Planning for Growth: A Case Study of Norsk European Wholesale Ltd. in China

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Planning for growth
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Table of Contents
Introduction:...............................................................................................................................3
LO1:...........................................................................................................................................4
LO2:.........................................................................................................................................10
LO3..........................................................................................................................................14
LO4:.........................................................................................................................................17
Conclusion:..............................................................................................................................22
Reference:................................................................................................................................23
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Introduction:
Planning for growth of a business is very important in a small and medium business. Norsk
European Wholesale Ltd, the UK based company will be taken here for example. In this
scenario the company is going to introduce its new transportation business in China. Various
marketing tools are done here for determining the strengths and weaknesses of the company.
Various sources of funds are highlighted here for starting up of the business of the company.
The competitive market strategies and the exit strategies will also be highlighted in this
project.
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LO1:
Key considerations for growth options
P1:Analyze key considerations for evaluating growth opportunities and justify these
considerations within an organizational context
Norsk European Wholesale Ltd, a UK based company is going to introduce its transportation,
logistics and wholesale business in China. The company will offer express delivery to the
customers, warehousing and storage services to the customers. The following are some
business strategies of expanding its business in China:
Porter’s Generic Strategies
Porter’s Generic Strategies were discovered by Michael Porter in the year 1985. This tool is
used to determine the direction of an organization (Tansey et al., 2014). There are four
strategies under this tool. They are cost leadership, differentiation, cost focus and
differentiation of focus. The following is the Porter’s Generic strategies of Norsk European
Wholesale Ltd:
Cost leadership: In this strategy, Norsk European will target a broad market and will keep
the price at the lowest possible. The company will either keep its price as much as possible or
it will have a larger market share. In this way, the company will keep its cost as low as
possible.
Differentiation: This is the step in which Norsk European Whole Ltd. will have its unique
service of transportation in the market (D. Banker et al., 2014). Through this strategy, Norsk
European will make its service unique in the market and make the products attractive to its
customers.
Cost focus: In this step, Norsk European will target a niche market in China and then will
offer the service to the customers at the lowest price.
Differentiation focus: In this step, Norsk European will target a niche market in China and
represent its excellent service in the market to attract a large number of customers. This
strategy will increase a strong brand among the customers in the market.
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Analysis: In this case, the best strategy is the ‘Differentiation focus’ for Norsk European.
The company is going to introduce its new business in China and hence, through this
strategy, the company will first capture a niche market with its product differentiation at a
moderate price and thus, it will gain competitive advantages. This will be the capability and
core competency of the company.
PESTEL analysis
The following is the PESTEL analysis for the new business of Norsk European Wholesale
Ltd to identify the macro changes for its transportation and logistics business in China:
Political: Negative:
 The political rules and regulations by
China government have created many
barriers in the path of the new
entrepreneurs. Hence, China
government policies will be barriers
to Norsk European to some extent.
Economic: Positive:
 China is the second largest economy
in the whole world. China has made a
rapid economic growth. Hence, Norsk
European will find economically
strong buyers there.
Social: Positive:
 China, being the most populous
country in the world, has a massive
market for consumer products.
Transportation and warehouse
business is related to the consumer
products. Hence, there is a scope of
this business for Norsk European
Wholesale (Rahman, 2018).
 With the modernization in people’s
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life, the demand of consumers’ goods
is increasing and hence, there is a
scope for Norsk European.
Technological: Positive:
 About 72 million people in China are
connected to online marketing. Hence
the pioneers of Norsk European
Wholesale can take the opportunity of
this(Rahman,2018).
Negative:
 Slow growth rate in IT is considered
as one of the top challenges for the
logistics business in China. Hence,
Norsk European should develop its IT
department.
Environmental: Negative:
 China’s large population has affected
the natural environment and that has
led to air pollution, water pollution,
climatic change and others.
Transportation business is related to
environmental effects and the
company should be aware of this
(Rahman, 2018).
Legal: Negative:
 The chiefs of Norsk European
Wholesale should be aware of the
new laws that regulate the business
and employment practices in China.
For instances, the laws related to
employees remuneration, benefits of
employees, labour disputes and
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