Abstract
The purpose of the following paper is to discover the marketing strategy analysis of Woolworths if they expand into China. The importance of the foreign market entry is very important for the expansion of their business. Woolworths will look to enter the Chinese market. The different components for entering the Chinese market have been discussed. The different approaches have been used here like the external environment of China. The religious and cultural issues have been discussed as well. The market entry strategies are analyzed and the effects of economic integration and its influence have been described in this paper. The marketing mix of the company for Woolworths has been highlighted.
Introduction
The following report will focus on the various factors like the international expansion of the Australian companies. The chosen company for this organization will be Woolworths (Woolworths.com.au 2018) In this report, the most important things will be discussed for the international expansion of the company. The basic ideas for expanding the business into another country will be discussed in this section. The report will be presented by assuming the company will be expanding their business into the Asian market through China. This will be a huge boost for the company to expand into China because of the endless possibilities for capturing the Asian market. The various issues will be discussed here like the external environment of China, the foreign market entry strategy, the intervention of the Government into the economic perspectives, the marketing mix of the company and many other things. These things should be assessed and analyzed properly for gaining an idea about the ways they could diversify their products according to the needs of the Chinese people.
Challenges for the companies in doing business in another country
The companies in Australia face several difficulties in expanding into the new countries, especially in Asian ones. It is because of the cross cultural differences and the differences in the mindsets of the people. The managers eye for global extension but generally they fail in their objectives if they do not analyze the external environment of the country they will be looking to expand into (Woolworths.com.au 2018). The organization Woolworths has a very strong brand reputation and they will need to overcome the challenges in front of them. The different issues like the incapability of running the marketing campaigns in the target markets will be very important for the organization to focus on. The human resource plans are very important for the organization as well. The employees in China differ on the background of the mindset for they believe in the collectivism rather than individualism (Triandis 2018).
PEST analysis
Political
As a part of the external environment, it is very important for the organization to review the external environment of China. China is a socialist communist country run by the believers of Marxism. The firms that expand into China must abide by all the formal and informal rules of the country. All these rules shed a great impact on the country. However, the government has been able to focus on encouraging the e-commerce procedures (Turban et al. 2017). The individual properties and taxation processes are very strict in China. Woolworths might have to focus on the e-commerce strategies more. It is because the organization has to set a proper target audience. They have to make an influence over the vast population of China indeed (Johnson 2016).
Economic
It has been seen that China has been able to increase their GDP over the past few years. This is why it will be highly beneficial for Woolworths to expand into the country for monetary benefits (Gupta 2013). The socio-economic class of China is quite stable for the strategies by the communist party of China. The labor force in China is very much abundant in number. The labor cost in the country is very low so it will be important for Woolworths. The inflation rate is very high in this country and the prices of the property are also very high indeed.
Social
Two of the most important social factors are religion and racism. It has been observed that the people from the Asian countries are often diminished by the racial abuses. The religious factors will also be important for the organization (Gupta 2013) China is a communist country and they generally do not believe in God. This is why the atheism pervades in this country. There might be clashes between the race and ethnicity between the higher management and the employees. Woolworths has to resolve these issues. As per the value dimensions by Hofstede, China is considered to be a country following the collectivist nature. The population growth can be taken as a beneficial factor for China as it will be easier for Woolworths to recruit more people. The emigration factor can also be a vital issue in this matter (Ho 2014)
Technological
Woolworths have to look to innovate new products through the use of technology in a better way (Li and Xie 2012). As China is focusing on strengthening the e-commerce strategy, this will be very important for the organization as well (Gupta 2013) Asian countries like China and Japan have developed a lot in the technological aspects. This is why Woolworths will implement the new technologies for the product development in China. They can also use the social media platforms for the marketing of their new products (Ho 2014).
Government intervention in the economy in retail industry
Woolworths operates in the retail industry. This is why the intervention of the Chinese government should be analyzed properly in the retail industry. The government plays a very major role in redirecting in the economy of the country. The Chinese government has been very progressive about the development of the retail industry. They will be look to support the attempt of Woolworths to expand into their market and get the profits. They might leverage the taxes on Woolworths as well. The Chinese government will like to focus on the inventory management that will help Woolworths to engage more people in their organization. The operations in the retail industry are generally led by the human force (Duncan and Martínez-García 2015). This is why the government will intervene in the economy to make it stronger. If the Government of China puts the stress more on developing the e-commerce strategy and invest in it, this will surely be helpful for Woolworths to get the proper benefits. The logistics operations can also be improved if the government is very much interested in improving the supply chain and logistics management within the country (Duncan and Martínez-García 2015).
Economic integration and its influence on retail industry
The retail sector is considered to be one of the most powerful industries with a very common ground. The global recession might be a very important factor in the economic integration for the retail sector (Armstrong et al. 2015). The ill effects of global financial crisis have also impacted on the operations in the retail industry. The sales in the global retail sector have faced major growth in the last few years. The costs have risen over the few years for production. This is why Woolworths must have to increase the price of their products in China reflecting on the socio-economic condition of the country. However, they have to keep the price of some products down for the lower earning customers. They might use the price skimming strategy to gain the hold of their target market. This will be very crucial for their competitive advantage.
Strategy related reasons for expanding to specific country
Woolworths will be focusing on several things for setting the strategies. They will look to get the competitive advantage over their competitors. The retail industry in China is already very competitive. This is why they will look to appoint some strategies by which they will be able to capture the markets. Woolworths must set a proper target market based on the preference of the consumers. The demand of the Chinese consumers is huge. This is why they must segment their target markets according to the age of the customers (Armstrong et al. 2015). They must innovate new products for the health of the children. They can also prepare some gluten free products that will be very important for the health of people of all ages (Frankenberger, Badke-Schaub, and Birkhofer 2012) They can also provide the products like Woolworths Select and Woolworths Gold milk powder, Devondale milk powder and Swisse vitamins. The market penetration strategy should be followed by Woolworths so they can get the grab on the Chinese market. They must sell the environment friendly products. They can select the social media marketing strategy to raise the awareness among the customers about the importance of their products (Camisón and Villar-López 2014).
Choice of entry strategy
The most important market entry strategy for Woolworths to entry to China is Foreign direct investment policy (Alfaro and Johnson 2012). They must be able to explore the possibilities of the new markets. They should also be able increase the rate of profits. It is a fact that Woolworths has to focus more on the international operations. This is why they will need to apply the High Control strategy for the operations in India. The strong rivals of Woolworths in the retail sector are Walmart and tesco who are very strongly present in the Asian market as well. This is why they can use the foreign direct investment strategy to enter the Chinese market (Frankenberger, Badke-Schaub, and Birkhofer 2012).
Marketing mix
Product
Woolworths is a very strong brand in the world retail market. They must develop the quality of products and services in China. They can start to sell various types of items like DVDs, magazines and stationary items (Gordon 2012). This will attract the interest of the customers in a better way. They should maintain the quality of the products thoroughly as well.
Price
Woolworths is interested in maintain higher prices than the ordinary rates in the market. They offer several brands in the food chain and set the prices according to the quality of their products only. They are very flexible in setting their prices because they serve the customers ranging from high income people to the low income people as well. They can also offer the Chinese customers with several reward coupons by which they can earn more points (Armstrong et al. 2015).
Promotion
Woolworths should use several innovative strategies in order to promote the products properly. They can offere many Loyalty Schemes for their Chinese consumers. They can use the social online media as well. The extensive promotion through the social media will help Woolworths to reach the Chinese consumers as well (Gordon 2012)
Place
Woolworths might set up their stores all over the most populous cities in china. They can open more than one retail stores in Beijing. They can opt for operating through the mobile media platforms as well (Gordon 2012). Thus both their physical and retail online stores will help Woolworths to set up their business in a better way in China.
Recommendations
Woolworths will look to try some ways by which they can enter the Chinese market properly.
Conclusion
This paper can be concluded by saying that Woolworths has been looking forward to expand to china for financial and marketing. They will look to capture the Asian market through China. They will also look to expand into India after their venture into China. The Asian market is very much profitable and they will be able to increase their profits in this way. The marketing mix is a very critical factor for their future success. They must use the foreign direct investment policy for entering into the Chinese market and gain the market share extensively.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download