International Business: Expanding into the Chinese Market

International Business

EXECUTIVE SUMMARY
International business is defined as trade of goods, technology, capital and services across
the boundaries of a nation. In addition to this, it describes the purchasing & selling of goods as
well as services across national boundaries. In order to expand business activities, small and
medium enterprises enter into other markets as it help them to increase their level of sales and
profitability level.

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION...........................................................................................................................5
Business drivers behind company’s expansion into the given country.......................................5
PESTLE Analysis........................................................................................................................5
Trade theory: ..............................................................................................................................7
TRADE BARRIERS...................................................................................................................7
Consequences of ignoring trade barriers:....................................................................................8
Business Uncertainties and Business opportunities-...................................................................8
Importance of Corporate Social Responsibility when operating globally..................................9
Theory of ethics ..........................................................................................................................9
Importance of culture................................................................................................................10
Expansion methods to be chosen by organisation.....................................................................11
Ansoff Matrix ...........................................................................................................................11
RECOMMENDATIONS...............................................................................................................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
International business consist of all the commercial activities which take place in to
promote transfer of products, resources, ideas, technologies and services beyond national
boundaries. Business which are done beyond the national boundaries is defined as international
business. It is analysed that international business involves trading of goods as well as services
between two countries that is also termed as globalisation (Aguilera and Grøgaard, 2019). For
the present report, Fayrefield foods is taken into consideration It is an independent marketing
dairy company which was established in the year 1982. The head office of company is located in
Crewe, England. The company offered products such as cheese, butter, UHT milk and other
dairy products. The higher authorities of Fayrefield foods is planning to enter in china market by
its UHT (ultra high temperature) milk that is for children belong from age group 3 to 11 years.
The report will cover important key drivers for internationalisation and trade theories relevant to
business expansion. In addition to this, there is discussion about trade barriers associated with
expansion of business and various social as well as ethical issues undertaken by respective
organisation. Later, several internationalisation methods is describe and some recommendations
is given to the company for targeting the Chinese market. If talking about the major players of
UHT Milk Industry within the UK market areDANS Dairy Group, Regilait, MINA-MINA Dairy
Products and so on. It has also been said that consumption of milk within China rise by around
13% within the end of year 2025. in addition to this, around 60% of the China population
consumes UHT milk as compare to ordinary milk. In the marketplace of China Inner Mongolia
Yili Industrial Group is the leader as it holds around 38% market share. It is said that the top
most players within the market occupy around 74% market share (Leading UHT Milk Brands in
China, 2019). The development pace of economy as well as GDP of China is about 10% as it
says that China is developing with fastest growing rate.
Business drivers behind company’s expansion into the given country
Competition: For each and every business entity, competition is one of the major factor.
Large number of business organisation adopt business expansion in order to reduce or eliminate
the competition arise at the marketplace. Therefore, business entity requires expansion for
reducing competition.