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Fragrance Ambrosia Perfume - Opportunities and Limitations

Added on - 04 Jul 2022

This report will examine the opportunities and limitations presented by a perfume manufacturer, Fragrance Ambrosia. The risk factors, long-term viability, corporate structure, and political and legal situations will all be explored and clarified. Perfume has become a daily necessity in current decades, and consumer demand for perfume is increasing day by day, both in terms of quality and brand. After overviewing the perfume market industry in China and USA, several recommendations for “Fragrance Ambrosia” accessing these foreign markets will be presented in the report.

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1
INB 10002
Authored by :Liong Kai Jiunn
SEM: 3
DATE: NOV 23
ID: 103698453
ASSIGNMENT 3
INDIVIDUA
L REPORT
(BRIEF CEO)
Abstract
The purpose of this report is to brief the CEO of an Australian owned luxury perfumery,
which intends to enter 2 host nations China and United state in the future 2-3 years. The
anaylsis of perfume markets in China and USA will be based on government statistic website,
global GDP rate, international business concept and theories from journal articles. Besides,
the evaluation of cultural, legal, political enviroment in frangaraces market for both host
countries has resulted a complicated relationship and connection due to certain differs of
structures and system. However, based on the analysis of economics enviroment in China and
USA such as annual wages rate, GDP and tax rate, it proven that the market entry are solid
and sustainable in the future 2-3 years. The report also indicates the most suitable business
forms for China and United State which is joint venture and a foreign manufacturing
subsidiary depending on consumer purchasing method, power, and style. In addition, the
estimation of total expenses in terms of production cost and employee’s salary will be the
concern of business forms decision. Consequently, it shows that‘polycentric’ will be utilized
in staffing concept due to the needs ofbusiness forms for China nations. While United State
nations will be considering mix of ‘polycentric’ and ‘ethnocentrism’. Ultimately, the report
ends with a realistic and practicable recommendation based on the analysis, which covered
every step that have to be conducted.
2
Table Of Contents
Abstract.................................................................................................................................................2
1.0INTRODUCTION.....................................................................................................................4
2.0 Overview.........................................................................................................................................4
2.1 China Market Size of Fragrance (2014-2024)..............................................................................4
2.2 USA Market Size of Fragrance....................................................................................................5
...............................................................................................................................................................5
3.0 Cultural Environment & Relationship (China & USA)....................................................................6
4.0 Legal system & Contract (China)...................................................................................................6
4.1 Legal system & Contract (USA).....................................................................................................7
5.0 Economics & Politics (China & USA).............................................................................................7
5.1 GDP (China)...............................................................................................................................8
...........................................................................................................................................................8
5.2 Cost Related Factors...................................................................................................................8
5.2.1 Wages Rate...........................................................................................................................8
.......................................................................................................................................................8
5.2.2 Tax Rate................................................................................................................................8
5.3 GDP (USA)................................................................................................................................9
...........................................................................................................................................................9
5.4 Cost Related Factors................................................................................................................9
5.4.1 Wages Rate...........................................................................................................................9
5.4.2 Tax Rate..............................................................................................................................10
6.0 Business Forms & Staffing............................................................................................................11
6.1 China.........................................................................................................................................11
6.1 USA...........................................................................................................................................11
7.0 Marketing Strategy........................................................................................................................11
Conclusion...........................................................................................................................................12
Recommendation.................................................................................................................................13
Reference List......................................................................................................................................14
3
1.0INTRODUCTION
Thisreportwillexaminetheopportunitiesandlimitationspresentedbyaperfume
manufacturer, Fragrance Ambrosia, entering a foreign market in the year 2022/2023, the risk
factors, long-term viability, corporate structure, political and legal situations will all be
explored and clarified. According to research, the global perfume market was expected to
growth between the range of 53$ billion in the year of 2024(Supermarketresearch 2021).
“Cision” web page (Cision 2021) has proven that the worldwide development of the COVID-
19 pandemic will have a beneficial impact on the luxury perfume market during the projected
period. Market growth in 2020 would be higher than in 2019 (Cision 2021). Perfume has
become a daily necessity in current decades, and consumer demand for perfume is increasing
day by day, both in terms of quality and brand (Supermarketresearch 2021). In addition, after
overviewing the perfume market industry in China and USA, several recommendations for
“Fragrance Ambrosia” accessing these foreign markets will be presented in the report's final
section.
2.0 Overview
2.1 China Market
Size of Fragrance
(2014-2024)
(Figure1:
Statistic)
The statistic beside
illustrates the entire
marketsizeof
fragrance
distributionin
Chinasince2014
to 2019 as well as
estimationforthe
next 5 to 6 years(Statista 2021). It indicated that the amount of perfume manufacturer is
increasing year after year(Statista 2021). To put it in another way, the barriers of entry for
fragrance market in China are higher each year(Statista 2021). However, in the year of 2019,
the fragrance product distribution industry in China generated 3.4 billion yuan in revenue
4
(Statista 2021)
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Both China and the United States would have a solid market entrance in the next few years, due to the market size and GDP statistics achieving an ideal level. Fragrance Ambrosia is a luxury product that is produced with high-cost raw materials. Before stepping into the process of business forms, it is important to conduct an estimate of expenses and probability of success, this process could be done by an accountant or financial manager.