Global Business Plan: Lush Handmade Cosmetics' China Expansion

This global business plan details Lush Handmade Cosmetics Limited's strategic initiative to expand into the Chinese market. The plan includes an executive summary, highlighting the company's background and objectives, and addresses cultural, ethical, and legal challenges associated with entering the Chinese market. It outlines the company's mission statement, chain of command, and adherence to the UK Bribery Act. The analysis encompasses market trends, a PESTLE analysis, and a SWOT analysis to identify opportunities and threats. The plan also explores the impact of social culture on the company's products, the role of the foreign exchange market, and potential international sources of financing, aiming for a successful and sustainable expansion into China. Desklib provides this and other solved assignments for students.

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Global Business Plan
Student’s Name
Institution Affiliate
Date

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Global Business Plan
Executive Summary
The company selected for this assignment is Lush Handmade Cosmetics Limited. The
company is a privately owned corporation which deals in various items such as organic
cosmetics. It is also a global firm which offers its product to all the individuals across the world.
The new venture of the company is to expand globally into other parts of the world especially in
the market business situated in China. Currently, the company is carrying its activities in close to
40 nations, however, it primarily aims at expanding into China business market. The expansion
of the company into China is attributed to the fact that new cultural, legal and ethical problems
will be generated, however, the firm has decided to take a risk so as to offer its cosmetic products
to the citizens of China.
The organization is in the private sector and therefore, the application of partnerships is
essential especially to the limited partnerships and the corporations and they also form the
primary sources of investments and funds for the company. There are two methods of entry
which Lush Company can use to enter into the business and this includes, the use of licensing
and corporation. Lush is also a UK based company and hence the American Foreign Corruption
Acct will not be applicable to it and hence it will only comply with the UK Bribery Act. Such an
act will help in ensuring that all the rules and regulations are adhered to continuously during the
strategizing and corporate decision making issues.
Based on the company’s PEST and SWOT analysis, certain key areas in regards to the
opportunities and strengths of the company have been identified and this, therefore, displays
some of the essential sections which the firm can grow and expand in the future. A fundamental
growth area of the company is related to product marketing typically for certain specific regions
and target customers who the cosmetic items are being offered to by Lush Limited Company.

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There are certain things which the company should do in order to become successful in the
Chinese market and this entails meeting the needs and requirements of their target audience
including the key consumers of their products.
Further, the company's exit strategy and level of finances advocate for an expansion into
the Chinese market. The success of the corporations is affected by the foreign exchange market
which has a key role in the currency exchange rates and money supply in the economy. Lush
Limited Company's exit strategy entails the sale of the corporation to a particular public
organization. The other exit strategy could be to shut down the operations of the business and
liquidate its assets and pay off for all the liabilities.
Mission Statement of the Company
The mission statement of Lush Handmade Limited Company is to make their products
using hand by use of vegetarian preservatives and ingredients. Using the open commitment and
transparency, the company offers information on their commitment to vegetarian, cruelty free
and natural products to a variety of individuals.
Lush Handmade Limited Company
Cultural, Ethical and Legal Challenges
The company is located in Poole, Dorset, United Kingdom. The key founders of the firm
are Liz Weird, who was a beauty therapist and Mark Constantine, a trichologist. The cosmetic
products of the company are provided for various nations precisely over 40 countries. Such
countries may include, Japan, South Korea, and Russia who form the primary players in the
Eastern part of Asia (Wakefield-Rann, 2017). Lush Limited is seeking to expand into China for a
variety of reasons, however, such an expansion is likely to be faced with certain challenges in

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regards to culture, legal issues and ethics among others. In the past, China has been faced with
certain political upheavals, however, that has changed since the government has become stable
with more focus on the economic development and maintenance of stable economic conditions.
The above mentioned issues will typically create a stable environment which will allow for
expansion of Lush Handmade Limited in China. Additionally, the country China has a
communist government and hence its ruling is based on certain strict regulations. However,
recently there have been attempts to unite the nation and thus stop more fighting with the aim to
adopt capitalism into the country
A key legal challenge which the company is likely to face is that relating to the
registration of the company and also the approval of their products and this is because a lengthy
procedure is involved. Also, the rule of law is weak and this includes the inconsistency in the
application of the regulations making the whole process inconvenient. Besides, the legal
challenges, there are also ethical and cultural challenges (Di & Arbajian, 2014). For example,
there is a value given to a community by the country. It would be prudent for the company
therefore to comprehend the differences in culture of the citizens of China. One of the key
cultural difference among Chinese is that the elderly in the society is to be treated with a lot of
respect and dignity. Additionally, the Chinese community tends to save a lot and this is unlike in
the western communities. The Chinese do not typically spend on certain useless items such as the
cosmetics using their hard earned cash. The company would only be able to sell if they respect
the culture and beliefs of the Chinese society.

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Chain of Command
The firm is a private company and hence it has just a small amount of shares which is
availed for subscriptions. Further, its growth mainly depends on partnership and therefore its
structure is based on a limited partnership which allows only the business partners to be investors
(Di & Arbajian, 2014). The top chain of command is headed by the two founders and thus they
make most of the decisions of the making pertaining to operations and various strategies of the
firm. The company also aims at using a mixture of the decentralized and centralized
organizational structure to meet their various needs.
Foreign Corrupt Practices Act
The primary aim of the Foreign Corrupt Practices Act was to prevent acts of bribery to
the outside authorities which were done by the organizations based in America. The key purpose
of the Foreign Corrupt Practices Act was to reduce the provision of corporate gifts to the outside
authorities. The act required various companies to do a number of things and such include, the
keeping of accurate and clear, books and records by such firms (Koehler, 2015). Also, the
guarantor who had enrolled with the Securities and Exchange Commission to carry out an
accurate bookkeeping process. Further, the cases of bribery by the American partnership of the
foreign authorities were not allowed by the act. However, the act was altered in 1988. The UK
Bribery Act is considered as a guide to Lush Handmade Company and hence it has to abide by
all the rules and regulations indicated in the Act.
Market Analysis
The company's niche in the market entails offering of cosmetics and also the socially
responsible behavior (Komatsu Cipriani, 2017). The target market for the firm will be mainly

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high income and middle income earning classes. The other target audience for the firm will be
women who are aged 18-45 and this will be the major target for its products.
Industry Analysis
One of the fastest growing markets today is the cosmetic industry. The key trends in the
industry entail sustainable selections which are considered to be environmentally friendly.
However, the choices happen to be efficient and effective. In the recent past, there has been a
trend in technology and innovations and this, therefore, implies that beauty and natural are
equivalent to skincare (Moraes, 2018). The industry is also big in size and this has therefore
attracted a large number of competitors, however, there are chances that Lush Handmade is
likely to succeed.
PESTLE Analysis
Political
The European Commission has passed certain laws which have made it illegal for various
companies to offer items which have been tested on animals (Bush, 2017). Additionally, there
has been a decline in the trade barrier and this is because it has been found out that the taxes and
customs duties imposed make penetration into the foreign market difficult.
Economics
Generally, there is an increase in the purchasing power by the customers and this,
therefore, means that much products of the company is likely to be purchased (Danzig, 2018).
Also, there has been an increase in the inflation causing a rise in the cost of raw materials.
Social
In the social aspect, most of the customers demand environmentally friendly products.
Also, the number of families without children has risen and thus there will be an increase in

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expenditure on luxury products. Further, the middle class has risen and hence they can afford
certain luxury cosmetic items.
Technology
According to Bush (2017), in the technology aspect, there is an increased investment in
the online buyer's market. Also, there is an investment in technology especially on the natural
beauty products whose aim is to change the skin.
SWOT Analysis
Strengths
The key strengths of the company entail, the development of a distinctive retail format
which enables the consumers to identify its brand (Bull et al., 2016). Also, the company provides
back to the community and this involves campaigns on the corporate social responsibility.
Weaknesses
The prices of the cosmetic products are expensive making them non-affordable by the
lower class (Blockeel, Drakopoulos, Santos-Ribeiro, Polyzos & Tournaye, 2016). Also, many
individuals are not familiar with the brand and hence it is not identified globally.
Opportunities
The key opportunities for the company entail the Going Green aspect which has provided
the company with the opportunity to develop a new industry (Bull et al., 2016). Also, most
individuals have developed a passion for organic, healthy and fresh body care and skin items and
hence the company will make more sales.

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Threats
There are also various threats such as the existence of the other cosmetic items. Also,
there are much cheaper cosmetic products compared to those of Lush Handmade Limited
(Blockeel et al.,2016).
Impact of Social Culture on the Company’s Products
According to Epstein (2018), there is likely to be an impact on the company’s products
by the social culture and this is because it operates in over 40 countries. The Asian culture is
considered to be quite different from those of the western cultures and this is epically in regards
to cosmetic products and hence the company needs to consider that when expanding to China.
Additionally, the company will certain products which are Chinese consumer based and such
products should be able to preserve their natural and skin color (Marshall, McCarthy, McGrath,
& Claudy, 2015).
Foreign Exchange Market
The foreign exchange market is that market one country currency can be converted into
another. The primary functions of the foreign market exchange are providing insurance on
foreign exchange risk and conversion of currency (Kálmán, Makay & Tóth, 2016). The
organizations use the market in relation to the conversion of currency for various purposes such
as conversion of money received from a foreign country into home-based currency. The other
purpose entails using the market when there is extra money earned by the particular
organizations. Additionally, the forex market can be used to provide insurance protection for
various risks (Guofeng, 2015).

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International Sources of Financing
There are various sources of international funding available for the company as it seeks to
expand into China. A key source of finance is from the business investors and this is because it is
a limited partnership (Polak & Boughton, 2016). The other source of international financing is
through the issue of bonds. The World Bank has a started partnering with the private sectors and
hence it is also one of the international sources of finance available for Lush Limited Company
(Odell, 2014).
Exit Strategy
According to Keenan, Maldonado & O'Grady (2016), the exit strategy is used as a
mechanism by the organization in ensuring that they can easily get out of a market prior to a
particular disaster. When an exit strategy is planned well, it can enable an organization to set its
objectives and thereafter attain them optimally. There are typically two types of an exit strategy
which can be used by the Company since it is a private company. The first exit strategy could be
to convert the company into a public company by selling it. In the above mentioned strategy, the
company will typically remain with a huge amount of money (Brown, 2016). The other exit
strategy could stop the various operations of the company and later dispose of all the assets.

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Feasibility of Global Venture
The feasibility of global venture of the company into China is possible and this is because
of the key strategies which have been put in place by the company. The firm is considered to be
technologically savvy and innovative and therefore it will offer certain products which are
culturally and socially acceptable by the community (Burns, 2016). The company should,
therefore, continue to pursue the project and during which it should obtain a variety of
investments which will be used to grow the mortar and brick stores to be used in the Chinese
market.

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References
Blockeel, C., Drakopoulos, P., Santos-Ribeiro, S., Polyzos, N. P., & Tournaye, H. (2016). A
fresh look at the freeze-all protocol: a SWOT analysis. Human reproduction, 31(3), 491-
497.
Brown, C. M. (2016). Between Rivers: Reflections on home, obligation, and otherness from a
confluence of conservation and connectivity.
Bull, J. W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., ... &
Carter-Silk, E. (2016). Strengths, Weaknesses, Opportunities and Threats: A SWOT
analysis of the ecosystem services framework. Ecosystem Services, 17, 99-111.
Burns, P. (2016). Entrepreneurship and small business. Palgrave Macmillan Limited.
Bush, T. (2017). PESTLE analysis: everything you need to know (2016). Available in:
http://pestleanalysis. com.
Danzig, R. (2018). ALTERNATIVE FUTURE SCENARIOS OF AGRICULTURE IN
FLORIDA: PESTLE analysis to asses the possible alternative future scenarios fro Florida
agriculture within the coming 30 years.
Di, Y., & Arbajian, P. (2014). Understanding alternative choices of handmade cosmetics in the
postmodern consumer society.
Epstein, M. J. (2018). Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Guofeng, S. (2015). Foreign Exchange Market. In Financial Reforms in Modern China (pp. 133-
175). Palgrave Macmillan, New York.

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Kálmán, P., Makay, E., & Tóth, D. (2016). Foreign Exchange Market. MNB Handbook, 1(7), 1-
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Keenan, C., Maldonado, V., & O'Grady, B. (2016). Working the streets: An international
comparative analysis of income generation among street youth. Canadian Review of
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Koehler, M. (2015). Measuring the Impact of Non-Prosecution and Deferred Prosecution
Agreements on Foreign Corrupt Practices Act Enforcement. UCDL Rev., 49, 497.
Komatsu Cipriani, T. (2017). The emerging challenge of brand design and brand management in
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Marshall, D., McCarthy, L., McGrath, P., & Claudy, M. (2015). Going above and beyond: how
sustainability culture and entrepreneurial orientation drive social sustainability supply
chain practice adoption. Supply Chain Management: An International Journal, 20(4),
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Moraes, C. S. D. S. (2018). Are consumers wiling to adhere to Companies’ Environmentally
Friendly Packaging?: case study on Rituals and Lush Refill Vs Naked Package (Doctoral
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