Market Internationalization

Market Internationalization1
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Market Internationalization2
Executive summary
Many companies are seeking new markets for their products and services. This is because
somehow there is already market saturation in their local markets. The saturation which is often
brought about by having reached many of their consumers leaves the company with very little
room for expansion and growth. The limited growth and expansion may lead a company to
redundancy and eventually lead to the market exit. Many companies opt to venture into new
markets preferably in the foreign markets. This strategy helps them to wade redundancy,
overcome local competition and to open up virgin markets abroad.
Seeking new markets however is not an easy ride, it presents challenges with it that often
discourage the efforts of these companies. Ranging from heavy capital investments to entry
strategies into foreign markets, these challenges often make it very difficult to realize the market
entry dreams of companies especially if the scale is still small. This report, therefore, seeks to
analyze the requirements of a new market entry plan for a UK UHT milk production enterprise
and seeks to introduce this product into an emerging identified Chinese market. The target group
in this venture are young children aged 3-11 years who have their taste and preferences as far as
UHT milk is concerned.

Market Internationalization3
Table of Contents
Executive summary.......................................................................................................................2
Introduction....................................................................................................................................4
What is UHT Milk?.......................................................................................................................5
UHT Milk Production in UK........................................................................................................6
Production capacity and demand.............................................................................................6
UHT Milk Supply in UK...........................................................................................................7
Chinese UHT Milk Demand and supply..................................................................................7
The business driving forces...........................................................................................................8
UK-China Trade relationship...................................................................................................8
Political Temperatures............................................................................................................10
Trading barriers.......................................................................................................................10
UK’s Absolute advantage over China........................................................................................11
PESTEL analysis of the UHT milk venture..............................................................................11
Political factors.........................................................................................................................11
Economic factors......................................................................................................................12
Social factors.............................................................................................................................12
Technological factors...............................................................................................................12
Environmental factors.............................................................................................................13
Legal factors.............................................................................................................................13
Social and Ethical issues to consider by UK UHT milk venture.............................................13
Cultural preferences to be considered by the business............................................................14
Expansion strategies into China.................................................................................................15
Direct Exporting.......................................................................................................................15
Franchising...............................................................................................................................15
Licensing...................................................................................................................................16
Which way for expansion? - Partnership..............................................................................16
Conclusion....................................................................................................................................16
References.....................................................................................................................................17

Market Internationalization4
UK UHT Milk Market Globalization
Introduction
Milk production has taken a new twist in both local, regional and international markets.
Many companies are mastering the art of making milk preserve its original quality and ensuring
that no value is lost so that the consumer can get the most out of this important product available
in most supermarket stores. Companies struggle with the way of ensuring that the right
nutritional contents of any milk they produce for marketing are retained and that the product can
stay for quite a long time without losing its value, any loss of value to the product could be
detrimental to the future of that particular organization.
In order to ensure quality and value retention, therefore, milk companies employ different
strategies. These strategies may call for the use of most advanced technological approaches that
would produce the desired results. However, the approaches used by most companies which in
essence vary, all aim towards providing that very best quality for customer satisfaction.
Companies, therefore, classify their production of milk into two broad categories; the long shelf
life milk and the short shelf life milk. The short shelf milk is often referred to as fresh milk due
to their short storage capability under normal room temperature and pressure thus would require
refrigeration or any other means of ensuring that the milk retains both its chemical and physical
characteristics. This type of milk has a very short lifespan and hence would go bad when not put
in the rightful conditions. The long shelf life milk is often associated with the aspect of staying
longer retaining its rightful milk properties for a much longer time under normal room
temperature and pressure (Hettinga, 2017).