How I developed a passion for expansion consulting as a newcomer to the CBD industry
by Stella Zilberberg
February 15, 2022
Over the course of the consulting case, I began to develop an understanding of emerging markets, and most importantly, began to think of ways of how to position industry leaders in foreign markets, where the industry itself is either incredibly small or is only beginning to emerge. As a researcher, I feel that I have developed strong habits for seeking out primary information about a government or an industry.
With the progression of this case, I truly developed a passion for expansion consulting and learned that I have skill in seeing the connection between how companies can transfer key aspects of their internal and external culture to a market that would support and help develop this foundation even further. It was truly incredibly interesting to work with a trending company – running within a hot topic CBD industry – because with such a newcomer to the market, the downstream and upscale economic cycles have not yet been studied in depth.
Therefore, almost every company is a relatively early entrant into the market, making each one more susceptible to acquiring the benefits that come with producing what still remains a decently scarce product, but also more prone to making financial mistakes – the common patterns to which have not yet been identified in this industry.
The Learning Process
My team and I developed a way to communicate with our client – who was both incredibly busy and gave little to no restrictions on the expansion process. Therefore, we were forced to dive deep into the “industry exploration” and really research which foreign markets would provide opportunities for The Healing Rose.
For this, we firstly had to recognize the strengths of the company: a leader in a trending industry with westernized and 21st century appealing products and an advantage in the use of third party testing reports as a marketing strategy on their website. We also had to come to terms with the difficulties that came with The Healing Rose’s expansion process – mostly consisting of the requirement to move into a politically stable country with corresponding regulations on the percentage of THC concentration in products, as those that apply in the U.S CBD product market.
Investment in Professional Capital
After collecting our research on both Luxembourg’s and India’s CBD markets, we were able to suggest that The Healing Rose enter the Luxembourgish market. We found that the company’s entrepreneurial spirit and 21st century product appeal would thrive in the extremely urbanly developed Luxembourgish market, where they could also perform their competitive advantage and core competency of third party testing at a cheaper price and get more respect by the locals, who ultimately value ethical business approaches. To administer a full consulting process, we also provided CEO Laura Boehner with a preferred strategy to enter the foreign market, as well as an entry mode, staffing approach, structure policy, and regulations on the transfer of company culture – all factors chosen, by the team, to work together in creating the easiest transition into Luxembourg. We specifically suggested The Healing Rose use a global standardization strategy, after determining that the company will be facing high pressures for cost reduction in the already established industry with many solid competitors. Since the company faced little to no pressures for local responsiveness due to their already prominent competitive advantage of third party testing – which will be admired by Luxembourg’s consumer base – we suggested The Healing Rose export their products and then localize marketing strategies at their Luxembourg subsidiary, which will be run by an ethnocentrically staffed manager and polycentrically staffed employees – while the overall expansion functions on a networking structuring policy.
The business world is all about efficiency and effective communication; being able to interact with a small-business, based in Massachusetts, has done an amazing job in accurately demonstrating the time and effort it takes to run a company.
Having experience in aiding company expansion and consulting the overall process has opened my eyes to the overall process of decision making. Therefore, I am now able to divide research based on categories that are critical to the core competencies of the company I am collecting data for. Even more significantly, I can easily create analysis charts that match company strengths with foreign market opportunities, and automatically rule out the possibility of moving into a market that fosters the clash of company weaknesses with industry threats. Moving forward, I know I will be able to develop detailed consulting opinions – providing accurate suggestions for how to realize location economies, economies of scale, learning effects and cost reduction benefits, while transferring the company’s core competencies to a beneficial environment and maintaining the key needs and wants of the CEO.
About the Author:
Stella Zilberberg is an Honors International Business and Marketing Student at Northeastern University, Communications Minor and Brand Management Concentration