Expansion Strategies for a UK Based UHT Milk Company in China

International Business

Executive summary
It is essential for a company to focus on their expansion strategies for the business. They must
scan their internal and external business environment on regular basis to analyse the opportunity
for growth of business. PESTEL analysis is one of the most commonly used framework to
analyse the external business environment is any country where a company want to expand their
business. Trade barriers can act as an obstacle for the company to export their products to their
targeted market because sometimes there are high export charges and regulations which can
harm the company to export their products to other country. There are various kinds of trade
barriers which can impose by a country to promote their local companies and local products. It is
also essential for a company to perform ethically within the new market and perform all CSRE
activities which is essential for their business growth to gain the trust of customers and
government. Identifying cultural preference is also essential for the company for their
international growth.

Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Main Body.......................................................................................................................................4
Business drivers behind company’s expansion within the China................................................4
Trade barriers of the targeted market...........................................................................................6
Ethical and social issues to be considered by the UK SME........................................................7
Cultural preference to be considered by the business..................................................................9
Expansion method to be chosen by company............................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................11
Online-...........................................................................................................................................12

Introduction
It is essential for every organisation to focus on their growth strategies and expand their
market well for effective and fast growth of their company within the industry. Ultra High
Temperature (UHT) milk is prepared by heating the milk at very high temperature to kill the
germs and harmful bacteria and cool down the same milk at very low temperature suddenly after
heating it. This technique is also essential for preventing some necessary nutrients and vitamins
required for human consumption. The global UHT milk market reached a volume of 118.3
Billion Litres in 2020 (UHT Milk Market: Global Industry Trends, Share, Size, Growth,
Opportunity and Forecast 2021-2026, 2020).
Europe has been an early adopter of UHT milk and recently they are leading the
global market of UHT milk by producing largest number of UHT milk packets for their
customers as well as for exporting purpose. The following report covers introduction of
UHT milk by a UK based SME within the new market. China is selected as new market
by the company to sell its UHT milk for 3-11 year old children. The following report
covers business drivers behind company’s expansion into china, trade barriers, ethical
and social issues to be considered by UK company to expand the business within China.
This report also includes cultural preferences and expansion method to be chosen by
company.
Main Body
Business drivers behind company’s expansion within the China
PESTEL analysis will help a business to identify their external business environment and
the opportunities for the growth of a company (Hou, Cao and Liu, 2018). In context of UK based
company which is planning to expand their business internationally by offering their UHT milk
to Chinese market is required to identify the external business environment of China which will
help them to analyse whether their current business environment are helpful for the company to
expand their business or not.
PESTEL analysis of China for the UK based UHT milk offered company-
Political factor- China is having stable political factors which help the companies to
invest in Chinese market. China is also having good trade relations with many other countries to
maintain their trading activities flexible and import those goods easily which they need. China is