Bacup Shoe Store: Global Business Sustainability in China

This report examines the global business strategies for Bacup Shoe Store, a UK-based shoe manufacturer, aiming to expand into the emerging Chinese market. The report begins with an abstract and table of contents, followed by an introduction outlining the company's background and objectives. The main body addresses the distinct strategies required for doing business in emerging economies, emphasizing the importance of market analysis. The report explores various business approaches, including the Five Forces model to assess the competitive environment in the Chinese footwear industry, considering factors such as bargaining power of suppliers and buyers, competitive rivalry, threat of new entrants and substitutes. Furthermore, it discusses market analysis through target product identification, cost analysis, and potential collaboration or outsourcing strategies. The report concludes with a summary of key findings and recommendations for Bacup Shoe Store's successful entry into the Chinese market. The report highlights the importance of understanding market values, per capita income, education levels, social mobility, and challenges like corruption and infrastructure, to make effective business decisions. References are also included.

Global business
sustainability
1

Abstract
Global business is determined as corporate and economic practices which are generally
take place in different nations. Through this an organisation able to cover more then one market
place which help them in increase their profitability, market shares, customer's base and goodwill
in successful manner (Amankwah-Amoah, 2016). There are several advantages which a
company may gain through global business such as help in expanding market shares, becoming
more competitive in nature and reduce cost and many more. There are different methods through
which an organisation can adopt global business such as importing and exporting practices,
licensing, foreign direct investment, franchising and so on (Galea, 2017). Bacup Shoe Store want
to conduct their or expand their business in emerging economy like China and for that they can
conducting market and industry analysis through several topics. There are several strategies
which are involved in conducting business in effective manner and that can be distinct from
other international venues such as in respect of respect of respective company in order to conduct
business at China (Hitt, Li and Xu, 2016).
That will include analysis of characteristics which make emerging market attractive as
well as they also need to understand about market value of emerging market of shoe industry
because that will help them in developing proper decision related to business approach (Cho and
et. al., 2015). Business approach include different model like five forces model because that will
help in evaluating competitive environment at the marketplace. Along with this they also need to
conduct market analysis on the basis of Target products and Analyses cost as well as they also
determine challenges and risk which are include in conducting business. Moreover there are
several other factors which are necessary to be considered by Bacup Shoe Store in order to
conduct their work in effective as well as efficient manner. This will include market evlaution
through different factors like assess per capita income, understand level of education of
customers, social mobility and so on. Through this respective company able to conduct their
work in effective manner as well as they also able to expand or run their business at the emerging
economy in successfully manner. In addition to this firm also need to check challenges and risk
of different factors like corruption, infrastructure and different types of business. This is so
because it will also help in taking effective decision in successful manner.
2

Table of Contents
Abstract ..........................................................................................................................................2
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
1. Doing business in emerging economies involves strategies that are often distinct from those
of other international venues. What types of business approach would a firm use when doing
business in these regions?.......................................................................................................4
CONCLUSION..............................................................................................................................10
REFRENCES.................................................................................................................................11
3

INTRODUCTION
Global business is considered as activities which are related to corporate or economic as
well as these activities are take place across the several different countries. Through this an
organisation able to gain numbers of benefits such as expand business, increase customer's base,
enhance profitability ratio, market shares and many more (Kennedy, 2017). Organization
selected for this assignment is Bacup Shoe company which is founded by Ernst Goodwin in
1928. Its head office is located in Lancashire, England. It is shoes manufacturing company
whose supplies are based at China market which is emerging economy country. This firm want
to expand its business at the international market for which they are conducting analysis. Topics
included in this report are different types of business approach firm may adopt while expanding
business. While explaining this aspect different theories, model and evaluation factors are
defines through which respective company management can take effective decision for running
business at emerging economy like China.
MAIN BODY
1. Doing business in emerging economies involves strategies that are often distinct from those of
other international venues. What types of business approach would a firm use when doing
business in these regions?
Economy of a country is denoted by different levels i.e. developed, developing and
emerging economies. Developed economy are those countries which have strong characteristics
of a developed nation that have high level of economic growth as well as security such as United
Kingdom, Japan, South Korea and so on. Developing economy related to those nations which
have less developed industry as well as they have low human development index in comparison
to other nations such as Turkey, Philippines, Mexico, Malaysia and so on (Kiron and et. al.,
2015). Moreover emerging economy refers to market which have few characteristics of
developed nation or market, but these nation not meet its whole standard such as South Africa,
China, Iran, Poland. India and many more. There are several factors which makes emerging
economy attractive from which some are mentioned below:- Potential for growth: Emerging economy have character of potential growth that they
provide huge opportunities to companies so that they can boost or expand their business
successfully in respective market. Respective economy also provide effective reward for
4

investors in order to do ground level research properly which lead to rapid growth of
business. Brisk economic growth: Emerging nations get wide opportunities to grow their economy
as compare to other developed countries. Such as according to research in 2018 economic
growth of developed nations was minimum than 3 percent such as Japan, United State,
Germany and so on (Lau, 2019). Whereas emerging economic or nation like China,
Malaysia, Egypt, India and many other enhance its economy from 4 to 7 percent which is
higher than developed nations ratio.
 Provide high growth opportunity: Emerging nation also provide grow as well as
employment opportunities for people at local, national and international level. This will
directly or indirectly help in growing or boosting economy of nation as well as they also
provide opportunities to business to attract more and more investors towards their
business.
Market value of emerging market
China is one of the largest footwear manufacturer at the global level as well as they also
supply their products at the different nation around the world. Respective nation industry include
different types of shoes such as textile shoes, rubber shoes, leather shoes as well as plastics
shoes. Footwear industry is one of the fastest growing sector in china, in 2016 total sales of
respective sector is near about US$56.7 billion and industry is growing continuously so that it is
expected that footwear industry will increase their sales by more than 7 percent till 2020
(Footwear Manufacturing Industry in China - Market Research Report, 2020). China also export
their products to numbers of countries such as Germany, United Kingdom, France, USA and
Italy.
Business approach refers to strategies and action plans which are adopted by a company
in order to conduct their business operations and function at emerging economies in effective
manner (Mateescu, Lange and Bastian, 2015). There are several different business approaches
which a firm can adopt in order to conduct business at the emerging economies, from which
some of the main approaches which can be adopted by Bacup Shoe company while conducting
business at China market are given below:-
 Conduct analysis through Five Forces model
5

Five Forces model is considered as framework which is adopted by a company in order to
understand competitive market in respect of its business. Through this firm management able to
determine its competitors at the potential marketplace which help them in developing effective
decision according to the situation. There are main five factors in respective model, which are
explain below in respect of Bacup Shoe company and footwear industry at the China market:- Bargaining power of suppliers: At China market bargaining power of suppliers is too
high specially in footwear industry. This nation is also know as low cos labour, huge
numbers of factories, thousands of facilities, abundant material and so on as well as
China is biggest exporter in shoes industry (Mocan and et. al., 2016). So in respect of
Bacup Shoe Company, they may face high bargaining power of buyers and according to
that suppliers can demand for huge among of funds for less quantity products. Bargaining power of buyers: In China bargaining power of customers is high because
they have both domestics as well as international shoe brand. Along with this, buyers also
have wide range of options in marketplace as well as they can select product according to
their budget and need. In respect of Bacup Shoe Company, bargaining power of buyers is
high because at China market there are already numbers of local as well as international
are operating. Competitive rivalry: In China market competitive rivalry is high specially in footwear
industry because there are plenty of firm operating in similar sectors and they are
qualified in production of fashion as well as basic shoes. Due to which customers get
wide numbers of options shoes at marketplace. In respect of Bacup Shoe Company they
will also faced high competitive rivalry because there are numbers of domestics as well
as international companies operating in similar industry. Threat of new entry and exit: At China market there are numbers of international
companies as well as branded firm are conducting their business in footwear industry. At
respective nation there is high taxation for specific goods especially first level, luxury and
second level brands (Peattie, 2016). In respect of Footwear industry China export more as
compare to they import, due to which new entry and exit at respect market is not too high
or less, it is moderate in nature. So it will be effective situations for Bacup Shoe
Company to conduct their business effectively at the respective marketplace.
6

 Threat of Substitutes: At China market threat of substitutes products is high because
there are numbers of companies operating in footwear industry. In China need and
requirement of customers can be fulfil by domestic companies of footwear as well as they
buyer also have options of foreign brands. So in respect of Bacup Shoe Company they
face high threat of substitutes from both local as well as international brands so it is
essential for their management to develop decision accordingly. Manufacturing bases
◦ Target products- It is one of the main factor of market analysis in which company
need to conduct analysis in order to determine need and requirement of customers
(Peng, 2016). This is so because that will help them in developing effective decision
according to the requirement as well as it will also lead to increase in sales. In respect
of Bacup Shoe Company it is essential for them to conduct market analysis in order to
understand requirement China market because through that they able to determine
and design targeted products or shoes successfully.
◦ Analyses cost- It is also necessary for a company to determine cost of products and
services at which they will offer to their potential customers. In order to this it is
essential for firm to understand economic conduction of nation as well as targeted
audiences because that help in developing decision related to cost. In respect of
Bacup Shoe Company it is essential for them to conduct market analysis in order to
analyse cost because through that they can set price of shoes according to economic
condition of their targeted audiences at China market.
◦ M&A/ FDI/ Collaboration: FDI or Collaboration is the agreement between two or
more companies with an aim of mutual benefit. So in respect of Bacup Shoe Store it
is option for them to conduct collaboration to other shoe manufacturing companies in
order to expand their business level in effective manner. This will also help them in
increasing their customer's base at different locations.
◦ OEM or Outsourcing destinations: Outsourcing is described as an agreement which
consider the involvement of third parties as it help businesses to reduce its cost
(Rezaee, 2016). Therefore, it help to improve the productivity and efficiency of an
organisation. In respect of respective company they can conduct partnership with
other shoes manufacturing companies as that will help them in manufacturing more
7

shoes with quality material and attractive designs by using advance technology. This
will directly help firm in gaining high profitability ratio at the market place. Market
◦ Assess per capital income: It is a measure of the amount of money earned by per
person to evaluate the standard of living and quality of life of population. It count
each and every individuals such as adults, child and so on who live under the same
roof (Sambhanthan and Potdar, 2017). In respect of Bacup Shoe Store it is essential
for them to evaluate market on the basis of respective aspect because through that
they able to determine China economy as well as purchasing power of audiences in
effective manner. This will also help them in developing effective decision according
to per capital income of targeted customers.
◦ Size of middle class and spending power: The increasing purchasing power and
influence of social media has promote the growth and almost half of the economy
accounts for middle class. So it will be opportunity for Bacup shoe store to conduct
their advertisement and promotional activities through social media because by it they
able to cover huge numbers of target and potential audiences. For this firm need to
conduct market analysis of China because through that they can know which social
media are more famous and used by respective place audiences. This will also help
them in determining China market spending power which lead to estimation of sales
properly.
◦ Level of education: It is determine as factors which denote the education level of
customers because through it help in determining perspective of audiences towards
the particular products and services. In respect of Bacup Shoe Store it is essential for
them to understand level of education of their customers because through that they
can identify perspective of customers towards their shoes design, quality and price.
◦ Social mobility: It consist of movement of individuals, family and households and
indulge a change in social status from one status to another (Whelan and Fink, 2016).
In respect of respective company it is essential for them to understand their potential
customers social mobility because that will help firm's shoes designer in designing
products. That will also based on the customer's need, demand and preference which
help in increasing sales and profitability of company.
8

 Challenge Vs Risk
◦ Political instability- At every nation there is political instability which directly or
indirectly impact on business activities and operations so it is essential for firm to
conduct proper analysis of this (Pérez and et. al., 2017). In respect of Bacup Shoe
Company it is essential for them to do analysis of political situation of China market
because through that they able to determine challenges as well as risk which help in
developing strategies accordingly and effectively.
◦ Intellectual property- It is essential for companies to develop understand of
intellectual property because through that they able to protect their products and
services form beings copied. Along with this, different countries have different
intellectual property options and rules, according to which company need to adopt
according to their operations. In respect of Bacup Shoe Company, it is essential for
them to determine different options of intellectual property as well as they also need
to identify its benefits, challenges and risk because that will help in developing
effective decision.
◦ Corruption: It is fraudulent conduct by an organisation in order to abuse power for
private gain and it also results in misuse of power for various purposes by wining the
favour. In respect of Bacup Shoe Store they are conducting business at international
level as well as they also conduct import and export activities at the wide level. So
their will be high change that respective company face corruption situation while
conducting business. In order to avoid this situation it is essential for respective firm
management to conduct evaluating as that will help in determining challenges and
risk associated to that.
◦ Infrastructure: Infrastructure advancement is considered as the most important part
for a country that includes roads, railways, power, airports and so on. It also provide
employment opportunities to large number of rural people and thus promote the
prosperity of nation (Mateescu, Lange and Bastian, 2015). It is essential for Bacup
shoe store to consider respective factors and conduct its analysis for determining
challenges and risk associated to it. This is so because through it respective company
management able to develop effective infrastructure which help them in attracting
more and more customers towards their shoes. According to this management of
9

Bacup Shoe store also need to determine mode of transportation because accordingly
they can develop strategies and budget.
◦ Family oriented business: The family oriented business tends to sell products or
services to provide benefit to all the members of modern family. The main focus is to
provide concern towards the welfare of employees to increase job satisfaction and
inculcate confidence and determination among them (Whelan and Fink, 2016). Bacup
shoe company is operating its business at the international market and for them it is
essential to determine challenges and risk associated with family oriented business
because accordingly they can develop strategies and action plan.
By developing and conducting all these activities Bacup Shoe Company able to
effectively operate in China which is emerging economic. Moreover, it will also help respective
company in conducting their business operations and functions effectively at emerging market by
grabbing opportunities. This will also help them in identifying challenges and risk effectively
accordingly to that management can develop effective strategies and action plan.
CONCLUSION
From above discussed point it can be summarised that there are different types of
economy i.e. developed, developing and emerging economic, this will be decided on the basis of
growth and economy level of nations. From all these types nations, emerging economy offer
wide range of opportunities which help companies in operating their business effectively and
successfully. Moreover in order to operate in emerging nation a company need to conduct
several analysis related to market, challenges and risk as well as they also need to adopt model
like five forces model in order to understand about competitive market. There are also several
factors which are essential to be considered by companies who want to expand or run their
business at the emerging market. In respect of this management may also adopt different model
such as five force model because through that they able to conduct know about competitive
environment. This will help in developing effective decision which directly lead to growth of
business successfully. There are also several factors which are necessary to be considered such
as market analysis, identification of challenges and risk and many more.
10

REFRENCES
Books and Journals
Amankwah-Amoah, J., 2016. Global business and emerging economies: Towards a new
perspective on the effects of e-waste. Technological Forecasting and Social
Change. 105. pp.20-26.
Cho, C. H. and et. al., 2015. Organized hypocrisy, organizational façades, and sustainability
reporting. Accounting, Organizations and Society. 40. pp.78-94.
Dyllick, T. and Muff, K., 2016. Clarifying the meaning of sustainable business: Introducing a
typology from business-as-usual to true business sustainability. Organization &
Environment. 29(2). pp.156-174.
Galea, C. ed., 2017. Teaching business sustainability: From theory to practice. Routledge.
Hitt, M. A., Li, D. and Xu, K., 2016. International strategy: From local to global and
beyond. Journal of World Business. 51(1). pp.58-73.
Kennedy, H., 2017. The role of business sustainability in human resource management: A study
on Indian manufacturing companies. The South East Asian Journal of Management.
Kiron, D. and et. al., 2015. Joining forces: Collaboration and leadership for sustainability. MIT
Sloan Management Review. 56(3). pp.1-31.
Lau, C. K., 2019. The economic consequences of business sustainability initiatives. Asia Pacific
Journal of Management. 36(4). pp.937-970.
Mateescu, R. M., Lange, S. and Bastian, H., 2015. The Role of Process Interactions Management
in Ensuring Business Sustainability. Ovidius University Annals, Series Economic
Sciences. 15(2).
Mocan, B. and et. al., 2016. From intuitive programming of robotic systems to business
sustainability of manufacturing SMEs. Amfiteatru Economic Journal. 18(41). pp.215-
231.
Peattie, K., 2016. Green marketing. In The marketing book(pp. 595-619). Routledge.
Peng, M. W., 2016. Global business. Cengage learning.
Pérez, C. Á. and et. al., 2017. Integration of balanced scorecard (BSC), strategy map, and fuzzy
analytic hierarchy process (FAHP) for a sustainability business framework: a case study
of a Spanish software factory in the financial sector. Sustainability. 9(4). p.527.
Rezaee, Z., 2016. Business sustainability research: A theoretical and integrated
perspective. Journal of Accounting Literature. 36. pp.48-64.
Sambhanthan, A. and Potdar, V., 2017. A study of the parameters impacting sustainability in
information technology organizations. International Journal of Knowledge-Based
Organizations (IJKBO). 7(3). pp.27-39.
Whelan, T. and Fink, C., 2016. The comprehensive business case for sustainability. Harvard
Business Review. 21. pp.1-12.
Online
Footwear Manufacturing Industry in China - Market Research Report. 2020. [Online]. Available
through: <https://www.ibisworld.com/china/market-research-reports/footwear-
manufacturing-industry/>.
11