International Business: Expanding UHT Business in Shanghai

International Business

Contents
Contents..........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Key Business Drivers..................................................................................................................3
Trade barriers...............................................................................................................................6
Ethical and social issues..............................................................................................................7
Cultural preference to be considered by the business..................................................................9
Expansion method for market entry..........................................................................................10
Conclusion.....................................................................................................................................11
Recommendation...........................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
International business refers to the trade of good, investment, technology and selling of
good send services access the international boundaries and at a global or transnational scale. It
involves cross-border transactions of goods and services between two or more countries.
This report will cover study of UHT business UK who are producing Ultra heat treated milk for
the age group Of 3 to 11 years. now companies looking for the business expansion in Chinese
market and they will expand in particular city called Shanghai. If they are expanding their
business in China than their top competitors will be Bright Dairy, yili and Mengniu.
Overview
The UK Dairy sector plays most important role in the Uk and their possessing members plays a
vital role in the employment in the country. 24000 people are working at the processing sites in
the UK and the on the top dairy farmers produce the employment around 5000 people and more
which directly has spoilsport to the economy of the country (Buckley, Enderwick and Cross.,
2018. ). According to the figures there are around 12000 activate daily farmers who are
producing the 15 billion of lighters of the milk every year with the dairy products that worth
around the £9.2bn at the level of wholesale.
According to the figures Uk's UHT milk production has been estimated around 120
million litres and UK annual UHT consumption is approximately 240 million litres so in the UK
they consume twice as much UHT as we produce. Margins on UHT are low and it’s a product
that faces intense competition from imports and as such a number of UK based UHT plants have
closed over recent years. Furthermore, UK dairy processors don’t actually produce the formats of
flavoured milk that we consume here in the UK in any decent quantities.
The dairy sector the United Kingdom is the largest farming sector with the according of
the mild around 16.85 percent if total agriculture of the UK in years 2018 and around 50 % of the
Uk dairy sector give the outputs like fresh milk and the such account for the significance among
of the Uk processing capacity.. this shows that how this sector has grown and helping the
economy to grow.
MAIN BODY
Key Business Drivers
There are various drivers that has support to expand the UHT businesses in the Chinese market
with the improvement of the technology in the milk processing and increase the consumption a

demand of the liquid milk. The pasteurized milk market shares gradually declining where UHT
milk demand in the china is incrementing day by day and it has been rapidly capture the china
make ears with the CAGR of about 25 percent and recently corves the 60 percent of milk share
market (Sharma And et.al., 2020). This shows how the demand factors is helping the UHT
business to grow and there are very less companies who are operating their business in the China
city called (Shanghai) so it can be good opportunity for the UHT bushiness to expand their
business here are some more factors.
PESTEL Analysis
Political factors
The Chin is the most powerful countries in all over the global and they are permanent
members of the society of the Council of the United Nation. Chain has the great investment
opportunities for the international business, and they invited the business from the other
countries to open their business in their country. UHT business can get the political support to
state their business in the country and Chinese country can also have itself great reputation in
term of business. In the term of population china is the good UHT milk consumption country
which means that they will able to take entry in China country, and they will get great support
open their business in the China.
Economic factors
In term of economics growth China is performing well and all the natural resources that
are necessary for the foreign investment are available in the China will create good opportunities
for the UHT business to expand their business in the chain (Nambisan, Zahra and Luo., 2019).
The standard corporate income tax rate is 25%; however, the Chinese government reduces the
rate to 15% for qualified businesses which operate in industries encouraged by the government.
UHT bushiness will get all the resources to produce the UHT milk in the china and company will
able to expand their business effective, and they will able to take competitive advantages.
Social factors
People in the chain mostly give their children with the UHT milk as compare to the other
milk types and urbanization is one the rise in this country and over the 60 percent of the total
milk is consumed by the china people, and they like to prefer the UHT milk for the children who
a have the age between the 3 t 11 years which means the new UHT bushiness can attract the
people to buy the product and services and if UHT bushiness able satisfy the customers needs