International Business: Expanding UHT Milk in China Market

INTERNATIONAL
BUSINESS

EXECUTIVE SUMMARY
International business refers to trade of goods, capital, knowledge, services across the
national borders and a global transactional scale. This type of business involves cross border
transactions of goods and services between two or more than two countries. Globalisation is
termed as international business that is emerging for developing economy of country. This report
is based on Daioni Organic that is a UK SME i.e. Who produces the UHT milk. The main
objective of this organisation is to tap into the Chinese market. The company offer UHT milk to
customers and become a eading in UK. To become famous in foreign market they want to
expand their production in China where they target the children age group of 3-11 years. This
particular report helps in gaining knowledge on business drivers in expansion of company along
with understand trade barriers. Further it demonstrate ethical and social issues that has been
faced by UK sme in promote the UHT milk and cultural preferences. Although in this expansion,
methods is also elaborated that is useful for SME to expand business operation in other country.

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Business drivers behind company expansion into China Market ..............................................3
Trade barrier................................................................................................................................5
Ethical and Social issues considered by UK SME......................................................................6
Cultural preferences considered by business..............................................................................7
Expansion methods chosen by UK SME, Diaone Organic.......................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
International business defined as an exchange of goods and services between two parties
of different nation. It is mainly involve those transactions that express crossing of national
boundaries (Collinson and et. al., 2020). It mainly helps in strengthen the economic relation
between countries. Although, these type of businesses support other countries by exporting them
goods of their requirements. This project report is based on UK sme, Diaone organic who tap
into China market to promote UHT milk. This report explain business drivers that help UK SME
to expand UHT milk in China market. For this pestle analysis is best tool, by using this firm
examine several external factors that impact on operations of organisation. Further it also
highlight the trade barrier, business uncertainties, opportunities created by trade policy. At last it
reflect ethical and social issues along with cultural preferences that is useful for SME to expand
business. Diaone organic is a family owned business who offer premium quality products that
are good for people, environment and communities. The main motive of company is offer
goodness to people.
MAIN BODY
Business drivers behind company expansion into China Market
It is crucial for business to understand the expansion in foreign market. In terms of
expanding UHT milk by Daioni Organic in Chinese market it is crucial to emphasis on business
drivers that are reflected using PESTLE analysis. The Pestle analysis of Chinese market is
presented below:
Pestle analysis
China is represented as most attractive nation in world because it enhances the concept of
international business (Kurzer, 2019). Many companies want to expand their business in China
because of several aspects i.e. size of market, low cost labour, China growth potential etc. To
effectively understand business drivers by Diaone organic for expanding UHT milk, six factors
under pestle analysis are presented below:
 Political factor- It mainly includes government regulations, stability of government etc.
Country like China has good trade relation with most powerful nations nut disputed with
US and countries of South China ruin their political stability (China PESTEL Analysis,
2021.). The country maintain low cost of raw material because in in China low cost
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