This research paper explores and identifies business opportunities in existence in China for the ABC Limited Company. Being the largest holder of market share segment, ABC is positively skewed to reap the benefits from this expanding market in China.
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Detailed appraisal of language, social institutions, values and attitudes inclination of China clearly indicate that the company can easy enter into this expansive market and sustain growth in the same. This forms the basis for feasible investment position.
With an already existing marketing structure in Australia, though currently dysfunctional, ABC should apply cauterization of marketing distribution channels within its wide established network alongside a strong financial arm in China in order to succeed.
The challenges that ABC may face in the entry bid include limited political, cultural, social freedoms encircled in the communist administration of China. Besides, there are legal restrictions. However, the opportunities available outweigh the challenges. Putting into consideration of the external and internal dynamics, ABC should enter the China biscuits market in the next 16 months.
Comprehensively, this paper seeks to establish a meticulous research and documentation of the results of the possibility of the ABC Limited establishing its China market in an attempt to expand its geographical quarter of operation. Besides, the essay will integrate the language, social institutions, values and attitudes and socio-cultural segmentation of the China market.
In addition, legal and political influences are covered. Also, this paper attempts to present a detailed analysis of the action plan of the company, and its choice of penetration technique into the China market.
Notwithstanding, the marketing needs of a detailed and workable blend that the company might employ to determine the suitability of China as a new market is also discussed. In a bid to establish an international investment opportunity, China displays a big potential with the several million citizens as ready consumers of biscuits product.
As projected by the United Nations, China market will grow by 30 percent in the next two decade. Thus, foreign companies such as ABC are in a strategy position to tap this market for its products (Adler 2008).
Doing Business in China. Social Institutions
Political Requirements Conformity
The essential political requirements of ABC Limited towards the entry planning and development phases are those that impact directly on the stability of the China culture. The communist system of China is in the forefront of promoting investor opportunities.
The rate at which the economy of China is growing is incredibly rapid and this has led to the diversification of the economy. Notwithstanding, this diversification of the economy has led to the definition of the inter dependence of ‘sectoral’ components of the economy that translate to the realization of a restricted business operation (Zou & Lui 2011).
Besides, the finance departments operating in China, foreign trade plays a great role in the market operations. Further, this interaction has a direct impact on the economic currency value of the country.
Consequently, this could be the reason why the China authorities insist on promoting the available opportunities for investors (especially foreign) in an outlook of luring them to invest into the economy. In the long run, this will make it easier of ABC Company to penetrate into China’s economy.
The penetration strategy should be that which causes minimum disturbances to the company both in terms of financial resource and the daily organizational activities of the company. Almost one fifth of the world population dwells in China. The geographically huge country has very advanced civilization system which has existed for almost three millennia.
The strong patriarchal hierarchical structure of family unit in China has been around for more than two and a half millennia as recorder in the Confucianism philosophy. The population of China stands at 1.35 billion and is projected to grow at 2.5 percent per annum. Due to the large population momentum, the big population provides ready market for finished product as they form the consumer bracket (Zou & Lui 2011).
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The two general ways of differentiating and segmenting the China market would be through using the basic consumer based market segmentation procedures and the enterprises’ opinion of the same.
For consumer based segmentation technique, the company will be involved in the evaluation of the different groups in the given market and their specific and respective consumption needs.
To a great extent this particular criterion lays strategic regards to the issue of the consumer involvement in the designing of the product. This type of consumer segmentation will be further categorized into several other processes of consideration (Byrnes, 2006).
Sustainability and Freedom of the Media
The second broad area of focus would be the suitability of the political arena for business. This will include the evaluation of the country’s history and present status of the political environment and its influences on the business cycles of a region.
Basically, stable and peaceful political environments create room for the healthy interactions of the trade activities while unstable political situations would mean the inverse of that. It is for this reason that ABC Limited should cautiously invest in China.
To begin with, the ideological orientation of the persons of that region in terms of awareness through the freedom of communication or otherwise forms of personal rights administration may influence the performance of different products in an economy (Zou & Lui 2011).
For instance, in a country that freedom of expression is allowed and is independent for that matter there is the possibility of the general public getting to hear detailed information on products. In China, the freedom of speech is exercised within the controlled boundaries that will still enable ABC to practice media advertisement in these boundaries.
Also, under the political environment is the government’s involvement in business activities of a country. The extent to which the government is seen to intervene in the economic environments could deter the development capacities of the businesses involved (Adler 2008).
As a matter of fact, if this involvement is without the constitutional boundaries, the government may seek to entirely extort foreign investors to its own gain. This could be through unfair hiking of tax rates, unreasonable maximum price controls and the rights issues of the office bearers.
All of the above are certainly going to impact negatively on the urge to economically associate with a given country. In this case study, at present, China being a democratic country does not depict any of the above economic vices. This could be a substantial reason as to why ABC Limited would invest in this country (Zhan & Zhan 2012).
In this meticulous case, the investors at hand have established that the China government is supportive in the development of not only its own economy but also that of the foreign investors. Thus, ABC would have to exercise restraint in its interaction within the administration and available market (Zhu & Wan 2012).
Values, Attitude and Language
The laws and regulations set of elements such a trade restrictions could be a turn off to potential investors in they are unreasonably high of stressful. In a way, no one will ever want to venture into an economy whose host country has rigid rules and regulations (Xiaowen 2001).
Also if the legal requirements of putting up a business structure are excessively many and unrealizable, it becomes economical to let go. In marketing, this situation is best defines a scenario in which a potential opportunity translates into a challenge.
China has a reputation of setting moderate legal expectations of a business which would other are a repellant to investors. Less legal hurdles are to be experienced by the marketer at hand (Travis 2007).
For the social dimension of the evaluation of the China market for the biscuits products of ABC Limited, it is necessary for the company to tailor its products to suit the acceptable cultural norms. This way, it is necessary for the marketer who is carrying out the research to evaluate the literacy levels of the China people (Song 2012).
This will include the evaluation of the China education system and levels. Most importantly is to link the findings to the target market of ABC Limited’s products. By doing this, the marketer will establish the level of awareness of the people of China and especially now that the products at stake deal with agricultural technological advancement (Pang & Lui 2011). Several questions may pop up during this feasibility study.
Comprehensively, it would be necessary to establish how conversant the people of China are to technological advancements constantly changing a cross the global arena. Research has it that China though very populous, have a high percentage of the literate in its population (Byrnes, 2006).
China has a high number of literate young who would be consuming the products of ABC Limited. The company could take this up as a business opportunity. The languages used in this country are basically the Chinese and English.
The fact that the participants of the trade activity from either country share a common language, that is, English will facilitate the entry of ABC Limited. The access to the market (exchange negotiations or otherwise) could be a factor that would influence the pattern of trade in the biscuit industry (Stuart 2008).
China has improved infrastructure systems in transportation and communication. This has played a major role in the improvement of delivery of social utilities. Moreover, the documentation of import regulations has made it clear that they are binding and any ambiguities are excluded from the equation (Roberts 2005).
The provision of patent and trademark rights in China has helped eliminate the chances of fraudulent attempts on a company’s product to ensure that the company is not disadvantaged. ABC Limited could take up this as an assurance of the protection to be offered to their products against illegal dealers though the registration process is very expensive in time and cost (Adler 2008).
China is a large market share that may trigger profitability. The sale of the products offered by ABC Limited will increase as a result of the acquisition of a new market from schools, colleges, hospitals to government corporations in China. They may choose to develop a franchise negotiation with ABC Limited. Since these products are not high perishable, storage arrangements can be deliberated on by both parties.
Similarly, due to the expansion and development of the market share, there might be other potential buyers who may seek to make their material purchases through the company directly. The mode of selling the biscuits products could be designed to suit the China conservative culture (Deer & Song 2012).
In addition, recent research on economic projection confirms that China has a stable exchange rate on the balance of payments echelon. Consequently, ABC stands to gain in China as profits made in the host country are repatriated in mother country (World Bank 2007).
As the China government seeks to re-invent the economy and restore investors’ confidence, China market currently enjoys a relatively peaceful and economically stable business environment. Factually, the China nation seems to be embracing the spirit of globalization and economic liberalization with an upbeat positive mood of better focused economic growth accompanied by development.
Thus, it is recommended that ABC should maximize the available opportunity to establish a structurally feasible marketing program as it has the advantage of knowledge on the China market segmentation and demand trends (Ambler 2000). In line with periodic marketing analysis, the entry should be fast tracked within a period of not more than 18 months
For various reasons, the provision of these products would be best done by sales persons of China native. This will increase the chances of credibility and ease on the interpersonal variables during product promotion and provision.
The company can hire China sales persons and orient them on the product’s features and production processes and later send them as representative of ABC Limited in China. At this stage, it would be necessary to encourage and facilitate the company-agent relationship which has been found to go a long way in the creation of a healthy trade environment (Bucknall 2000).
The products of ABC need to be integrated into the achievement of various organizational goals through the distribution processes to ensure that the products reach all designated customers.
Correspondingly, ABC organization may seek to offer different packages and sizes for its products and other associated services so that those customers, who buy in relatively smaller quantities but in bulk, are integrated in the marketing plan (Czinkota, Ronkainen, Moffett, Ang, Shanker, Ahmad, & Lok 2009). Besides, the plan will offer a variety of different distributions channels that will be vital in the attraction of new customers.
Conclusively, the location of China is suitable for establishing market networks for ABC products. The availability of the market for ABC Company in the populous China market is a positive factor to be integrated in the marketing plan. A rational investor would seize this as an investment opportunity.
Moreover, the currency’s stability and its minimal fluctuations would auger well with the business profit making objective. Thus, this country is a potential region for investment due to its economic stability, ready market, and the untapped market.
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