International Business: Expanding into the Chinese Market
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This report discusses the importance of the international market and the considerations for expanding a UK SME company into the Chinese market. It covers business drivers, trade barriers, ethical and social issues, and cultural preferences. The report also highlights various expansion methods for entering the Chinese market.
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Table of Contents
Executive summary..........................................................................................................................1
Introduction......................................................................................................................................2
Main Body.......................................................................................................................................2
Business drivers behind business expansion to the Chinese market......................................3
Trade barriers..........................................................................................................................6
Various ethical and social issues to be considered by the company......................................6
Cultural preferences to be considered by the UK SME company..........................................7
Various expansion methods to be taken into consideration by the company.........................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
Executive summary..........................................................................................................................1
Introduction......................................................................................................................................2
Main Body.......................................................................................................................................2
Business drivers behind business expansion to the Chinese market......................................3
Trade barriers..........................................................................................................................6
Various ethical and social issues to be considered by the company......................................6
Cultural preferences to be considered by the UK SME company..........................................7
Various expansion methods to be taken into consideration by the company.........................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
Executive summary
The international market plays an important role in enhancing the market size of the business
(What is international business, 2019), it allows business to have wider scope for the purchase
and sell of their goods and services effectively. The international market is an growing business
activity where in order to gain the wider market size and increase their customer base every
second local business is going internationally. It helps business to increase their sale and
profitability and also to gain competitive advantage in the marketplace. This report emphasis on
the importance of the international market and what all preferences and issues needed to be taken
into consideration before expanding UK SME into international market like trade barriers or
social and ethical issues and also the cultural preferences needed to be considered by the
business. And also the importance of business drivers plays in the expansions of the business to
the global market. There are number of expansion methods available for the business to tap into
the new market as heighted in this report.
1
The international market plays an important role in enhancing the market size of the business
(What is international business, 2019), it allows business to have wider scope for the purchase
and sell of their goods and services effectively. The international market is an growing business
activity where in order to gain the wider market size and increase their customer base every
second local business is going internationally. It helps business to increase their sale and
profitability and also to gain competitive advantage in the marketplace. This report emphasis on
the importance of the international market and what all preferences and issues needed to be taken
into consideration before expanding UK SME into international market like trade barriers or
social and ethical issues and also the cultural preferences needed to be considered by the
business. And also the importance of business drivers plays in the expansions of the business to
the global market. There are number of expansion methods available for the business to tap into
the new market as heighted in this report.
1
Introduction
International business is defined as the process of managing and carrying out all the
business activities like buying and selling of goods and services beyond national boundaries. It
involves doing all the business and marketing activities at the international level which leads to
enhancing the market size of the business and also help them to gain competitive advantage in
the market, with increasing competition in order to survive and grow all the local business are
going international (Advantages of international business, 2019). For this report Meadow Dairy
which is an UK SME company is taken into consideration. The Meadow dairy is an one of the
UK SME company located in London, United Kingdom. Company is planning to enter into the
Chinese market for their UHT milk for children aged from 3-11 years, business is focused on
specific target audience. This report covers detailed description of the industry background in
milk products and the business drivers with factors influencing from the external environments
and also the various trade barriers that needs to be considered by the company. In addition to this
the ethical and social issues also the cultural preferences that needs to be considered by the UK
SME is also highlighted in this report. Furthermore the various expansion methods can be
considered by the company is also explained in this report (Arvidsson and Arvidsson, 2019).
Main Body
The industry analysis is a process of analysing and evaluating the opportunities or
challenges prevailing an particular industry, the industry analysis allow business to understand
the level of competition available in a particular industry and formulate his strategy in order to
effectively handle the issues prevailing in an industry (Industry analysis, 2019). The industry
analysis of the UK shows that they are focusing on increasing their business world widely. It is
also analysed that UK is the eleventh largest manufacturer the dairy around the globe. The
country’s milk productions nearly account for around 17% of the overall agriculture output. The
dairy sector is the UK biggest farming sector around the worlds producing large amount of milk
(Brenkert, 2019).
.
2
International business is defined as the process of managing and carrying out all the
business activities like buying and selling of goods and services beyond national boundaries. It
involves doing all the business and marketing activities at the international level which leads to
enhancing the market size of the business and also help them to gain competitive advantage in
the market, with increasing competition in order to survive and grow all the local business are
going international (Advantages of international business, 2019). For this report Meadow Dairy
which is an UK SME company is taken into consideration. The Meadow dairy is an one of the
UK SME company located in London, United Kingdom. Company is planning to enter into the
Chinese market for their UHT milk for children aged from 3-11 years, business is focused on
specific target audience. This report covers detailed description of the industry background in
milk products and the business drivers with factors influencing from the external environments
and also the various trade barriers that needs to be considered by the company. In addition to this
the ethical and social issues also the cultural preferences that needs to be considered by the UK
SME is also highlighted in this report. Furthermore the various expansion methods can be
considered by the company is also explained in this report (Arvidsson and Arvidsson, 2019).
Main Body
The industry analysis is a process of analysing and evaluating the opportunities or
challenges prevailing an particular industry, the industry analysis allow business to understand
the level of competition available in a particular industry and formulate his strategy in order to
effectively handle the issues prevailing in an industry (Industry analysis, 2019). The industry
analysis of the UK shows that they are focusing on increasing their business world widely. It is
also analysed that UK is the eleventh largest manufacturer the dairy around the globe. The
country’s milk productions nearly account for around 17% of the overall agriculture output. The
dairy sector is the UK biggest farming sector around the worlds producing large amount of milk
(Brenkert, 2019).
.
2
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(UK Industry Analysis, 2018)
Main producer of the dairy industry are the small scale business, as shown above the UK
market trend, UK has the largest number of small scale business around 99.3% is bigger than any
other sector in the UK largely contributing towards the growth of the economy. For this report
Meadow dairy this is an UK Small scale business. The Meadow dairy is located in the London,
UK. The company is planning to expand their business to the Chinese market for their UHT
milks business (Capello and Nijkamp, 2019). In order to effectively expand their business into
the Chinese market company needs to take certain points into consideration which are discussed
below.
Business drivers behind business expansion to the Chinese market.
Business drivers are defined as the resources or the activity essential for the growth and
success of the business in the marketplace, these are the elements such as the internal or external
factors that have direct influence of the functioning of the business, and they also impact the
overall performance of the organisation (Bashir and Farooq, 2019). In order to enhance the
performance of the business they needs to be properly analysed and evaluated by the
organisation (Clevenger and MacGregor, 2019). In context to the UK SEM Meadow dairy the
business drivers behind the expansion to the Chinese market are discussed below:
PESTEL Analysis: It is one of the essential marketing tool used by the marketer to
analyse the external factors which directly influence the functioning of the business, there are
number of external forces which can affect the performance and profitability of a business. The
PESTEL stands for political, economical, social, technological, economical and legal which are
3
Main producer of the dairy industry are the small scale business, as shown above the UK
market trend, UK has the largest number of small scale business around 99.3% is bigger than any
other sector in the UK largely contributing towards the growth of the economy. For this report
Meadow dairy this is an UK Small scale business. The Meadow dairy is located in the London,
UK. The company is planning to expand their business to the Chinese market for their UHT
milks business (Capello and Nijkamp, 2019). In order to effectively expand their business into
the Chinese market company needs to take certain points into consideration which are discussed
below.
Business drivers behind business expansion to the Chinese market.
Business drivers are defined as the resources or the activity essential for the growth and
success of the business in the marketplace, these are the elements such as the internal or external
factors that have direct influence of the functioning of the business, and they also impact the
overall performance of the organisation (Bashir and Farooq, 2019). In order to enhance the
performance of the business they needs to be properly analysed and evaluated by the
organisation (Clevenger and MacGregor, 2019). In context to the UK SEM Meadow dairy the
business drivers behind the expansion to the Chinese market are discussed below:
PESTEL Analysis: It is one of the essential marketing tool used by the marketer to
analyse the external factors which directly influence the functioning of the business, there are
number of external forces which can affect the performance and profitability of a business. The
PESTEL stands for political, economical, social, technological, economical and legal which are
3
needed to be considered by the company while expanding into Chinese market as discussed
below:
(PESTEL ANALYSIS OF CHINESE MARKET)
Political factors: The political factors includes all the government policies which directly
influence the functioning of the business, any kind of instability in the political environment will
affect the business environment and vice versa (Haak-Saheem and Festing, 2020). China is
considered to be the powerful country, country’s political factors like government regulations
and policies needed to be considered by the UK SEM milk company in order to carry out their
business activity smoothly and effectively (Brown, 2018).
Economical factors: This factors includes factors like economic growth, exchange rate,
interest rate, spending income of the consumers, inflation rate, these factors can affect the
company directly or indirectly. Any kind fluctuation in these factors can affect the functioning of
the business, china has the second largest economy globally, and also biggest economy of the
4
below:
(PESTEL ANALYSIS OF CHINESE MARKET)
Political factors: The political factors includes all the government policies which directly
influence the functioning of the business, any kind of instability in the political environment will
affect the business environment and vice versa (Haak-Saheem and Festing, 2020). China is
considered to be the powerful country, country’s political factors like government regulations
and policies needed to be considered by the UK SEM milk company in order to carry out their
business activity smoothly and effectively (Brown, 2018).
Economical factors: This factors includes factors like economic growth, exchange rate,
interest rate, spending income of the consumers, inflation rate, these factors can affect the
company directly or indirectly. Any kind fluctuation in these factors can affect the functioning of
the business, china has the second largest economy globally, and also biggest economy of the
4
buying basis, this will influence Dairy company positively and will allow them to grow and
develop themselves effectively (Jafari-Sadeghi, 2020).
Social factors: The social factors includes the demographic norms, characteristics, values
of the populations prevailing in the environment under which the company functions, the social
factors are one of the essential factor for the china, as the country values their norms and culture
very effectively, so for UK SEM milk company planning to expand their business in the Chinese
market this factor needs to be considered effectively, company needs to ensure that no action is
taken against the norms and culture of the country (Cortez and Johnston, 2018).
Technological factors: Any kind of advancement or innovation in the technology which
can influence the functioning of the business, china is one of the top technological developed
country which will help UK SME company to enhance their technological factor but company
needs to be aware of the fact that business to customers industry of the china does not have a
very safe and secure online payment option as they believes in the traditional forms and offline
payments.
Environmental factors: The another kind of factors includes the climate of the
environmental changes that effects the business directly or indirectly, each and every business
has responsibility towards sustainability of the environment, with increasing economic
development of the china leads to the impacting their environment. Certain actions are taken in
order to sustain the environment (Kaiser and Kirton, 2019). The UK SME milk company needs
to ensure that they are effectively contributing towards the effective sustainability of the
environment and the climate.
Legal factors: The laws or legislation of the country that are needed to be followed by
each and every individual of the country, the strict laws or rules and regulations can create
unfavourable environment for the company (de Sousa Jabbour, 2019). China has number of rules
and laws in order to control the businesses and the employment practices in the country. In case
of UK SME, company needs to consider the necessary legal factors needed to be followed for the
smooth functioning of the work.
For the UK SME milk to successfully expand their business into the Chinese market for
their UHT milk for particular age group, business needs to consider the above external factors
before entering into the market, and take corrective actions if required (Li, J and Qian, 2019).
5
develop themselves effectively (Jafari-Sadeghi, 2020).
Social factors: The social factors includes the demographic norms, characteristics, values
of the populations prevailing in the environment under which the company functions, the social
factors are one of the essential factor for the china, as the country values their norms and culture
very effectively, so for UK SEM milk company planning to expand their business in the Chinese
market this factor needs to be considered effectively, company needs to ensure that no action is
taken against the norms and culture of the country (Cortez and Johnston, 2018).
Technological factors: Any kind of advancement or innovation in the technology which
can influence the functioning of the business, china is one of the top technological developed
country which will help UK SME company to enhance their technological factor but company
needs to be aware of the fact that business to customers industry of the china does not have a
very safe and secure online payment option as they believes in the traditional forms and offline
payments.
Environmental factors: The another kind of factors includes the climate of the
environmental changes that effects the business directly or indirectly, each and every business
has responsibility towards sustainability of the environment, with increasing economic
development of the china leads to the impacting their environment. Certain actions are taken in
order to sustain the environment (Kaiser and Kirton, 2019). The UK SME milk company needs
to ensure that they are effectively contributing towards the effective sustainability of the
environment and the climate.
Legal factors: The laws or legislation of the country that are needed to be followed by
each and every individual of the country, the strict laws or rules and regulations can create
unfavourable environment for the company (de Sousa Jabbour, 2019). China has number of rules
and laws in order to control the businesses and the employment practices in the country. In case
of UK SME, company needs to consider the necessary legal factors needed to be followed for the
smooth functioning of the work.
For the UK SME milk to successfully expand their business into the Chinese market for
their UHT milk for particular age group, business needs to consider the above external factors
before entering into the market, and take corrective actions if required (Li, J and Qian, 2019).
5
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Trade barriers
Trade barriers are the restriction imposed by the government regulator of the country in
order to control the import or export of goods and services in that country (Kim and Pyun, 2018),
but certain policies creates barrier for the trade. In context to the UK SME Meadow dairy, certain
trade barriers that can be faced by the company while taping into the Chinese market are
discussed below:
Tariff barriers: One of the trade barriers that can be faced by the company are the tariff
barriers, these the tax policy imposed by the government on the import of goods and services, it
enables in increasing the price of the important goods making a barrier for the importers.
Non tariff barriers: Another barrier is the non tariff barriers, these are the barrier strict
rules and regulations which create more difficult barrier for the trade, and these are the rules and
regulations imposed by the government.
Quotas: The quotas are another barriers of trade under this the quotas are imposed on the
quality of goods and services which are imported by the country so as to improve the price of
goods and services of the market.
Voluntary Export Restraints: This is defined as the kind of agreement between the
exporting and importing country in order to restrict the quantity of goods and services that is
needed to be imported or exported by them. These kind of agreement creates barrier for the trade
(Luo and Bu, 2018).
From the above discussion it can be concluded that for Meadow dairy UK SME, in order
top tap into the Chinese market effectively company needs to effectively consider all the above
trade barriers which can create challenge for the company, smooth expansion into the Chinese
market the following trade barriers needs to be effectively considered by the company.
Various ethical and social issues to be considered by the company.
The various ethical and social issues that are needed to be taken into consideration by the
Meadow dairy UK SME company in order to expand their business into the Chinese market are
discussed below:
Corporate social responsibility: Each and every business has some responsibility towards
the society and which is needed to be carried out by each and every corporate entity effectively.
It is one of the essential function and responsibility of every organisation to effectively work
6
Trade barriers are the restriction imposed by the government regulator of the country in
order to control the import or export of goods and services in that country (Kim and Pyun, 2018),
but certain policies creates barrier for the trade. In context to the UK SME Meadow dairy, certain
trade barriers that can be faced by the company while taping into the Chinese market are
discussed below:
Tariff barriers: One of the trade barriers that can be faced by the company are the tariff
barriers, these the tax policy imposed by the government on the import of goods and services, it
enables in increasing the price of the important goods making a barrier for the importers.
Non tariff barriers: Another barrier is the non tariff barriers, these are the barrier strict
rules and regulations which create more difficult barrier for the trade, and these are the rules and
regulations imposed by the government.
Quotas: The quotas are another barriers of trade under this the quotas are imposed on the
quality of goods and services which are imported by the country so as to improve the price of
goods and services of the market.
Voluntary Export Restraints: This is defined as the kind of agreement between the
exporting and importing country in order to restrict the quantity of goods and services that is
needed to be imported or exported by them. These kind of agreement creates barrier for the trade
(Luo and Bu, 2018).
From the above discussion it can be concluded that for Meadow dairy UK SME, in order
top tap into the Chinese market effectively company needs to effectively consider all the above
trade barriers which can create challenge for the company, smooth expansion into the Chinese
market the following trade barriers needs to be effectively considered by the company.
Various ethical and social issues to be considered by the company.
The various ethical and social issues that are needed to be taken into consideration by the
Meadow dairy UK SME company in order to expand their business into the Chinese market are
discussed below:
Corporate social responsibility: Each and every business has some responsibility towards
the society and which is needed to be carried out by each and every corporate entity effectively.
It is one of the essential function and responsibility of every organisation to effectively work
6
towards the welfare of the society and environment. for an company expanding into Chinese
market these issue need to be at their top most priority (Maxfield and Schneider, 2019).
Health and safety at workplace: another issue that needs to be considered by the
company is the health and safety of the workers at the workplace, the employees needs to feel
secure at the workplace, ensuring health and safety of the workers leads to motivating them
towards achieving targeted goals and objectives. In context the UK SME company, the health
and safety of the workers needed to be ensured, company needs to ensure that employees are
provided with safe and secure environment at the workplace
Discrimination at workplace: This issue can lead to de-motivating employees at the
workplace, no kind of discrimination should be done with the employees, the company needs to
enforce required laws and act in order to avoid any kind of discrimination at the workplace, each
and every individual at the workplace should be treated equally and fairly (Lel, 2019). The UK
SME company needs to ensure that there is no kind of discrimination among employees is
promoted at the workplace and proper actions are taken to avoid it.
Cultural diversity at workplace: The international business includes working with
different kind of culture, it involves diversity of culture. Dealing with different employees of
different culture can create issue for the company, which is needed to be considered by the
company. Diverse culture should be promoted by the company. In case of UK SME company
planning to tap Chinese market this issue needs to be careful considered by the company in order
to improve their performance effectively as Chinese culture is different any while tapping into
different proper analysis should be done by business.
Privacy and confidentiality of the employees: Another issue that needs to be considered
by the company is the privacy and confidentiality of the employees, company needs to ensure
that the privacy and confidentiality of the employees is effectively secured in order to motivate
them towards performing better. In case of UK SME Milk Company needs to ensure that this
issue is effectively tackled by them to enhance their performance and promote healthy work
culture in the organisation (Muldoon 2018).
Cultural preferences to be considered by the UK SME company.
The term culture is defined as the shared values, norms and beliefs of an individual or the
company, each individual has their own culture even each country has their own set of values
culture which defines a country’s overall image (Luo and Tung, 2018). While doing international
7
market these issue need to be at their top most priority (Maxfield and Schneider, 2019).
Health and safety at workplace: another issue that needs to be considered by the
company is the health and safety of the workers at the workplace, the employees needs to feel
secure at the workplace, ensuring health and safety of the workers leads to motivating them
towards achieving targeted goals and objectives. In context the UK SME company, the health
and safety of the workers needed to be ensured, company needs to ensure that employees are
provided with safe and secure environment at the workplace
Discrimination at workplace: This issue can lead to de-motivating employees at the
workplace, no kind of discrimination should be done with the employees, the company needs to
enforce required laws and act in order to avoid any kind of discrimination at the workplace, each
and every individual at the workplace should be treated equally and fairly (Lel, 2019). The UK
SME company needs to ensure that there is no kind of discrimination among employees is
promoted at the workplace and proper actions are taken to avoid it.
Cultural diversity at workplace: The international business includes working with
different kind of culture, it involves diversity of culture. Dealing with different employees of
different culture can create issue for the company, which is needed to be considered by the
company. Diverse culture should be promoted by the company. In case of UK SME company
planning to tap Chinese market this issue needs to be careful considered by the company in order
to improve their performance effectively as Chinese culture is different any while tapping into
different proper analysis should be done by business.
Privacy and confidentiality of the employees: Another issue that needs to be considered
by the company is the privacy and confidentiality of the employees, company needs to ensure
that the privacy and confidentiality of the employees is effectively secured in order to motivate
them towards performing better. In case of UK SME Milk Company needs to ensure that this
issue is effectively tackled by them to enhance their performance and promote healthy work
culture in the organisation (Muldoon 2018).
Cultural preferences to be considered by the UK SME company.
The term culture is defined as the shared values, norms and beliefs of an individual or the
company, each individual has their own culture even each country has their own set of values
culture which defines a country’s overall image (Luo and Tung, 2018). While doing international
7
business or when company planning to expand their business into the international market the
cultural preferences becomes one of the essential factor to be considered by the organisation, as
the cultural preferences has direct or indirect influence of the functioning of the business that is
the reason it becomes important for them to promote the diverse culture. In case of the UK SME
Meadow dairy company which is planning to expand their business into the Chinese market for
their UHT milk for the children aged from 3-11 years the cultural preference of the china is very
essential for the company. Chinese culture is one of the oldest culture, the businesses in teh china
are greatly influenced by the Confucianism which means the building relationship network based
on the various factors like values, loyalty, modesty and honesty. The people of china respects
and value the relationship and highly believe in building strong and honest relationship, they also
look for building long term relationship and create mutual trust and strong relationship rather
than any kind of negotiation or agreements. In china the disbelieve and notion often is licked
with the outsiders, one of the most essential way to build the relationship is to embrace an
mediator in the activities. The china is an developing economy undergoing many changes
(Savicki, 2020).
The cultural preference will help company to understand the culture of a target country and
the factors that are needed to be considered by the company while dealing with the cultural
diversity it will also help in enhancing the performance of the company and improving their
brand image among the targeted customers. The china is mainly the relationship oriented country
where the relationship is given the top most priority also the company needs to understand before
expanding into the Chinese market that the Chinese people value the collectivism as the
prevailing culture is the collectivist oriented, they are the most cooperative within their own
group they value their own group the most (Wang and Li, 2019). It is analysed that the just like
the economy the Chinese culture is also developing effectively. One of the most important factor
that needs to be considered is that these people gives facial expression much importance.
Company needs to understand these cultural preferences for the smooth functioning of their
work.
In order to understand the cultural preferences that Hofstede’s five cultural dimensions
can be taken into the consideration by the company, the five dimensions are Power distance,
Individualism/collectivism, Masculinity/Feminity, uncertain avoidance and long-short term
orientation (Williams, and Zhang, 2020). In case of china there is strong collectivism, in case of
8
cultural preferences becomes one of the essential factor to be considered by the organisation, as
the cultural preferences has direct or indirect influence of the functioning of the business that is
the reason it becomes important for them to promote the diverse culture. In case of the UK SME
Meadow dairy company which is planning to expand their business into the Chinese market for
their UHT milk for the children aged from 3-11 years the cultural preference of the china is very
essential for the company. Chinese culture is one of the oldest culture, the businesses in teh china
are greatly influenced by the Confucianism which means the building relationship network based
on the various factors like values, loyalty, modesty and honesty. The people of china respects
and value the relationship and highly believe in building strong and honest relationship, they also
look for building long term relationship and create mutual trust and strong relationship rather
than any kind of negotiation or agreements. In china the disbelieve and notion often is licked
with the outsiders, one of the most essential way to build the relationship is to embrace an
mediator in the activities. The china is an developing economy undergoing many changes
(Savicki, 2020).
The cultural preference will help company to understand the culture of a target country and
the factors that are needed to be considered by the company while dealing with the cultural
diversity it will also help in enhancing the performance of the company and improving their
brand image among the targeted customers. The china is mainly the relationship oriented country
where the relationship is given the top most priority also the company needs to understand before
expanding into the Chinese market that the Chinese people value the collectivism as the
prevailing culture is the collectivist oriented, they are the most cooperative within their own
group they value their own group the most (Wang and Li, 2019). It is analysed that the just like
the economy the Chinese culture is also developing effectively. One of the most important factor
that needs to be considered is that these people gives facial expression much importance.
Company needs to understand these cultural preferences for the smooth functioning of their
work.
In order to understand the cultural preferences that Hofstede’s five cultural dimensions
can be taken into the consideration by the company, the five dimensions are Power distance,
Individualism/collectivism, Masculinity/Feminity, uncertain avoidance and long-short term
orientation (Williams, and Zhang, 2020). In case of china there is strong collectivism, in case of
8
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power distance the country has centralised tendency towards the democracy also in case of
uncertainty avoidance country is a risk avoiding mainly. In addition to this in case of
Masculinity/Femininity dimension there are more feminine in the country and china follow the
long term orientation. The above dimensions need to be carefully taken into consideration by the
company before expanding their business to the Chinese market for their UHT milk for the
children’s (Xieand Li, 2018).
Various expansion methods to be taken into consideration by the company.
Expansion to the international market allows business to grow in the size, with increasing
trend many local business are planning to expand their business from their local market to the
international market in order to enhance their productivity and profitability and also their
expansion to the international market allow business to increase their customers base effectively
(Luo and Tung, 2018), there are number of methods available for the businessman to expand
their business to the international market. In context to UK SME Milk Company, the various
expansion method that can be considered are discussed below:
Direct exporting method: The one of the convenient method that can be used by the
company to expand their business into the international market is the direct expansion method,
this allows business to directly supply their goods and services to the international market,
allowing them to have direct access to the global market.
Indirect Exporting method: The another method of the expansion is the indirect
expansion, this involves indirect supply of goods and services into the international market,
under this company supply their goods and services through the intermediaries who are having
access to the target market more easily.
Franchising: It is defined as the agreement between the two parties under which the
company allow the other person in the targeted country to have the ownership of the company
and carry out their business activity in the targeted country.
Licensing: It is defined as the agreement between the two people where one person allow
the other person to use their product and services or the trademark in the targeted country.
Joint ventures: Another method of the expansion is the joint venture, it is an agreement where
two or more parties agrees to join together to form a new business entity sharing profit and risk
equally (Yung and Root, 2019).
9
uncertainty avoidance country is a risk avoiding mainly. In addition to this in case of
Masculinity/Femininity dimension there are more feminine in the country and china follow the
long term orientation. The above dimensions need to be carefully taken into consideration by the
company before expanding their business to the Chinese market for their UHT milk for the
children’s (Xieand Li, 2018).
Various expansion methods to be taken into consideration by the company.
Expansion to the international market allows business to grow in the size, with increasing
trend many local business are planning to expand their business from their local market to the
international market in order to enhance their productivity and profitability and also their
expansion to the international market allow business to increase their customers base effectively
(Luo and Tung, 2018), there are number of methods available for the businessman to expand
their business to the international market. In context to UK SME Milk Company, the various
expansion method that can be considered are discussed below:
Direct exporting method: The one of the convenient method that can be used by the
company to expand their business into the international market is the direct expansion method,
this allows business to directly supply their goods and services to the international market,
allowing them to have direct access to the global market.
Indirect Exporting method: The another method of the expansion is the indirect
expansion, this involves indirect supply of goods and services into the international market,
under this company supply their goods and services through the intermediaries who are having
access to the target market more easily.
Franchising: It is defined as the agreement between the two parties under which the
company allow the other person in the targeted country to have the ownership of the company
and carry out their business activity in the targeted country.
Licensing: It is defined as the agreement between the two people where one person allow
the other person to use their product and services or the trademark in the targeted country.
Joint ventures: Another method of the expansion is the joint venture, it is an agreement where
two or more parties agrees to join together to form a new business entity sharing profit and risk
equally (Yung and Root, 2019).
9
In case of UK SME Milk Company can use the direct expansion method in order to
expand their business into the Chinese market effectively, it will allow company to supply their
product and services directly to the international market without any involvement or interference
of the any third party giving direct access to the international market.
Strategic evaluation framework
The term strategic evaluation is defined as the process of evaluating the overall strategies
of the organisation, it enables the organisation to analyse the long term or the short term results
effectively (Maksimov and Luo, 2021). The UK SME Milk Company is planning to expand their
business into the Chinese market, one of the suitable method that can be taken into consideration
by the company can be the direct exporting method, in order to analyse the strategic evaluation
of the UK SEM Meadow dairy Ansoff matrix can be taken into consideration which is discussed
below:
(Strategic evaluation framework of UK SME)
Market Penetration: This strategy focus on enhancing the sale of the business through
selling existing product into an existing market, the main focus of the marketer is to increase
their market size by reducing the price of their existing products and services.
10
expand their business into the Chinese market effectively, it will allow company to supply their
product and services directly to the international market without any involvement or interference
of the any third party giving direct access to the international market.
Strategic evaluation framework
The term strategic evaluation is defined as the process of evaluating the overall strategies
of the organisation, it enables the organisation to analyse the long term or the short term results
effectively (Maksimov and Luo, 2021). The UK SME Milk Company is planning to expand their
business into the Chinese market, one of the suitable method that can be taken into consideration
by the company can be the direct exporting method, in order to analyse the strategic evaluation
of the UK SEM Meadow dairy Ansoff matrix can be taken into consideration which is discussed
below:
(Strategic evaluation framework of UK SME)
Market Penetration: This strategy focus on enhancing the sale of the business through
selling existing product into an existing market, the main focus of the marketer is to increase
their market size by reducing the price of their existing products and services.
10
Market development: The another strategy is the market development strategy under this
the marketer focuses on taping the new market using the existing product and services. This
strategy allows business to expand their business to the international market with already well
established products and services.
Product Development: Under the product development strategy the marketer focuses on
innovation or development of new product for the already existing market in order to attract
more customers, this is mainly done to satisfy the customers in the existing market.
Diversification: The last strategy is the diversification, under this marketer focuses on
entering into the new market with their new innovative product in order to expand their market
size and increase their customers base (Sartor and Beamish, 2020).
For the above discussion it can be concluded that, in case of UK SME to gain competitive
advantage in the market and develop proper market strategy the company can use market
development strategy as it will allow company to enter into the Chinese market with their well
established milk company in the UK, it will enable company to gain competitive advantage as
the product is well established (Zhang and Chen, 2020).
Conclusion
From the above report it can be concluded that international business enables business to
grow and survive in the increasing competitive environment, it allows business to increase their
market size and also their customer base. The business which are carrying out their business
activities at the international level are more likely to be more successful rather than the business
operating locally. It helps business to have wider approach to the international market with will
automatically help them to enhance their productivity and profitability. This report emphasis on
the importance of international market and the key business drivers includes external factors that
can influence the UK SME which is planning to expand their business to the Chinese market also
the trade barriers, social and ethical issues as well as the cultural preferences that needs to be
considered by the business. In addition to this the various expansion method that can be used by
the business are also mentioned.
11
the marketer focuses on taping the new market using the existing product and services. This
strategy allows business to expand their business to the international market with already well
established products and services.
Product Development: Under the product development strategy the marketer focuses on
innovation or development of new product for the already existing market in order to attract
more customers, this is mainly done to satisfy the customers in the existing market.
Diversification: The last strategy is the diversification, under this marketer focuses on
entering into the new market with their new innovative product in order to expand their market
size and increase their customers base (Sartor and Beamish, 2020).
For the above discussion it can be concluded that, in case of UK SME to gain competitive
advantage in the market and develop proper market strategy the company can use market
development strategy as it will allow company to enter into the Chinese market with their well
established milk company in the UK, it will enable company to gain competitive advantage as
the product is well established (Zhang and Chen, 2020).
Conclusion
From the above report it can be concluded that international business enables business to
grow and survive in the increasing competitive environment, it allows business to increase their
market size and also their customer base. The business which are carrying out their business
activities at the international level are more likely to be more successful rather than the business
operating locally. It helps business to have wider approach to the international market with will
automatically help them to enhance their productivity and profitability. This report emphasis on
the importance of international market and the key business drivers includes external factors that
can influence the UK SME which is planning to expand their business to the Chinese market also
the trade barriers, social and ethical issues as well as the cultural preferences that needs to be
considered by the business. In addition to this the various expansion method that can be used by
the business are also mentioned.
11
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References
Books and Journals
Aouadi, A. and Marsat, S., 2018. Do ESG controversies matter for firm value? Evidence from
international data. Journal of Business Ethics, 151(4), pp.1027-1047.
Arvidsson, S., Arvidsson, S. and Harrison, 2019. Challenges in Managing Sustainable Business.
Springer International Publishing.
Bashir, M. and Farooq, R., 2019. The synergetic effect of knowledge management and business
model innovation on firm competence. International Journal of Innovation Science.
Brown, R.A. ed., 2018. Chinese business enterprise in Asia (Vol. 7). Routledge.
Cortez, R.M. and Johnston, W.J., 2018. Needed B2B marketing capabilities: Insights from the
USA and emerging Latin America. International Business Review, 27(3), pp.594-609.
de Sousa Jabbour, A.B.L., 2019. Going in circles: new business models for efficiency and
value. Journal of Business Strategy.
Hair, J.F., Page, M. and Brunsveld, N., 2019. Essentials of business research methods.
Routledge.
Kim, D. and Cavusgil, E., 2020. Antecedents and outcomes of digital platform risk for
international new ventures’ internationalization. Journal of World Business, 55(1),
p.101021.
Kim, K. and Pyun, J.H., 2018. Exchange rate regimes and the international transmission of
business cycles: Capital account openness matters. Journal of International Money and
Finance, 87, pp.44-61.
Lel, U., 2019. The role of foreign institutional investors in restraining earnings management
activities across countries. Journal of International Business Studies, 50(6), pp.895-922.
Li, W., Ng, J., Tsang, A. and Urcan, O., 2019. Country-level institutions and management
earnings forecasts. Journal of International Business Studies, 50(1), pp.48-82.
Luo, Y. and Tung, R.L., 2018. A general theory of springboard MNEs. Journal of International
Business Studies, 49(2), pp.129-152.
Maksimov, V. and Luo, Y., 2021. International springboard as an entrepreneurial act. Journal of
World Business, 56(3), p.101176.
Muldoon Jr, J.P., 2018. Multilateral diplomacy and the United Nations today. Routledge.
12
Books and Journals
Aouadi, A. and Marsat, S., 2018. Do ESG controversies matter for firm value? Evidence from
international data. Journal of Business Ethics, 151(4), pp.1027-1047.
Arvidsson, S., Arvidsson, S. and Harrison, 2019. Challenges in Managing Sustainable Business.
Springer International Publishing.
Bashir, M. and Farooq, R., 2019. The synergetic effect of knowledge management and business
model innovation on firm competence. International Journal of Innovation Science.
Brown, R.A. ed., 2018. Chinese business enterprise in Asia (Vol. 7). Routledge.
Cortez, R.M. and Johnston, W.J., 2018. Needed B2B marketing capabilities: Insights from the
USA and emerging Latin America. International Business Review, 27(3), pp.594-609.
de Sousa Jabbour, A.B.L., 2019. Going in circles: new business models for efficiency and
value. Journal of Business Strategy.
Hair, J.F., Page, M. and Brunsveld, N., 2019. Essentials of business research methods.
Routledge.
Kim, D. and Cavusgil, E., 2020. Antecedents and outcomes of digital platform risk for
international new ventures’ internationalization. Journal of World Business, 55(1),
p.101021.
Kim, K. and Pyun, J.H., 2018. Exchange rate regimes and the international transmission of
business cycles: Capital account openness matters. Journal of International Money and
Finance, 87, pp.44-61.
Lel, U., 2019. The role of foreign institutional investors in restraining earnings management
activities across countries. Journal of International Business Studies, 50(6), pp.895-922.
Li, W., Ng, J., Tsang, A. and Urcan, O., 2019. Country-level institutions and management
earnings forecasts. Journal of International Business Studies, 50(1), pp.48-82.
Luo, Y. and Tung, R.L., 2018. A general theory of springboard MNEs. Journal of International
Business Studies, 49(2), pp.129-152.
Maksimov, V. and Luo, Y., 2021. International springboard as an entrepreneurial act. Journal of
World Business, 56(3), p.101176.
Muldoon Jr, J.P., 2018. Multilateral diplomacy and the United Nations today. Routledge.
12
Roberts, J., 2018. Multinational business service firms: development of multinational
organization structures in the UK business service sector. Routledge.
Sartor, M.A. and Beamish, P.W., 2020. Integration-oriented strategies, host market corruption
and the likelihood of foreign subsidiary exit from emerging markets. Journal of
International Business Studies, pp.1-18.
Su, W. and Tan, D., 2018. Business groups and tax havens. Journal of Business Ethics, 153(4),
pp.1067-1081.
Vitalis, R., 2018. When capitalists collide: business conflict and the end of empire in Egypt.
University of California Press.
Online
(What is international business, 2019) [online] Available through;
https://thefactfactor.com/facts/management/international-business/international-business/1532/
(Advantages of international business, 2019) [ Online] Available through;
https://thefactfactor.com/facts/management/international-business/advantages-of-international-
trade/1560/
(Industry analysis, 2019) [Online] Available through; https://www.marketing91.com/industry-
analysis/
13
organization structures in the UK business service sector. Routledge.
Sartor, M.A. and Beamish, P.W., 2020. Integration-oriented strategies, host market corruption
and the likelihood of foreign subsidiary exit from emerging markets. Journal of
International Business Studies, pp.1-18.
Su, W. and Tan, D., 2018. Business groups and tax havens. Journal of Business Ethics, 153(4),
pp.1067-1081.
Vitalis, R., 2018. When capitalists collide: business conflict and the end of empire in Egypt.
University of California Press.
Online
(What is international business, 2019) [online] Available through;
https://thefactfactor.com/facts/management/international-business/international-business/1532/
(Advantages of international business, 2019) [ Online] Available through;
https://thefactfactor.com/facts/management/international-business/advantages-of-international-
trade/1560/
(Industry analysis, 2019) [Online] Available through; https://www.marketing91.com/industry-
analysis/
13
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