Regional situations by reducing the information quantity needed to

Regional and Country Analysis

The economy in China has enjoyed growth of approximately 7%
and a 10% reduction within the poverty level. The middle class has increased to
roughly 350 million residents. (Brander and Spencer, 1998) With the median age
of 25, this highly educated group has a great deal of disposable income and
proves to be a perfect target market for Nyetimber. A Wine and Food article
reported that the wine trend will grow by 30% in the next five years, as
China’s new middle class grows and the culture becomes more modern, religious
and social taboos regarding wine drinking have diminished. All these factors
prove to be a favourable market in which to enter for an international firm not
familiar with local customs and culture.

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Strategic Planning analysis

After completing a comprehensive environmental regional and
country analysis, I feel very confident china would be an excellent market for
nyetimber to break into. I have conducted a SWOT analysis on the Chinese wine
market. A SWOT analysis has been a useful tool for analyzing complex strategic
situations by reducing the information quantity needed to achieve a better
decision (Helms and Nixon, 2010). SWOT analysis considers both the current
strengths and weaknesses and the future opportunities and threats (Corsi et
al., 2013). The SWOT analysis has been applied in many scientific fields
including studies of wine industry.

 

Strengths: Growing market in China, Expanding middle class
with disposable income

 

Weaknesses: Nyetimber not currently a well-known brand
outside the UK.

 

Opportunities: 7% growth in population; 1% upper class
market, British seen a hallmark of luxury.

 

Threats: Strict import laws and heavy fees on alcohol Direct
Sea import channels for port of entry

As Driscoll explains, export modes can include either a
direct export from its local market to the foreign market or an indirect
involvement through an appointed trading house. Initially I planned to
establish both direct and indirect distribution channels for entering the China
market. However, after completing the SWOT I determined that a direct entry
would be most appropriate. By partnering with internal distributors, Nyetimber would
be able to bypass the need to establish facilities and distribution centers
within China. This would help the company to avoid cultural and legal
restrictions that might occur. Financially, partnering with an internal
distributor will also negate any initial startup costs normally associated with
entering a new market, especially an international liaison. (Dessler, 2001)

 

Rationale for Target Market

As Nyetimber begins to pursue the opportunity of global
expansion to China, a risk assessment would need to be conducted to present to
the board of directors and investors. Through this analysis nyetimber can consider
the various risks involved in this type of expansion and methods to manage the
identified risks. A SWOT analysis is used as one tool to identify and summarize
the strategic planning process. (Spence, 1999) risk assessment will be
discussed in the following below.

China’s political stability reduces the risk of foreign
companies trying to establish a business in the country. Therefore, with such
low political risk involved in investing in China, Nyetimber can feel confident
in continuing to pursue opportunities in China.

 

New Marketing Initiative

 

I have built a business plan for Nyetimber exporting to
china based on several of these research market results. The market research
tools and analysis will helpful to provide the necessary information to
determine the five W’s of marketing: Who, What, Where, Why, and How. (Montero,
2002) A regional and country analysis was conducted to ensure that no viable
obstacles obstructing the entry of Nyetimber into the China market exist, with
emphasis upon the economical, geographical, and political environments in which
Nyetimber would be encountering.

Product analysis was also provided by interpreting both
internal and external factors that exists within the company and the industry.

Nyetimbers decision making process will also need to place
importance on recognizing the SWOT analysis provided by research and management
initiatives. By closely interpreting the anticipated results generated by the
SWOT analysis, Nyetimber management would be better situated to making the
initial decisions of expansion possibilities and probabilities. With using
direct entry Nyetimber management would also generate a business plan that
incorporates a full operating schedule, with emphasis upon distributor
logistics and contingency plans for unaccounted obstacles.

Financial risk management is another key management tool
that Nyetimber will use to determine exactly how dealing with the China
government and currency will affect the ease with which Nyetimber can enter
into the wine and financial markets. Marketing and distribution networks should
also be examined to identify how Nyetimber can use existing corporations and
distributors to help with the social and cultural issues that face importing
companies. Financing sources will also be analyzed to determine how
international lending sources can best be used for any financing needs
associated with international banking and import/export issues. Finally, an
exit strategy should be generated and analyzed as part of the business plan to
account for a proper and profitable exit if necessary. By using all these
management research tools, market research analysis, financial resource
options, understanding governmental controls and restrictions, and
understanding the social and cultural conditions present in China regarding
wine consumption, Nyetimber Winery will be best able to determine whether or
not the decision to import Nyetimber Wine into China should be presented and
executed.

 

My final Recommendations to Nyetimber Winery executives are to
pursue an international expansion into China. The strong economic growth of
China coupled with the growing middle class with large disposable income is the
ideal market for introducing a new luxury item such as imported wine. This ideal
market of China has also experienced positive changes in both social and
cultural beliefs associated with alcohol consumption, allowing for a more
flexible and cultural acceptable entry into the wine market. Without this
changing culture regarding alcoholic consumption, the leadership could not
recommend pursuing the market within China. These strong characteristics of the
targeted market make a very favorable environment for Winworld to enter China.