UHT Milk's International Business Strategy & China Market Analysis

This report provides an analysis of Ultra High Temperature Pasteurization (UHT) Milk company's strategy to export milk products to the Chinese market, targeting children aged 3-11. The primary goal is to enhance brand value and expand the business efficiently. The report highlights the potential for increased productivity due to the company's commitment to providing high-quality products for children's health. An industrial analysis is conducted using the PESTLE framework, examining political, economic, social, technological, legal, and environmental factors influencing the business. The report also addresses trade barriers, ethical and social issues, and cultural preferences in the Chinese market. Furthermore, it includes recommendations for the organization to navigate upcoming challenges and ensure successful business operations in China. The report concludes by emphasizing the importance of adapting to the Chinese market's unique characteristics and maintaining ethical and socially responsible practices.

International business

Executive summery
The presented report which is based on the organization named as Ultra High Temperature
Pasteurization(UHT) Milk company. The report mentioned that the organization will export the
milk product and services to the Chinese marketplace for the age of 3 to 11 year old kids. The
aim of exporting product to Chinese market is to increase the brand value of the company and
expend the business in effective as well as efficient manner. From the analysation of the study it
is determined that the customers of the organization has potential to obtain the productivity of
the company as the organization will offer best quality product to the people for good health of
their children. In context to that the presented report conduct the industrial analysis with the
assistance of PESTLE framework. Along with that the study reflect the recommendation for the
welfare of the organisation which deliver support in dealing with the forthcoming challenges.

Table of Contents
Executive summery.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Business drivers...........................................................................................................................4
Trade barriers...............................................................................................................................6
Ethical and social issues..............................................................................................................8
Cultural preferences.....................................................................................................................9
Expansion method.....................................................................................................................10
Recommendation.......................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
International business refers to process of transferring good and services to the variety of people
from one place to another. The entrepreneur or the business enterprise contributes in the
economy of different natation by exporting and importing the product and services to meet the
taste and preferences of the consumer. The present report is based on the international corporate
company renowned as UHT milk for the children aged. It is one of the leading agriculture sector
company. In the economy of UK the agriculture sector contribute approx 17% in annual
productivity. The industry exports various milk product to the international firms in effective as
well as efficient manner. dairy or milk business is the one of the largest business in the united
kingdom. The present report indicate that the milk organization have opportunity to expend the
business in Chinese marketplace with the assistance of internationalisation process. In conrtext
to that the organization will generate revenue, boost the sales with innovation,by provding
affordable prices of commodity, invest and hire new talented candidate for the welfare of the
organization.
MAIN BODY
Business drivers
It is known as key inputs activities that affect financial and operational result of business. Along
with this, these factors are generally present in external and internal market area. It need to be
manage by the company in effective manner so that it can sustain in the market and deal with the
competitive advantage (Wisetsri and et.al., 2021).
In addition, in order to identify the drivers, the company can make use of various strategical
tools as it will help in making right decision for business.
PESTLE
This is known as strategic tool which helps the organization in finding the external factors which
can affect both in positive and negative manner. The dairy industry is mixture of agriculture and
deals with sale of milk product.
Political: This factor is consisting of government policy and regulation regarding agricultural
products and it can be in favour of company or not. Although UHT has to make healthy relation
with political party so that it can support their ideology and there will be less effect on company.
Along with this, policy like lockdown has changed the taste and preferences of the customer and
they are buying only heathy food. The organization can suffer from such policies and the

incentive will motive farmer (Turkyilmaz and et.al., 2019). Moreover, it has been found that
UHT need to deal with the guilders related to corona virus in order to avoid harm. In addition to
this, political factor can affect the organization in both positive and negative manner so UHT has
to follow all the norms set by China government regarding marketing and food production.
Economically: This factor mainly consists of GDP rate of the country and UHT will be
opening in China which will be beneficial for the organization as it economy is very good
Although major factor of contribution of China economy is agriculture due to its large
availability of land. Along with this, if there has been increase in price of milk product there will
be no reduction in the quantity and it will not lead to complete stoppage. Thus, if there is
reduction in price then it will contribute in increasing the sales (Kara, 2018). However, milk
product is perishable in nature the price of the product should be appropriate. The hike in the
market or drop can lead to intense competition which may lead as a consequence. Thus, for
running the company in China market the organization need to lower selling price as compare
to competitor so that it sustains.
Social: This is consisting of factor related to customer changing taste and preferences and the
current market trend. Along with this, UHT has to increase their brand image in the market area
so that customer can trust their product and the awareness is generated in the market area.
However, it is important for the company to fulfil the needs of the customer in effective manner
and it should be of prime importance (Benz and Jaax, 2022). It has been found in the market are
that consumer are demanding for low fat free and lactose free healthy milk product. Thus, UHT
has to follow such norms so that it can grow their customer demands.
Technological: UHT has to integrate various IT department within the company so that it can
maintain the smooth flow of function and improve their growth rate. Along with this, the
company can utilize advance machinery so that milk can be store and work can be conducted in
fast pace. UHT can make use of Cloud service data so that it stores relevant information and
keep the track of daily activity (De Melo and Solleder, 2020). However, company ca develops
their mobile application so that it can track their tankers through GPS as well as monitor the
temperature of the warehouses. Along with this, for identifying the changing taste and
preference of customer can make use of analytics and digital marketing for selling the goods and
services.
Legal:

It is consisting of various law made by the government in order to maintain the peace in the
society. So company has to follow all such rules and regulation in order to avoid intervention of
government or NGO. Moreover, UHT has to follow laws related to health and safety,
employment act and company law (Vakulchuk and Knobel, 2018). The intervention of
government may include labour laws, environmental, taxes and the quality of product. Although
a team of expert can be set by the company so that it can check compliance related to change.
Environmental:
The company will be following making use of organic products and help farmer to produce such
kind of items. The organization will be following CSR activities in order to give contribution
towards society.
Trade barriers
Barriers to trade can be define as government imposed restriction on the flow of
international services and goods it can be obvious and non – obvious in nature. Moreover, the
most common direct barrier to trade is an embargo such as political agreement which limits a
foreign country to export or import. There are four major trade barrier refers to the elimination of
barrier to international trade. The most common are tariffs, quotas, subsidies and non-tariff.
Although tariff is a tax import which is collected by government and it raise the price of the
goods to consumer as well as it is also known as import duties which aims at to limit imports and
raise revenue. Moreover, quota is a limit on the amount of certain type of good which is
imported in a country and it is legally enforced or done voluntary (O'Brien and Mitchell, 2018).
Although the effect of tariff and quotas is similar in nature such as it limits imports as well as
protect domestic producer from international competition. Tax also increase the demand of the
foreign good that reduce their demand and supply. Similarly, quota limits the supply to certain
amount which will raise the price of the product compare to local market level which will
decrease demand. Tariff is also divided into two parts peril point tariff so save domestic industry
from diminishing whereas retaliatory tariff is one that levied in response to tariff by trading
partner. Although non-tariff barriers include regulation, quotas relating to product that hinder
import. In addition to this, barrier to trade is a government subsidy to a particular domestic
industry which make the goods cheaper to produce in foreign market which result in lower

domestic price. However, barriers of trade are commonly known as protection as their main
motive is to advance particular industries or segments of an economy.
Furthermore, the government trade policy can affect the business by making is easier or
difficult to trade across international border. Although trade policy may include imposition of
import tariffs, exports of certain goods, quotas and subsidies for local marketers in order to
support them against international competition. In addition to this, government often enter into
agreement with other countries in order to reduce tariffs and barriers to business as well as to
establishing a free trade in common market area (Benz and Jaax, 2022). Such policy can be
beneficial for the company but it can also increase the competition in the market. Moreover,
government policy may have number of implication on business as it includes tax and interest
rate which impact indirectly on company through public spending. Tax law can increase or
decrease the amount of tax that organization has to pay and therefore it changes net profit as well
as special rule may affect overall growth of business sectors (Thakur, 2021). Although tax laws
are complex in nature this company has to hire tax specialist so that it can give advice to the
organization. It does affect upon the customer income which indirectly impact in sales. In
addition to this, foreign affairs affect trade abroad and it is consisting of various ways in which
country seeks to promote and protect their own interest internationally. It mainly related to
facilitating of trade across international boarder like cutting export and import tariffs as well as
promoting investment in international trade. However, in case of dispute with countries such
agreements usually get suspend and in emergency case embargoes may have imposed for
applying restriction on trade. The foreign affairs can target other areas of international trade
such as climate, change, human rights and armed conflicts which may create consequence for
international trade (Pan, Chen and Zhan, 2019). Thus, UHT has to look up all the policies of
Chinese government in order to sustain in the market area as well as to avoid legal intervention
of government as it slow down the process of company as well as affect the brand name.
However, after considering such points organization should decide their price of product. Thus,
change in the trade policy can alter the costs of raw material, tariffs of export and import. It will
also change the price and profitability of business markets and it will lead to find attempts for
alternative sources or materials. The political uncertainty will also cause instability in the market.

Ethical and social issues
Corporate social responsibility is refers to the concept of management that is integrated
social and environment concerns in their business operations and interaction with each
stakeholder. CSR help for demonstrate all the social issue which can be impacted rather than
profit margin, so that it help to attract customer who share the same value. Also, corporate social
responsibility is important when operating business internationally. This is help for improving
the public image of company also UHT is already very well-known organization. Such as , staff
members volunteering an hour as week at charity this is help to improve the public image of the
company (Dominguez and Mayrhofer, 2018). When the public image of the company is good it
directly helps to improver the social issue faced by organization due to any reason. For the
favourables consumer it is necessary for developing the process of including recycling as well
ass it helps to attract core value that is being committed with environment. At the global level it
is necessary to consider the social aspect of the country in which company expand such ass
China so at that time it is necessary to focus on ethical and social issue of China.
Ethical issue are necessary to consider while expanding business such as outsourcing,
working standard and condition, workplace diversity and equal opportunity, trusts and dignity,
human right, supervisory, religion etc. The rapid growth of expansion of internationals business
has increased demand for qualified professionals who are familiar with the global market, ethical
issues. For the Dairy production it is necessary to consider in China for producing greenhouse
gas emission that help for contributing the climate change (Shi, Graves and Barbera, 2019).
Then poor handling of fertilizers and manure cans bes decade local water resources. Then
unsustainably dairy farming and feeding production can be impacted by loss of ecological
importance areas. Then, Chinas is not good at farming or dairy production so it is more focus on
import from other countries. UHT has the advantage of successfully expanding the business in
China by making more profit. For ethical issue it is related to developing the environmental
problem. (Chinas) has weak management and accounting system in Chinese companies makes it
all to easy for mangers in order to engage with ethical and criminal behaviour. The unethical
behaviour may leading the organization by distrust their own people.
From very long China has taken the advantages of manufacturing process in order to
serve in the enormous market. Also,s firm is largely aware of potential business risk that is
related to consider as theft of intellectual property ins order to navigate the corruption. Also, it

can be said that UHT should concern about risk of firm's reputation and ethics. From the recent
situation it is necessary to manage ethical encryptions.
Cultural preferences
Cultures is refers to the all the ways which are including arts, beliefs of population that
are passed down to generation and this is also called the way of life for entire society. This is the
set of activity performed by human which is related to all the activities such as social, rituals,
standards and tradition. The significance of Chinese culture is all about one that is Confucianism,
that is related to relationship which is focus on building crucial network as well as value of
solidarity, modesty, loyalty and courtesy (Menzies, Orr and Paul, 2020). Also, in hierarchy in
China both the business and privacy is vertical and highly respect. Also, they are more focus on
maintain the respect and dignity in order to mores focus on using western approaches that is
emphasizes on value. The global convergence on business culture codes and international
business values can bes increasingly observed by China. In contexts to UHT it can say that
company should focus more on strict procedure in order to take decision-making process. All the
decision should be made on the basis of meeting and support of subordinates in order to get
solution for particular problem. This is also necessary to focus on alternative and solution and
how chosen can be performed well in Chinese market. This is related to long term process which
is perceived as slow-moving and it deals with hierarchical preferences that must be respected in
order to try for making decision accordingly. They are more believe on maintaining the long
term relationship that help for strangers and interactions, This is also helped for developing the
relationship which h is including all the element that is trusted by business associated with the
potential partner (Oliva, Fábio Lotti and Miguel Pina Cunha, 2020).
Another culture is followed by Chinese are related to faced that is the concept of
purposes and importance of business interaction in order to maintain pride, dignity and
reputation of the firm. UHT should more focus on customer relationship and adopt Chinese
culture to develop the interaction and build good relationship. On the other, Chinese are
sometimes insulted others by underlining the official status for higher organization. Then giving
face is related to the compliment of doing something also it is increase the self pride. This will
help the productions of the company s well as it help to motivate other on the basis of pride and
dignity. This culture also help to get loyalty in order to maintain the self-respect so that it help to
focus more on it. In context to international business, local culture is extensive in order to

managed pace at business and how it can be handled for managing the risk. This is also related to
the local business practice in order to stand in the crucial market. Then another approach is sued
by Chinese people Guangxi that is related to culture affect how marketers are welcomed in the
country. For instance, the high ranking Chinese personnel market products are spirit of localism
adopted by Chinese that is work for own country. It can be typical to manage by UHT because
Chinese are stuck at their own rules and regulation in orders to get benefit.
Expansion method
The process of globalization is related to operating the activities by firm that is globally
maintained in the process of internationalization by putting primary sites of attention.
Internationalization is the process of increasing the involvement in operations that is operated
outside the domestic country. SMEs and internationalization is most important process which
help to determining the value and importance of competitive advantages. This can be related to
partnership with foreign companies, cross border networking and foreign investment that help
for increasingly and facilitating exchange of technology, product or services (Yew, 2022). There
are different types of methods are available in order to expand the business internationally such
as export, this is the most common strategy which is help SMEs in order to export of goods and
services which is directly involved in the process of direct exports and also have commercial
intermediary which can be negotiated and distribute the product top abroad for indirect exports.
Also, another range is related to opt for foreign direct investment that help for decreasing the risk
of product in the foreign country also it will help to provide the minimizations of risk
implementation.

Figure 1 Sales volume
Source: (UHT milk sales volume in Great Britain from October 2009 to October 2018, 2022)
To adopting a licencing strategy can be help fort agreeing on subject to payment of
royalties and get the propitiatory resources for specific period. This process is help for making
the good image of organization by taking place in new market. On the other hands, disadvantage
is related to foreign company is not parts of parent company. The major risk can bear by licensee
that can become competitor when licences expire. The another strategy is related to set up the
franchising which is commonly known as commercials affiliation that can be chosen by
company in order to pay fee to franchisor (Mayrhofer, 2018). In this process only franchisor is
responsible for selling product and services. If company using internalization franchise, it must
follow franchisor price, quality and advertising that can bes used fore internationalization market
in order to more focus on operating brand image.
To building the joint venture with the company help to associate with two or more
companies for the given period with common purpose such as management, capital, profit and
loss etc.

Figure 2 Market size
Source: (UHT Milk Market, 2019)
Recommendation
From the above strategies it has been analysed that most preferable strategy for SME
internationalization is related to export so that UHT can focus more on improving the brand
images as well as it will to develop the business by expansion internationally (Fábio, 2020).
Further, on the basis of strategic evaluation framework it can be said that it will help chosen
organization by enforcing constant benchmarking in order to evaluate product developing
process by consider by measuring the performance also it will help UHT in order to increase the
production of company as well as it will help to improving the brands image of organization by
using export of large number of dairy product to China.
CONCLUSION
From the above report it will be concluded that the organization has the potential to enter the
Chinese market in an appropriate manner. Along with that the company has opportunity to
acquire profit from the international market. With Thwaite assistance of the various plans of
action and determination of taste as well as preferences of the consumer the organization can
grow higher and meet the high demand of the market in the china. From the analysation of the
report it is determined that the target or the potential patrons can afford the productivity of the
company in adequate manner. Furthermore the report highlighted that if the demand of the milk
will increase then the demand for the animals also increase in the marketplace. Basically the
milk and cow is the complementary goods. The production of milk is not possible without dairy
cows. For entering the foreign market the organization has various option or the opportunity