International Business: Expanding into the Chinese Market

International Business

EXECUTIVE SUMMARY
International businesses are the business activities a company does or plans to do in
foreign company. Dairylink a UK based SME which produces dairy products and is planning to
enter the Chinese market with its UHT milk that will be specifically targetting children from the
age group of 3-11 years. PESTLE analysis will determine the external factors that will affect the
SME in the Chinese market. The barriers of the trade which might arise in the international
business of the company are discussed. The issues which the company will also face in that
specific market are ethical and social issues. Cultural preferences in china will affect the business
and its considerations. An expansion method will also be chosen by the SME after analysation of
all the methods. The company will be recommended with different types of strategies.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Drivers of business and its expansion in China...........................................................................4
Trade Barriers..............................................................................................................................6
Ethical and social issues faced by UK SMEs..............................................................................7
Cultural preference of business...................................................................................................9
Expansion methods....................................................................................................................10
CONCLUSION..............................................................................................................................11
RECOMMENDATIONS...............................................................................................................12
REFERENCES..............................................................................................................................13
Books and Journals....................................................................................................................13
Online........................................................................................................................................13

INTRODUCTION
Dairy industry in UK has been very successful over the years, UK has been the eleventh
largest producer of the milk worldwide. In this year the production of milk has been expected to
grow UK. China's milk producing industries are also forecasted to grow although it imports
majority of its dairy products. The demand for the dairy products in said to increase in China
thus it will have to import more dairy products. UHT milk, ultra high temperature processed milk
is produced by many companies in UK (Zhao and et.al., 2020). UK produces over 120 million
litres of milk annually majority of which is produced by the company names Crediton dairies. In
Chinese market the demand for UHT milk is very high because of its huge population. In China,
Mongolia Yili Industrial Group Co. is the leading producers of this product. The Chinese
economy is ranked 31st easiest country to do business and 28th in the competition level. China is
emerging as one of the best economy for doing business ranking at 14th on the global index.
MAIN BODY
Drivers of business and its expansion in China
Dairylink a SME in UK which is a producer of Milk and other dairy products. This
company is planning to enter the Chinese market for fulfilling the needs of children of the age
group of 3 to 11 years. There are two drivers which has driven this SME to expand its business in
the Chinese market.
Competition :
The competition in the Chinese market is very less in comparison to UK market. This is
because there are not many companies which produce dairy products in china. Specifically UHT
milk is imported by the country along with some other dairy products. This SME is based in UK
which gives it a good reputation across the globe. That will make the customers in Chinese
market trust the product of the company. This has driven the company towards expanding its
business in China (Kong, Shi and Yang, 2019).
Financial resources :
This SME has proved has made this plan for entering the Chinese market because it has
got the financial resources which it believes will be a good investment in this market. Entering