Global Business Report 2022

Running head: GLOBAL BUSINESS
Global business
Name of the student
Name of the university
Author note

1GLOBAL BUSINESS
Executive summary
The aim of this report is to discuss about the major challenges and opportunities to be faced by
Zott in doing business in China. In doing so, analysis of the market situation and factors of China
was done and different factors are identified. In addition, the recommended business model of
Zott in China is evaluated and each of the elements was discussed. It is expected that effective
implementation of this business model will help Zott to have the maximum return on investment
from the Chinese market. This report identified that Zott will face the issue of dilemma between
the market adaptability and standardization and alignment with the changes in the market. These
issues will have impacts in the long term business viability of Zott. This report recommended
that joint venture strategy will be most effective choice of entry mode for Zott in China with low
sets of risks and higher potentiality of return. Moreover, there are multiple management issues
also to be faced by Zott in terms of marketing, production, logistics and human resource
management. These issues include cultural factors in the marketing activities, production process
and approach and recruitment process. On the basis of these challenges, there are multiple
recommendations identified in this report. It is recommended that polycentric process of staffing
should be initiated by Zott to have the proper blend of home and host country employees. In
addition, it is also recommended that logistics process should be outsourced to the external
partners to gain the specialized services and regulate cost structure.

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Table of Contents
Introduction......................................................................................................................................3
Country analysis..........................................................................................................................3
Business model analysis..................................................................................................................4
SWOT analysis................................................................................................................................7
Strengths......................................................................................................................................7
Weaknesses..................................................................................................................................8
Opportunities...............................................................................................................................8
Threats.........................................................................................................................................9
Identification of the strategic issues................................................................................................9
Determination of the entry modes strategy....................................................................................11
Directive exporting....................................................................................................................11
Foreign direct investment..........................................................................................................12
Joint venture...............................................................................................................................12
Identification of the key management issues.................................................................................13
Marketing functions...................................................................................................................13
Production and logistic function................................................................................................14
Human resource management functions....................................................................................15
Recommendations..........................................................................................................................16
Conclusion.....................................................................................................................................17

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Reference.......................................................................................................................................19

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Introduction
In the previous assignment, it is identified that Zott should enter the Chinese market for
their business expansion strategies. This is due to the reason that there are different opportunities
in terms of extensive market segments and positive growth rate are identified as the motivations
for entering the Chinese market. Zott is basically originated in Germany and is having their
operations across different countries but they are having less presence in the Asian region. On
the other hand, it was also identified in the previous assignment China is going to be the largest
market dairy market in the world in the coming years, which possess business opportunities for
Zott (Yang et al., 2013). However, it should be noted that there are multiple challenges also to be
faced by Zott in entering and operating in the Chinese market. In addition, it is also important for
Zott to have the proper internal effectiveness in gaining the maximum from the foreign market.
This report will discuss about the major issues to be faced by Zott in doing business in
the Chinese market and the business model to be followed by them. In addition, the strategic and
management issues to be faced by Zott will also be identified. The most effective and potential
market entry modes will be discussed for Zott and the strategies that they should be follow in
mitigating the same.
Country analysis
It is already identified that China will be majorly having extensive market opportunities
for Zott but there are some other factors also to be determined. According to the global economy,
it is identified that openness in trade is reducing in the case of China and when compared for the
last few years, it is identified that it is steadily going down. This might be challenging for Zott
because the lower will be the trade openness, the more will be barriers for them in trading

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between China and other countries. It is also identified that according to the International
Monetary Fund, the economic growth forecast of China will get down in the coming years. This
is another factor that should be considered by Zott in expanding their foreign business
(Douphrate et al., 2013). The strategic location of China in the Asian region will be beneficial for
Zott because they can tap the emerging markets in the South East Asian regions and the Indian
subcontinent countries from their Chinese operations. China is already having number of
competitors operating in the dairy sector including both the domestic and global brands. Thus, it
should be noted by Zott that they should initiate the differentiated approach in gaining the
competitive advantages in the Chinese business. The political scenario of China is another
important area that should be considered due to the reason that they are following communist
type of government with higher government interference in the private business affairs. For
example, Google was forced to stop their business in China due to this higher government
interference. This will also be another challenging factor for Zott in their Chinese business and
they should be competitive enough in the dealing with these (Guo, Wang & Chen, 2016).
Currently, China got indulged in the trade war with the United States and is having number of
trade related issues with the European countries. This might be challenging for Zott because the
more will be the issues like trade war, the more Zott will face the risks in investing in the
Chinese market. The risks on gaining the positive return on investment will get increased for
them (Qian et al., 2013). Hence, it can be concluded that China as a country is posing both
challenges and opportunities for the investing companies such as Zott.
Business model analysis
Business model analysis will be beneficial for Zott to design the best and most effective
business model, which will be beneficial in gaining the maximum from the Chinese market. It is