - 199 200 - 299 than 300
Barranquilla
17,24% 10,26%
5,56%
0%
Bogota
48,28% 51,28% 27,78%
40%
Bogota (Outside)
3,45%
5,13% 16,67%
40%
Bucaramanga
10,34% 10,26% 11,11%
0%
Cartagena
6,90% 10,26% 27,78%
20%
Medellin
13,79% 12,82% 11,11%
0%

Figure 7Source: Acodres

(Acodres, 2016)

Media Habits
This South American country maintains media consumption trends in the traditional way,
with the favorite channel, television, followed by radio; in these media it can created very
important brand positioning strategies to increase the brand awareness, Colombian
people enjoy very much innovation in this scene. Nowadays, social media in Colombia
has the third place, is the most used by young and starting to look as an effectively
communication channel. Advertising
Competitors
COMPETITOR
Andres D.C

APPROACH
A high range local restaurant in Bogota, it
offers a wide variety of food, including
Colombian typical food and drinks.

Crapes and Waffles

Colombian restaurant, operates in the

most important cities, It offers healthy
food, home style while having social
responsibility program.

Wok

A high range local restaurant in Bogota

that offers international food,
representative dishes of Japanese, Thai,
Vietnamese and Cambodian food, among
others. Is made as far as possible, with
ingredients from local communities. (Wok,
2016)

Differential advantage

The Cheesecake factory manages an excellent structured differential advantage, its focus
is the cheesecake itself, being this one the main reason of why the restaurant opened,
offering around 50 varieties of cheesecakes to have them with more than 200 different
dishes and an innovate skinnylicious menu, to satisfy healthy customers. The restaurant
is constantly researching what people want to incorporate it to the menu and getting off
the ones that people dont look at. Going to The Cheesecake factory leaves an
exceptional experience to customers, from location, decoration, service, food and the
cheesecake.

Launching challenges

Colombia is currently implementing more taxes for business, the cheesecake factory will
need to get into development programs in order to get exceptions, having certain number
of local employees, and getting ingredients from local communities are some examples.
Local associations have a high influence with government and media, the company will
need to get to terms with them before their entrance, and one of the actions to take is
joining one of them or defining an entry strategy that involves local companies.
Colombian consumers have a different taste when it comes to food from the American
culture, the restaurant will have to make a research to identify what changes are needed
to be done, like, sugar and spice levels and sizes of portions.

PESTLE ANALYSIS
1. Political
Colombia has done an excellent job to improve the political stability thanks to the publicsafety provisions under the administration of Juan Manuel Santos, working on macroeconomic and security policies along with his inclusive style of governance. The
government policies are always looking to attract foreign investment, giving companies a
secure scenario and guidance by Procolombia the agency in charge of promote
investments. In addition, the country is close to sign the peace agreement with the group
FARC by March, 2016; will make the country safer and create new opportunity for
investors.
2. Economical

The economy in Colombia continue as one of the strongest of the Latin American region,
despite of decrees of oil prices. The annual growth in 2015 was 3.5% and this year its
expected to grow 3.8%, driven by domestic demand, private consumption, investment
and governments infrastructure projects. The World Bank has ranked Colombia seventh
on its list of countries with the highest income equality in the world; the facts confirm the
stable economy that Colombia has and the excellent opportunities for investors.

Key Macro-Economic Indicators

Real GDP (% change)
Nominal GDP (US$ bil.)
Nominal GDP Per Capita (US$)
Consumer Price Index (% change)
Exchange Rate (LCU/US$, end of period)

2011
2012
2013
2014
2015
2016
2017
6.6
4
4.9
4.6
2.5
2.4
2.7
335.7
369.5
380.1
378.9
294.6
282.8
300.5
7,130
7,745
7,866
7,744
5,948
5,643
5,926
3.4
3.2
2
2.9
4.7
4.3
4.3
1,942.70 1,768.23 1,926.83 2,392.46 3,156.53 3,221.82 3,221.82

Source: Historical data from selected national and international data sources. All
forecasts provided by IHS Global Insight. Table updated on the 15th of each month from
monthly forecast update bank (GIIF). Written analysis may include references to data
made available after the release of the GIIF bank.
3. Social
As of 2010, 66.8% of the Colombian population belonged to the 1564 age group and
27.2% to the 014 age group. The median age was 26.6 years, indicating that the country
has a demographic advantage in terms of the number of people of working age. Having
this, Colombia has several opportunities for international business, where company can
take advantage of them.

4. Technological
Colombias progress in terms of technological development has been limited and the
country has been unsuccessful in utilizing its FDI inflows to develop its technological
capabilities. The government has taken initiatives to encourage scientific research by
offering different types of grants and financial aid, and funds for innovation and business
development. The government also provides R&D incentives. Despite these deficiencies,
the ICT sector has emerged as a bright spot on the technological landscape of the country
and its growth is expected to continue in the near term.
5. Legal

Colombias constitution, enforced in 1991, provided the judiciary with greater

administrative and financial powers, and independence from the executive branch. The
investment regulations are among the best in the region, and its policies have encouraged
foreign investment despite internal security threats. The Colombian government has
always been a supporter of foreign direct investment (FDI) and has encouraged FDI over
the years. The government began liberalization reforms in the 1990s, paving the way for
lifting controls on the remittance of profits and capital, and allowing foreign investors in
most sectors. Laws are formulated on foreign investment by the Ministry of Trade,
Industry, and Tourism in association with the Ministry of Finance and Public Credit.
Current regulations on foreign investment are laid down in Law 9 of 1991.
6. Environment
Colombia has remained at the forefront of maintaining environmental standards in Latin
America. Colombia has been keen on keeping its commitment to various international
environment treaties. Several sectors such as cement, power plants, agro-industry
(panels) and forestry are the frontrunners in drawing up clean development mechanism
projects.

SWOT
Strengths:

The country's middle class increased from represent approximately 30% of the
Colombian population in 2014. The middle class population its expected to grow
37% by 2020 and 46% by 2025.

Colombia is one of the countries with greater economic stability in the region. In
the past five years, the Colombian economy grew by an average 4.8%.

During 2014, Colombia's GDP grew above the average estimate for Latin America
and the Caribbean. While the country grew 4.6%, the region was estimated at 1.3%

Low labor cost

Colombia is the leader in the region in terms of investor protection

Opportunities:

A dynamic domestic market, being the 23rd largest population of the world and
the second most populous Spanish-speaking population.

One of the countries with the largest annual increase in availability of human
resources according to the 2012 IMD Workforce Growth Rate.

More than 200 thousand students graduated every year from higher education,
53% undergraduate and 28% postgraduate.

7 of the countrys universities are amongst the best in the world.

Strong international integration with eight free trade agreements in force, three
signed agreements and five under negotiation that will give you preferential
access to a market of more than 1.5 billion customers.

Weaknesses:

Informal employment

Colombia doesnt have a developed vial infrastructure

Technological backwardness

Increasing taxes

Threats:

Reject of national associations

Changing exchange rate

Increasing number of competitors

References
Country Reports - Colombia' 2015, Colombia Country Monitor, pp. 1-18, Business
Source Complete, EBSCOhost, viewed 1 March 2016
Colombia' 2011, Colombia Country Profile, pp. 1-79, Business Source Complete,
EBSCOhost, viewed 1 March 2016.
Colombia: In-depth PESTLE insights' 2015, Colombia Country Profile, pp. 1-92,
Business Source Complete, EBSCOhost, viewed 1 March 2016
Hoovers, 2015. The Cheesecake Factory Incorporated company information. [Online]
Available at: < http://www.hoovers.com/company-information/cs/companyprofile.THE_CHEESECAKE_FACTORY_INCORPORATED.1e6bc271547a3148.html>
[Accessed 1 March 2016].
'The Cheesecake Factory Incorporated SWOT Analysis' 2015, Cheesecake Factory
Incorporated (The) SWOT Analysis, pp. 1-8, Business Source Complete, EBSCOhost,
viewed 1 March 2016.
Nations Encyclopedia. Country Overview [Online] Available at:
<http://www.nationsencyclopedia.com/economies/Americas/Colombia.html#ixzz41hHJz
9WO> [Accessed 1 March 2016]
The cheesecake factory, 2016. Investors Relations. [Online] Available at:
<http://investors.thecheesecakefactory.com/phoenix.zhtml?c=109258&p=irolcheesecakefactory> [Accessed 1 March 2016].
The International Bank for Reconstruction and Development / The World Bank, 2016.
Doing Business 2016. [PDF] Available at:
<http://www.doingbusiness.org/data/exploreeconomies/colombia/~/media/giawb/doing%
20business/documents/profiles/country/COL.pdf?ver=3> [Accessed 2 March 2016]
Procolombia, 2015. Why Invest in Colombia? [Online] Available at:
<http://www.investincolombia.com.co/why-colombia.html#the-government-scommitment-to-development> [Accessed 2 March 2016]

Procolombia, 2015. Investment booklet 2015. [PDF] Available at:

<http://www.investincolombia.com.co/images/Investment_Booklet_2015.pdf> [Accessed
2 March 2016}
Hofstede Centre, 2016. Colombia in comparison with the USA [Online] Available at: <
http://geert-hofstede.com/colombia.html> [Accessed 3 March 2016]
Datos Macro, 2014. Colombia Poblacion [Online] Available at
<http://www.datosmacro.com/paises/colombia> [Accessed 2 March 2016]
Acodres, 2016. Operation of restaurants in Colombia, fourth edition. [PDF] Available at:
<http://acodres.com.co/wp-content/uploads/2013/09/operacionrestaurantes.pdf>
[Accessed 9 March 2016]