...Expansion in China Prepared for: Eric Ng Prepared by: Yin-Fei Ge 6 May 2010 Executive Summary This report forms for previous analyzing the Chinese market and recommend entry strategies for Red Bull. This report focuses on analyzing the economic, political and legal, and culture environment. By analyzing the three environments one by one, some outcomes have been found and entry strategies are recommended. Major outcomes are: a. China has perfect market for Red Bull expansion. b. China has a lot of methods for transport the products. c. China’s political system and legal system are different from international political and legal system. d. China has a unique culture background. In addition, entry strategies have been formed for aim at outcomes. The strategies are: a. more selling with low price. b. Reduce the cost of transport cost. c. Create good relationship with government. d. Expansion with study the host country’s culture. Recommendations have been made that, if implemented, should help Red Bull achieve on expansion to China. TABLE OF CONTENTS Item Executive summary 2 1. Introduction 4 2. Background 4 3. Market Analysis 4 1. Economic Environment 4-5 2. Political and Legal Environment...
Words: 2093 - Pages: 9
...Because China has the most economic opportunities and presents the greatest threat to the personal and small business computer VMTECH Sys has identified a strategic need to establish a research and development division to be physically located in China. This research paper will analyze and review the economic opportunities and threats that VMTECH R&D can expect to encounter as well as other market conditions which will affect the operations of a division located within China. Market Entry Method It is essential for VMTEC Sys to establish a presence in China. Rather than trying to import goods or services to sell, the company has chosen to establish a research and development division in China. VMTEC Sys will form a corporative joint venture known as VMTEC R&D, which will operate as a division of VMTEC Sys. The parent company will provide capital funds to entice participation of a local owner who will provide labor and manage the research and development division. In a recent article, written by a CPA, there are several reasons for establishing a business in China: Lower labor costs, opportunities for growth, and access to highly motivated and educated workforce (Rowbotham, 2009). By forming a corporative joint venture, the company will be able to enjoy the benefits of lower labor costs, establish a base for growth opportunities, and have direct access to highly motivated and educated workers. The corporate joint venture will be formed according to the legal entity...
Words: 1089 - Pages: 5
...setting up new operational facilities. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees. In order to decide which country is better for ‘greenfield’ foreign direct investment via sole ownership, the advantages and disadvantages of the countries should be considered. For example, China is a developing country, and during the past 30 years, China’s rapid economic development shows that China has a strong power in developing economic. In recent decades, China stays on one of the leading positions in direct investment and therefore a lot of investments to this country are considered to be profitable for any company or investor. The reasons are simple: the growth of the economy and a large number of different projects. Foreign direct investment in China, due to stable growth potential of the economy and a huge production resources, aimed at both the external and the internal market.The innovative ability is a great attraction for investment managers around the world. In contrast, a lot of foreign investors had chosen China for investment and this resulted in a very big competition. Nevertheless, USA is a successfully developed country. And its economy is the top one in the world. As the most important country in the first world countries, the USA has many good experiences in global business. The most strong enterprises were set in the USA and it means that the competition in the USA is...
Words: 5010 - Pages: 21
...Chapter three Governmental and legal systems CHINA COMPLICATED RIS, BIG OPPORTUNITIES During its thirty years of communist rule, China prohibited foreign investment and restricted foreign trade. Then, China enacted the Law on Joint Ventures using Chinese and Foreign Investment in 1978. China’s subsequent transformation has been fueled by a landslide of foreign investments made in response to the country’s market potential, market performance, improved infrastructure, enormous resources, and strategic position. Frustrating this process, however, have been the politics of China’s elaborate bureaucracy, as well as its ill-defined legal system and pervasive corruption. Historically China has relied upon “the rule of man” and the belief that legal rights are derived from the power of the individual. Upon joining the WTO, China agreed to continue to reform its business environment and to move toward transparent, rules based, enforcement-oriented standards. But the business reality is far from the WTO obligations specifically in the continued controversy over the protection of intellectual property. Chinese enterprises are themselves becoming global investors, both by acquiring foreign firms and investing in foreign lands. INTRODUCTION For a multinational enterprise to succeed in countries with different political and legal environments, its management must carefully analyze the fit between its corporate policies and the political and legal conditions of each particular nation...
Words: 4132 - Pages: 17
...Chapter 2: The Political, Legal, and Technological Environment Learning Objectives and Chapter Summary |1. |INTRODUCE the basic political systems that characterize regions and countries around the world and offer brief examples of | | |each and their implications for international management. | | | | | |The global political environment can be understood via an appreciation of ideologies and political systems. Ideologies, | | |including individualism and collectivism, reflect underlying tendencies in society. Political systems, including democracy| | |and totalitarianism, incorporate the ideologies into political structures. There are fewer and fewer purely collectivist or| | |socialist societies, although totalitarianism still exists in several countries and regions. Many countries are | | |experiencing transitions from more socialist to democratic systems, reflecting related trends discussed in Chapter 1 toward| | |more market-oriented economic systems. | |2. |PRESENT an overview of the legal and regulatory environment in which MNCs operate worldwide, and highlight differences in | | |approach to different legal and regulatory...
Words: 4480 - Pages: 18
...University of Nottingham Ningbo China Business School Academic Year 2015/16 Autumn Semester INTERNATIONAL BUSINESS ENVIRONMENT Lianxi Zhou EBay: China and India External Business Macro Environment Entry Report Group 2 Hugo John MASON; ID: 6513963 Boon Long Tan; ID: 6512494 Sung Jun PARK; ID: 6508247 Yasong ZHAO; ID: 6511938 Word Count: 3000 Table of Contents Introduction 2 China 3 Political Environment 3 Political and Legal System 3 Five Year Plan 3 One Belt, One Road 4 Risk 4 Economic Environment 5 Market Size 5 Currency 5 FDI 6 Socio-Cultural Environment 8 Guanxi 8 Hofstede’s Model of National Culture 9 China Recommendation 11 India 12 Political Environment 12 Political and Legal System 12 Opportunity 13 Risk 13 Economic Environment 14 Market Size 14 Currency 14 FDI 15 Regional Trade Blocs 16 Risk 16 Socio-Cultural Environment 17 Socio-Demographic 17 Trust and Uncertainty Avoidance 17 Human Resources 18 India Recommendation 19 Reference 20 Appendix 25 Introduction In recent decades a global shift has arisen and revolutionized the way businesses operate as we move into a more integrated and interdependent global economy. Known as Globalization, the e-commerce industry has been the crux of such a radical metamorphoses of nations. National economies are no longer self-contained and independent. China, having one of the fastest growing e-commerce markets at 22.6% (iResearch, 2014) has...
Words: 4821 - Pages: 20
...the general business environment in order to manage the future opportunities and threats from probable changes in the environment (Mullins 2002) by analyzing the Political and legal conditions, Economic conditions, social and cultural conditions, technological conditions and environment related issues. In the following we will execute a PESTLE Analysis on the E-Commerce sector of the Chinese market. And as proposed by Neil Botten (2008, p.39) that there are no pure factors because these factors are interlinked. Political and legal analysis Political factors include government regulations and legal issues and define both formal and informal rules under which firm must operate. And it is claimed that the political force is probably the most turbulent force in the environment (Fahey & Narayanan 1986). In the past one decade, the Chinese government attaches great importance and focus to the development of e-commerce in the most populous country, for example, on issuing the Summaries of the Middle/Long Term Science and Technology Development Plans of China and the Development of Information Industry Plans in the Eleventh Five-year and Long Plan in 2020 Years in The Ministry of Information Industry, the “application of e-commerce platform technology” has been listed as a key point (Li 2010, p.260). In term of the legal system, the Chinese legal framework for e-commerce is still in its nascent stage and has already experienced several problems. China has limited experience...
Words: 1452 - Pages: 6
...Economic Environment: Economic Environment is a vital component of the mega environment from the standpoint of strategic planning. Any industry and Business depends heavily on economic environment (Ramaswamy & Namakumari, 2007). Fortune of industry and business heavily rests on the purchasing power of the people and purchasing power is largely a product of economic environment. The economic factors that affect the Google industry are: Economic Conditions of different segments of population, their disposable income and purchasing power. Trends in income distribution and consumer-spending pattern, income, savings and credit availability. Rate of inflation, Tax rates & Interest rates and exchange rates. Behavior of capital markets: The corporate sector and capital market are important indicators of sophistication and growth of an economy. Political Environment: the political environment exercises great impact on industry and business. With development on the political front affecting the economy, the economic factor often becomes by-product of the political environment (Ramaswamy & Namakumari, 2007). The political factors that affect the Google industry are: Form of Government Political stability Tax Laws Laws related to the hiring and promotion of employees Technological factors: Technology is a major force for industry and business to reckon with. Technology leads practically all forces that shape people’s lives. For a business firm, technology affects not only its...
Words: 826 - Pages: 4
...market and discuss how macro-environmental factors (otherwise known as PEST – political/legal/regulatory; economic; social/cultural; and technological) would impact Cochlear’s global marketing mix. Introduction Cochlear is a leading global biotechnology company that specialises in the design, manufacturing and supply of Nucleus Cochlear Implant, the Hybrid electro-acoustic implant and Baha bone conduction implant. The company was formed in 1981 with the support of the Australian government to commercialise hearing implants, and today it holds over two thirds of the worldwide hearing implant hearing market (Cochlear, 2013). It is predominantly run in Sweden and Australia, with one of their major offices here at Macquarie University. With sales of $297 million in Americas, $286 million in Europe, the Middle East and Africa and $123 million in the Asia Pacific Cochlear supplies to 100 of countries worldwide, which allows them to use $119.3 million on research and development in 2012. (Cochlear, Annual Report 2012, 2012). Judging by these figures Cochlear have been very success in integrating their assets into global markets. In this report we will discover what adjustments would need to make to Cochlear’s marketing mix in order to fit into the Chinese market. Political In this current day China’s market development the prospects of economic gain has been a major factor within their political environment. Their private sector is it’s driving force and their central government adopts...
Words: 1352 - Pages: 6
...The University of Nottingham, Ningbo, China Division of International Business China and the World Trade Organization P13608 Module Outline Module Convenor: Dr Chieh Huang AB Room 379 chieh.huang@nottingham.edu.cn Office hours: Monday 10:30-12:30 10 credits TB329 Tuesday 2-4 PM 10 weekly two-hour lecture/seminars The course is taught by way of lecture/seminars which are two hours in length. The form of the lecture/seminars will be flexible, depending on the topic under consideration. Students are expected to participate fully in discussions in lecture/seminars and to have read all the set Essential Reading before class. Credits: Lecture Venue and Times Method of Delivery & Frequency on Class: Method and Criteria of Assessment: 100% Coursework (5000 words) Essay Submission Deadline is 4pm, Wednesday 27 November 2013 Topics: Please choose one area listed below and discuss its recent development in the context of China. You will need to narrow down your focus and set your own essay topic. 1. 2. 3. 4. 5. Non-market Economies in the WTO Energy Industry and the WTO Environment and the WTO Commentary on one WTO case involving China Self-selected topic upon approval (You are most welcome to decide a topic yourself. Once you decide to do so, however, you need to submit your topic and an one-paragraph abstract before 4pm 31 October. ) Module Aims: To give the students a broad knowledge of the multilateral trading system and China’s interaction with that system through...
Words: 3456 - Pages: 14
...CHAPTER THREE THE POLITICAL AND LEGAL ENVIRONMENTS FACING BUSINESS OBJECTIVES • To discuss the different goals and functions of political systems • To profile trends in the emergence and diffusion of political systems • To identify the idea of political risk and approaches to managing it • To understand how different political and legal systems affect the conduct of business • To profile trends in the evolution and diffusion of legal systems • To examine the major legal issues facing international business companies • To profile the idea of intellectual property and the basis of concern and controversy Chapter Overview When firms source, produce, and/or market products in foreign countries, they encounter dynamic and challenging political and legal environments. Chapter Three provides a conceptual foundation for the examination of the political and legal dimensions of international business operations. It compares major political regimes, discusses their potential influence upon the development of effective business strategies, and considers the relevance of political risk. The chapter also examines the major types of legal systems that exist today, as well as the strategic and operational concerns they pose. It concludes with a discussion of intellectual property rights and the associated challenges confronted in an age of globalization. Chapter Outline OPENING CASE: CHINA’S BUSINESS ENVIRONMENT [See Map 3.1.] During its thirty years...
Words: 2792 - Pages: 12
...stresses the importance of the interaction between Government and business, and how policies can effect business decisions, and both Vogel (1996) and Ryan et al. (2003) suggest that society is dependent upon both parties to address issues such as quality of productions, medical care and environmental protection. In the global financial crisis, both China and the United States (US) felt the strain of national debt. China is dependent on the US during this unstable economic period as their leading trading partner and importer of Chinese products, and likewise the US depends on these Chinese exports, largely for electrical machinery and power generating equipment (The US-China Business Council, 2009). However, for a business looking to establish itself in either China or the US, the question at hand is which country would be the most stable and economically beneficial environment for the business. This paper will provide an evidence based answer, after identifying each of the political regimes for China and the United States, and the effects they have had on businesses. Martin (2010) defines the political structure of the Peoples Republic of China ultimately as a one party system that is comprised of two different, yet adjoining, institutions; the Chinese Communist Party and the State Government Apparatus. Both structures mirror each other, as Communist Party representatives work within the Government and...
Words: 1967 - Pages: 8
...Government of China A Case Study in Cross-Culture Negotiations 1. Who are the stakeholders in this case? * The owner, the shareholders and the employees of Google * The internet users * The biggest rival of engine market Baidu and other enterprises * The China government 2. What are the important issues for each set of stakeholders? * For Google itself: Google employees will be unable to work in China; This was also reflected in the stock and other areas. After the incident, the Google shares fell, the company earnings will directly affect to the global strategy. * For the internet users: Google quit from China made such adverse impact, and it’s harmful to China's international image, in the search engine industry, there has no competition, users can only use Baidu. * For Baidu: We all know Baidu is China's largest search engine company, after Google's withdrawal, No competition will make Baidu's growth rate reduced. So it has good and bad effects to Baidu's development. On one hand, Baidu can enhance its own competitiveness, the market share and the stock go up rapidly. but on the other hand, Baidu's ills on the lack of creativity are manifested. * The influence of the government: Google quit from China, the most influential image is China's investment environment. Originally foreign invest in China have been very troublesome, if even Google---such a well-known high-tech companies are being squeezed away in China, that will make...
Words: 968 - Pages: 4
...Introduction Classic texts such as Chanakya's Arthashastra (India) written in the 3rd century BC, Sun Tzu's The Art of War, written in China 2,500 years ago, the political strategy of Niccolò Machiavelli's The Prince, written in 1513, or Carl von Clausewitz's On War, published in 1832, are all still very popular, referenced, and highly regarded and followed. Strategy defined by these writers entailed from Political, game, war or social genre. For this assignment, we deal with business strategy or strategic management in today’s environment in the management world. Strategy could be simply defined as a plan of action to achieve any particular goal. In broader terms, Strategic Management refers to a process of combined activities; mainly, Strategic Analysis (required to develop an apt strategy), Strategy Formulation (process of transferring the analysis into a plan – intended strategy); and, Strategy Implementation (process of putting plan into action – realized strategy). The purpose of this assignment is to develop a comprehensive strategic plan for an Organization for its mission and vision to achieve goals. We have chosen ChinAfrica Magazine for this very purpose. ChinAfrica Magazine was first published in 1988 in English and French edition. Its paper version was suspended in 2001 due to internal financial problems; and, the new English monthly magazine was re-launched in October-2009. Their existing website is in English, Chinese, and French; thus, catering to a range...
Words: 1793 - Pages: 8
...of Mexico could be further expanded. The analysis completed was a competitor analysis; Bristow, PHI, and CHC are all industry leaders bringing their own expertise to the table. Bristow is one of the largest companies in the industry and recently started using TCAS2’s (traffic collision avoidance system) for new equipment. PHI dominates the North American oil and gas market, and has the most air time experience of all firms. CHC also has strong ties with oil and gas firms, but after a significant loss they are looking to be acquired by another firm. Overall the helicopter industry is growing due to the new exploration sites for oil and gas, and many opportunities exist. The second part of the analysis was comparing the economic, political, legal systems: and cultural, ethical, and human rights standards of the three countries to gain further insight into the degree of risk each country has. Australia has proven to have a resilient economy during the recession due to the growing oil and gas industry. Foreign business has been encouraged through...
Words: 8136 - Pages: 33
