Strategies of Gulfstream in Business Jet Market of China

Running head: GLOBAL BUSINESS MANAGEMENT
Global Business Management
Name of the Student
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Author Note

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Executive Summary
The booming economy of China and the increase in the economic abundance of the overall
population have contributed in bringing changes in the lifestyle of people across the country,
which have also been affected by factors like Globalisation, trade liberalisation and increased
industrial activities. The business jet market in the country can also be seen to be expanding
impressively with time, which in turn has brought several big companies in the market of the
country, including Gulfstream Aerospace which leads the market of the country. This paper
tries to analyse the strategies taken by the company to tap the less penetrated market in
China. As per the findings and economic analysis of the paper, the company mainly adopts
non-price competition strategy in the oligopolistic market, focussing on changing and
customising products as per the demands and preferences of the potential customers. This can
be seen to have positive impacts on the profitability and market dominance of the same.
However, in the long run, the concerned company needs to concentrate on cost efficiency,
price efficiency, targeting greater clientele and product diversification in order to sustain in
the increasingly competitive business jet market of China.

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Table of Contents
Introduction................................................................................................................................3
Business Jet Market of China.....................................................................................................4
Reasons behind increased opportunities in the business jet market of China............................6
Threats and bottlenecks in the business jet market..................................................................10
Case Study of Gulfstream in business jet in China..................................................................12
Strategies taken by Gulfstream in business jet market of China..........................................13
Economic evaluation of the strategy of Gulfstream in China..............................................14
Strengths of the strategic framework of Gulfstream in China.........................................14
Limitations of the strategic framework of Gulfstream.....................................................17
Conclusion................................................................................................................................17
References................................................................................................................................18

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Introduction
The global economic and commercial scenarios have undergone significant changes
and dynamics over the years and much of these changes can be attributed to international
phenomena of immense significance like that of Globalisation, trade and commerce
liberalisation in most of the countries, industrial progresses as well as technological and
infrastructural developments (Sassen 2014). Together, these factors have contributed in
making the global economic scenario more integrated, inclusive and intercommunicated.
With higher integration of economies across the globe and creation of what is known
as a global marketplace, increasing number of businesses from all parts of the world, can be
seen to be attempting to expand their operations and presence in previously unexplored
regions as well as new markets with less penetration, to increase their profitability, prosperity
and sustainability as well as to gain higher share of clientele and markets (Holland 2018).
This is especially true in case of the emerging or the developing economies, in the
contemporary period (like those of the Asian countries namely India, China and others),
which have been appearing as highly lucrative and potential markets for businesses across the
world, especially for the businesses and industries having their origin in the developed
countries. These businesses compete with each other with the objective of tapping the
unexplored markets of these emerging economies, taking advantage of the lifestyle and the
increasing income patterns of a major section of the population in these countries (Harrod and
O'Brien 2012).
Keeping this into consideration, the concerned report tries to explore the recently
expanding market of business jets in the emerging economy of China, thereby critically
analysing and evaluating the strategies which have been adopted by the companies, in this
industry, for the purpose of tapping the market, especially focussing on the strategies taken

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by Gulfstream, which dominates the business jet market in the concerned country (Nolan
2012). The report also tries to analyse the opportunities, bottlenecks and economic rationale
working behind the strategies taken by the concerned firm as well as the other businesses in
this domain in the concerned country. For studying the same, the concerned report refers to
the article named, Business Jet Makers Eye China, by Mike W. Peng.
Business Jet Market of China
To understand the strategies adopted by Gulfstream as well as other companies in the
business jet market of China, it is of immense importance to explore the market dynamics in
the concerned market in the country, in the recent period. The business jet market, across the
world, has been increasing impressively over the years, with the increase in the demand for
personal commutes, increase in the level of income of certain sections of people as well as
with the change in the lifestyle of population across the globe, particularly in the developed
and some emerging economies (Nolan 2012). China, in this context, can be seen to be
appearing as one of the lucrative markets for business jet companies as can be seen from the
following figure:

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Figure 1: Leading countries across the world with highest number of business jets
(2017)
(Source: Statista.com 2018)
As is evident from the above figure, the highest number of business jets can be seen to
be present in the United States of America (20978 units by 2017), followed by Brazil and
Mexico. However, as can be seen from the above figure, several emerging economies can
also be seen to be ranking amongst the leading countries in this context and China is one of
the primary ones among them (Niosi and Zhao 2013). However, the number of business jets
in China, in the contemporary period, can be seen to be considerably low than those of the of
the developed countries like United States, Canada and other. The number of business jets in
the concerned country currently can be seen to be nearly 497 (Budd 2013). However, the
market for business jets in China can be seen to be appearing as a lucrative one, in the
contemporary period, as can be shown with the help of the following figure, highlighting the
fleet breakdown in China, with respect to the size of the aircrafts:
Figure 2: Flight Breakdown by aircraft size in China
(Source: Asianskygroup.com 2018)