International Business Strategy for Expansion in China

INTERNATIONAL
BUSINESS STRATEGY

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Contents
Introduction............................................................................................................... 2
Main Body................................................................................................................ 2
Background........................................................................................................ 2
Country Choice & Product Choice................................................................................2
Useful theories and concepts in strategic design...............................................................4
International business strategy choice............................................................................ 7
Strategic implication of the choice................................................................................7
Conclusion................................................................................................................ 7
References................................................................................................................ 9

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Introduction
For the sustainability and growth of the business, it is critical for any organisation to ensure
that they have an expansion plan in other parts of the world (Zhang, Ma & Wang, 2012).
Bronze snake is an emerging and small scale fashion retailer in the country. They have a
scope of expansion in China. This report will discuss the market condition of China for
expansion along with its current market and competencies. It is also discuss the product
choice in China. It also describes useful theories & concepts in strategy design and the
strategic implication of the Choice which can be used by the company.
Main Body
Background
 Bronze snake is an SME from Australia dealing in the business of fashion retail. In
2013, this firm received smart company award
 Revenue growth of the company is around 118%. It is having total numbers of 17
employees. It was founded back in the year 2008. Its turnover is around $3.9 million a
year (Bronze Snake, 2018).
 Australian fashion market has expanded a lot and has noticed the growth rate of 110%
with its turnover of around 16.21 billion AUD in the year 2017. New emerging brands
in Australia are giving competition to the bigger fashion retailers within the firm.
 Key competencies of this firm include skilled employees, innovative products, lesser
cost of operations.
Country Choice & Product Choice
The country that has been selected by this firm for expansion is China. This is because it is an
emerging market having lots of potential to provide growth rate to SME more than any
country right now. With strong financial performance of the company and larger investment
capacity, this location is highly attractive and beneficial for the firm (Cardoza, Fornes,
Farber, Duarte & Gutierrez, 2016). There are many emerging cities in China which provide a
huge market base for the companies that aim to enter. They have an excellent infrastructure
that provides a good platform for the company to do its business. The product that this
company will sell in China is their clothing for both men and women. Their major products
are for the teen age population. In china this young age people are also larger in numbers
hence it would be easier for the company to expand their business in this nation. It will also

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allow the company to extend its reach in other parts of the Asia which is having many
countries with highly dense population. This product choice is again made due to the fact that
there is significant increase in the people’s income and hence they are changing their
lifestyle. This is pushing people to remain more attractive, fashionable and trendy (Bose,
2016). With a population of 1.3 billion people having their clothing needs it could be an
effective market for expansion of Bronze snake. In order to understand the environment for
business PESTLE analysis can be effective.
 Political: China is a politically stable country having a large bureaucracy. In the time
of their trade war with U.S., they are making it easier for the companies with the help
of strategies to come in the country. Only problem that this company might face is the
fact that there is large corruption in the market. Due to this corruption Bronze snake
might have to spend a lot on bribery so as to make their expansion very fast
(Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014).
 Economic: China is having second largest GDP in the world. Their projects like “Silk
Road” will make it one of the best destinations to work. In the time when the world’s
economic environment is showing a downfall, this can be an excellent market to do its
business. As emerging cities are coming up hence there are large numbers of investor
pool available in the country which can play an effective role in the expansion of this
company. Australia and China has good economic relations with each other hence
they will not face problems in economic terms.
 Social: Chinese society is an emerging society and people are adopting westernisation
at much faster rate than expected. There are also large numbers of people in all the
society’s segment hence this firm will get a huge market base for selling their
products. People are also looking for innovations in their clothing and style hence it
can generate higher sales for the company (Dominguez & Mayrhofer, 2017).
 Technological: Chinese technological infrastructure is strong and with billion people
connected with advanced technology it would be an effective market as their major
sales arise from the online sales. It would also help the company in doing marketing
communication which again is critical for the success of the firm.
 Legal: The legalities in China have been made easier so as to support the expansion of
the companies like Bronze Snake. Although company will have to look at the labour
and operations related laws so as to ensure that they do not face any legal compliance.