China Market Entry: Tasmanian Mountain Waters Strategic Analysis

This report explores the external business environment for Tasmanian Mountain Waters as it expands into China. It provides an overview of the company, its Natural Spring Water product, and the Chinese market. The analysis covers political, economic, social, technological, legal, and environmental (PESTLE) factors influencing the company's operations and marketing strategies. Key political factors include the Communist Party's influence, potentially hindering private enterprises. Economically, China's stable economy and large population offer opportunities, while social factors highlight the importance of health consciousness. Technological advancements support business operations, but legal and environmental regulations pose challenges. The report recommends establishing manufacturing centers in China, collaborating with the government, and leveraging digital marketing. Desklib is a platform where you can find this and other solved assignments.

Running head: GLOBAL BUSINESS MARKETING
Global Business Marketing
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Executive Summary
The report sheds light on the factor of external business environment within the business
operations of the organization Tasmanian Mountain Waters and their product Natural Spring
Water. This analysis has been undertaken in the particular context of the nation of China
wherein the concerned organization is currently trying to expand. The report begins by
offering an overview of the organization and its product. The report also offers an overview
of the nation of China and the reasons why the nation has become the business hub of the
world in the recent times. The report next undertakes an analysis of the political, legislative,
social, economic, technological and environmental factors which are likely to wield a
significant amount of influence on the business operations of the organization and also the
marketing campaign that they are going to formulate for the product. On the basis of this, the
report offers various recommendations like establishment of manufacturing centers in China
to reduce the export cost, collaboration with national government of China, use of digital
marketing and others.

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Table of Contents
Introduction................................................................................................................................3
Overview of Natural Spring Water............................................................................................3
Overview of China.....................................................................................................................4
Political Factors..........................................................................................................................5
Economic Factors.......................................................................................................................6
Social Factors.............................................................................................................................7
Technological Factors................................................................................................................8
Legal Factors..............................................................................................................................8
Environmental Factors...............................................................................................................9
Recommendations......................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
Hamilton and Webster (2018) are of the viewpoint that the extensive usage of the
different kinds of innovative technologies as well as strategies has drastically changed the
nature of the business world in the contemporary times. As opined by Wetherly (2014), this
change in the nature of the business world is not only evident in the kind of products or
services that are being offered by the contemporary business enterprises to the customers but
at the same time in the kind of business strategies which are being used by the different
business enterprises. The net result of this is the fact that the business world of the
contemporary times has become much more dynamic than that of the earlier times and the
business enterprises need to take into effective consideration the external environment in
which they are operational (Tian, 2016).
Zhang and Wu (2017) are of the viewpoint that an analysis of the external business
environment is important for the organizations since it offers important information to the
organizations regarding the business opportunities that they can utilize for the growth of their
business. More importantly, an analysis of the external business environment at the same
time reveals insight information regarding the threats or the risks that the business enterprises
face on the basis of their business operations in a particular location (Prajogo, 2016). This
report will undertake an analysis of the external business environment of the organization
Tasmanian Mountain Waters and will also analyze the threats as well as opportunities which
galore their product Natural Spring Water in the nation of China.
Overview of Natural Spring Water
The organization Tasmanian Mountain Waters is an Australian organization which
intends to deliver pure as well as high quality water to the people
(Tasmanianmountainwaters.com.au, 2018). It is pertinent to note that in the present times
because of the high amount of pollution caused by the human beings the quality which is
available to them has deteriorated in a substantial manner (Ford, 2018). The consumption of
these kinds of unhygienic water adversely affects the wellbeing of the people and often stuns
their growth as well. The organization under discussion here intends to resolve this issue and
thereby tries to offer the best quality water to the customers. The product Natural Spring
Water offered by the organization under discussion can be seen as a part of the initiative of

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the organization under discussion here to offer the best quality water to the customers
(Blucher, 2018).
The product, Natural Spring Water, of the concerned organization is “a well-
balanced source of natural Calcium, Magnesium, Phosphorus and other essential minerals”
(Tasmanianmountainwaters.com.au, 2018). More importantly, the organization tries to keep
the pH level of the water within the “7.6-7.8 levels” so as to make the water healthy for the
customers (Tasmanianmountainwaters.com.au, 2018). This is important because of the fact
that the mineral water offered by the other similar organizations had a much higher pH level
and thereby are not safe to consume (Blucher, 2018). The water is packed in five and ten
liters water bottles and can be stored for a period of five years (Ford, 2018). In addition to
these, it is seen that the organization takes the help of various kinds of recent technologies for
the purification as well as filtration of water which in turn ensure the fact that the water is not
only safe to consume but also beneficial for the customers. Furthermore, although the
headquarters of the organization under discussion here is based in Tasmania yet in the recent
times it is seen that because of the demand of the Natural Spring Water product offered by it
the organization is expanding into the other nations of the world as well like China, Hong
Kong, United Kingdom and others (Blucher, 2018).
Overview of China
The nation of China has emerged as one of the most important ones in the
contemporary times because of the business opportunities that it offers to the different
international business enterprises (Tian, 2016). The nation located in the continent of Asia
has the largest population of the world and this in turn ensures the fact that the different
international business enterprises have access to the right number of human labor that is
required for their business operations (Rothaermel, 2015). Furthermore, this is also important
because of the fact that this ensures the fact that the different international business
enterprises have the right kind of customer base which is needed for the sale of the surplus
amount of products or services offered by them to the customers (Santangelo, Dellestrand &
Andersson, 2018). In addition to this, the nation has the right kind of resources which are
needed for the business operations of the different international business enterprises. More
importantly, the nation has some of the largest business enterprises of the world like
Samsung, Apple, Audi and others (Zhang & Wu, 2017). The nation at the same time has
made significant amount of advancements in the field of technology which are needed to

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support the diverse business enterprises of the nation. These in short are some of the main
reasons why the nation of China has emerged as one of the major business hubs of the world.
Political Factors
Figure 1: Components of PESTLE Analysis
Source: (Created by the Author)
Vrontis et al. (2017) are of the viewpoint that the political environment in which a
particular organization operates had a profound impact on the business operations of the
concerned organization. As opined by Sodeyfi (2016), a congenial political environment
which is free from political turmoil strikes and others is one of the most basic requirements of
the business enterprises and it is seen that the business prospects of an organization depends
greatly on the kind of political environment in which it is operational. In this regards, it needs
to be said that the nation of China is being controlled by the Communist Party of China
(Gov.cn, 2018). Furthermore, the concerned party holds a monopoly in the nation and
regulates the diverse affairs of the nation on the basis of the political ideology of
Communism (Gov.cn, 2018). More importantly, it is seen that the Communist Party of China
offers patronage to the state sponsored or state backed business enterprises and the affairs of
the private sponsored business enterprises are relegated to the background (Chen et al., 2014).
In addition to this, the power of both media and also the common people had been curbed by

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the nation in a substantial manner and they have been amended to suit the requirements of the
ruling government of the nation. Thus, it can be said that the current political environment of
China actually acts as a threat for the organization under discussion here and also for the
marketing campaign of its product. The stringent hold that the Communist Party of China has
on the state machinery, trade and commerce and also the lives of the people is likely to
adversely affect the business prospects of the organization under discussion here and also its
marketing campaign.
Economic Factors
Artto et al. (2017) are of the viewpoint that although the nation of China belongs to
the category of the developing nations yet in the recent times the national economy of the
nation has become a major spoke in the economic wheel of the world economy. As a matter
of fact, the nation under discussion here has the 2nd largest economy of the world in terms of
GDP and the largest one of the world in terms of the “purchasing power parity” (Gov.cn,
2018). More importantly, the economic growth rate of the nation is 6.9% and the nation has
the highest population which in turn ensures the fact that required amount of labor would be
available to the organizations that are operational in China (Gov.cn, 2018). In addition to this,
as of 2017 the unemployment rate of the nation is only 3.97% which is way lower than even
some of the developed nations of the world (Gov.cn, 2018).
Figure 2: Comparison of the GDP growth rate of China with other nations
Source: Artto et al. (2017)

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The economy of the nation is dependent on both the agricultural and industrial sector
and this lends the much needed stability to the economy of the concerned nation (Chen et al.,
2014). More importantly, in the recent times it is seen that the nation of China is currently
charging very little amount of tariff in comparison to the earlier times. For example, in the
year 1992 the tariff rate charged by the nation was 40.75 whereas currently the nation is
charging only 7.70% (Gov.cn, 2018). Furthermore, the nation has active tie-ups with the
World Bank through which it offers the required amount of finance or capital to the business
enterprises of the nation (Chen et al., 2014). Thus, it can be said that the stable economy of
the nation actually acts as an opportunity for the concerned organization and also the
product which it intends to launch in the nation and its marketing campaign. For example, the
stable economy of the nation ensures the fact that the people would have the right kind of
capital to opt for the product offered by the organization. In addition to this, the high
population of the nation ensures the fact that the organization would not have to face labor
issues in the nation of China and also labor could be procured by the organization at a much
cheaper rate. Furthermore, the lower tariff rate charged by the nation means that the
organization under discussion here would have to spend lower amount of finance or capital
on import and export.
Social Factors
As opined by Fischer and Karlan (2015), the nation of China still follows the
traditional customs or culture of their nation and the individuals are required to follow these
traditional or cultural customs of the nation in a sacrosanct manner. However, at the same
time it needs to be said that the impact of the western culture has drastically changed the
cultural landscape of the nation and the citizens of the nation are openly embracing the
western cultures (Foss & Saebi, 2017). Furthermore, the people of the nation are very
concerned regarding the food as well as water that they consume and also regarding their
health (Cai, Feng & Zhang, 2016). The net result of this is the fact that they only for the food
product or water which are hygienic as well as safe for their health. In addition to this, it is
seen that the processes of globalization and internationalization has positively affected the
people of the nation and it is seen that they are actively embracing the products or services
offered by the various international business enterprises (Fischer & Karlan, 2015). However,
at the same time it needs to be said that the concerned organization would have to make some
changes in the business style which is being currently followed by it because of the

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differences in the national cultures of China and Australia. More importantly, to make the
business enterprise and its product a profitable one in the nation of China it would have to
integrate the national culture of China and also their business style within the framework of
their organization. Thus, it can be said that the social landscape of the nation of China is
likely to act as an opportunity for the organization under discussion here and also for the
marketing campaign of the product offered by it. In this regard, it can be said that the
organization can utilize the inherent desire of the people to consume safe as well as hygienic
products for the sale of the Natural Spring Water which is its main product.
Technological Factors
Botha, Kourie and Snyman (2014) are of the viewpoint that in the recent times the
nation of China has emerged as one of the most technologically advanced nations of the
world and also these technological resources of the nation are actively being utilized by the
different business enterprises for the purpose of their business operations. More importantly,
it is also seen that the different nations of the world are following the method of reverse
innovation to test the feasibility of their innovative technologies in the nation of China
(Blucher, 2018). These innovations or technologies have positively affected the nation of
China and it is seen that they are being used by the different business enterprises of the nation
to attain a higher level of growth (Ford, 2018). Thus, it can be said that the technological
landscape of the nation acts as an opportunity for the business enterprise under discussion
here and also for the marketing campaign of the product. For example, the business enterprise
can utilize the technological advancements of the nation to further enhance the quality of the
product that they are currently offering to the customers. In addition to this, the business
enterprise can also follow the process of reverse innovation to test the feasibility of new
innovative products in the nation of China and after they have proved success in China then
launch in the other nations. More importantly, the technological advancements of China can
be used by the organization to further improve the different aspects of their business
operations.
Legal Factors
As mentioned the nation of China is being controlled by the Communist Party of
China and the common people of the nation have very little say in the diverse affairs of the
state. For example, it is seen that the legislations of the nation related to trade and commerce

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only favor the state sponsored organizations and not the private ones. In addition to this, the
nation follows the market structure of monopoly wherein the state sponsored organizations of
the nation has monopolized the business market leaving very little scope to the private
business enterprises (Foss & Saebi, 2017). Furthermore, the free trade policy is being
followed by the different organizations of the nation and also the organizations need to pay
high import, export and other kinds of tariffs in order to conduct business in the nation.
Moreover, the ruling party of the nation holds the right to change the legislations as per their
convenience and also needs and this puts the different private business enterprises at a
disadvantage (Cai, Feng & Zhang, 2016). Thus, it can be said that the legislative framework
of the nation under discussion here acts as a threat for the organization Tasmanian Mountain
Waters and for the marketing campaign of the product that it offers to the customers. For
example, the ineffective legislative framework of the nation is likely to adversely affect the
business prospects of the concerned organization in the nation of China in a substantial
manner.
Environmental Factors
Santangelo, Dellestrand and Andersson (2018) are of the viewpoint that the
contemporary business enterprises are required to take into effective consideration the
damage that they are causing towards the environment and also take various measures for the
mitigation of the same. More importantly, this is directly related to the brand or the market
image of the organizations and thereby their profitability since the customers in the present
times have become much more conscious regarding the brand image of the customers (Chen
et al., 2014). In this regard, it needs to be said that the nation of China is a signatory member
of the Paris Agreement 2016 as per which the different business enterprises of the nation are
required to reduce the amount of environmental damage caused by them by more than 2%
(Gov.cn, 2018). In this regard, it needs to be said that this will act as an opportunity for the
organization since the organization already follows these stipulations for the purpose of their
business operations in Australia. Furthermore, the organization also has got the opportunity to
furthermore enhance its customer base and thereby the annual profit earned by them through
an effective consideration of the environmental factors.

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Recommendations
There are various measures that the concerned business enterprise can follow for the
mitigation of the export threats and also for the effective utilization of the export
opportunities. Some of the most important ones are listed below-
 One of the best measures through which the concerned organization can mitigate the
adverse effect of the high export rate charged by the nation of China is the
establishment of its own manufacturing plant in the nation. This will ensure the fact
that the organization does not have to export the product under discussion here from
Australia and thereby avoid paying the high export rate.
 The organization in order to reduce its operational as well as business cost in the
nation of China can enter into collaboration with the national government of China.
This is important because of the fact that the national government of China patronizes
the state sponsored organizations and the affairs of the different private organizations
are relegated to the background.
 Extensive usage of digital marketing as well as promotion is another possible option
for the organization because of the fact that the people of China are highly technology
savvy. This will not only ensure the sale of the product offered by the organization but
a higher profitability as well.
Conclusion
To conclude, the contemporary business enterprises need to take into effective
consideration the external business environment in which they are operational for the process
of their business. This is important since it offers an insight to the organizations regarding the
key competencies of their organization and also their business process. In addition to this, it
also offers important to the organizations regarding the threats and opportunities that they
face because of their business operations in the external business environment. Furthermore,
the business prospects of an enterprise depend greatly on the manner in which these threats
and opportunities are being utilized by the enterprise. This becomes apparent from an
analysis of the organization Tasmanian Mountain Waters and their product Natural Spring
Water in the business market of China.

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References
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value creation in facilities and their external environments: A study on co-
location. Facilities, 35(1/2), 99-115.
Blucher, A. (2018). Tasmanian bottled water company milks China demand. Retrieved from
https://www.abc.net.au/news/rural/2015-09-09/china-tasmanian-mountain-water-
demand/6761534
Botha, A., Kourie, D., & Snyman, R. (2014). Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Cai, D., Feng, T., & Zhang, Z. (2016). The Fit between External Involvement and Business
Environment: Evidence from Chinese Manufacturing Firms. International Journal of
Information Systems and Supply Chain Management (IJISSCM), 9(3), 46-64.
Chen, Y., Wang, Y., Nevo, S., Jin, J., Wang, L., & Chow, W. S. (2014). IT capability and
organizational performance: the roles of business process agility and environmental
factors. European Journal of Information Systems, 23(3), 326-342.
Fischer, G., & Karlan, D. (2015). The catch-22 of external validity in the context of
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Ford, S. (2018). Firm hopes for terminal relief. Retrieved from
https://www.theadvocate.com.au/story/3780770/firm-hopes-for-terminal-relief/
Foss, N. J., & Saebi, T. (2017). Fifteen years of research on business model innovation: How
far have we come, and where should we go?. Journal of Management, 43(1), 200-227.
Gov.cn, (2018). The Chinese Central Government's Official Web Portal. Retrieved from
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Hamilton, L., & Webster, P. (2018). The international business environment. Oxford
University Press.