Expansion of Dairy Land in China: A PESTEL Analysis

International business
TABLE OF CONTENTS

TABLE OF CONTENTS..............................................................................................................2
EXECUTIVE SUMMARY-............................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Business drivers..........................................................................................................................4
Trade Barriers.............................................................................................................................6
Ethical and social issues..............................................................................................................8
Culture Preferences.....................................................................................................................9
Expansion Methods...................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

EXECUTIVE SUMMARY-
This study will show us about the expansion of London originated company Dairy Land in
china, by identifying the key factors that are necessary to identify the business drivers with the
help of political, environmental, social, technological, economical and legal factor analysis
shortly known as PESTEL analysis also it will show the trade barriers that comes in between the
global trade, this report will also show the cultural preferences as well as ethical and social
preferences. Thus, the Chinese Market is suitable for the UHT milk for 3-11 years of age of
children from where the market will be able to get attracted towards the product and can enable
the growth of the company at higher level. Also, the report will include the trade barriers social
issues and significant factors (Brunt, Sanders, Ernste-Nota and van Soest, 2021)
INTRODUCTION
International business is also known as global business, it is the type of business which is carried
on outside the geographical boundaries of the country, internal business includes the three main
components- import, export and entrepot in which the import means purchase of goods from
another country, export means to sell the goods to another country and the entrepot means import
of goods from another country to export it to another country (Matović, 2020). This report will
discuss some international business factors in relation with the UK originated SME Dairy land, it
was formed in the year 2013 by Kashiq Razzaq and Mohammad shahid, the main idea behind
this firm is procurement of dairy products with superior quality this organisation sells milk,
yogurt, butter, cream and cheese. The current business is going to launch in Chinese market as it
is suitable for the product as the demand of UHT milk in Chinese market is developed from
where the business can be able to grow and develop at international level by adopting and
understanding some relevant information and strategies. However, the 75% of people demanded
the UHT milk products which describe the growth and development of the company (Khalid, and
Rahman, 2019). This report will discuss about the business driver for expansion of the firm in
china, trade barriers in the foreign market, ethical and social issues, cultural preferences and the
methods of expansion.

MAIN BODY
Business drivers
Conduction of trade theories like PESTEL analysis is so necessary to identify the key business
drivers.
PESTEL ANALYSIS
PESTEL analysis consists of six main factors for the analyse these factors are Political,
Environmental, Social, Technological, Economical and Legal factors, let’s see all these factors in
relation with Dairy land: -.
Political factor: - There are some political factors that has impacted Dairy land while expansion
is Governance system, Regulatory practices, Taxation policies, time scale and allocation of
governmental resources, political stability.
Governance system - the government body’s favouring towards the organisation is the best
advantage for a firm grow in a country, because of good superior quality goods being procured
by Dairy land and it’s very affordable for the person who are purchasing the products of the
company, thus by watching these factors the government of china is appreciating and giving
advantages to the company for expanding itself in china (Salazar-Cabrera, and Pachon, 2019).
 Regulatory practices - the current changes in the regulation of china due to covid have made
it very harder for any firm to enter the market also mostly times the government of china
doesn’t create competitors over the world they just appreciate their own companies.
 Taxation policies - Over some time the taxation policy of the country is befitting the Dairy
land by providing less taxes on the products as it satisfies the necessity of the child of the
countries, which has been resulted in the high profit as well as increase in the spending of
the firm on research and development.
Environmental factor: -These can be said as the factors that provide benefit to the environment
that doesn’t affect environment and the factors related to environment that can affect the smooth
running of business, these factors are as follows: -
 Looking at the factor at the particularly business in UHT milk in children school 3-11
years.
Recycling of the products is becoming norm not responsibility, and for that the Dairy Land have
make or follow up some regulations that are related to recycling of product like the polythene
bag recycling is necessary in China as the people doesn’t through the poly bottles or bags