Globalisation increases the pressure for companies to expand in foreign markets in order to stay competitive in the market. Due to the fact that expansions represent high stakes strategic decisions with far reaching consequences for Sainsbury's, a detailed analysis of the market is essential in order to a) decide whether to invest in the market and, if appropriate, b) which market entry strategy is most convenient for a successful investment in China.
Comparing the business potentials of a range of countries leads to the conclusion to analyse the Chinese market in more detail in order to conclude whether the opportunities outweighs the risks. China, which is the second largest economy in the world, is due to its high population, a potentially lucrative market for retailers. The booming middle class, the increasing disposable income and the extremely positive GDP development are only a few factors, which indicates the potential of the Chinese market.
A PEST analysis is a common approach to analyse the general business environment and should be informative about the environmental factors, which could threaten Sainsbury’s business development. Therefore this report will examine political and economic conditions as well as cultural and social aspects for Sainsbury's in the Chinese market. It should be noted that some aspects are not directly related risks but should also be considered in order to successfully operate in China.
Table of Contents
- Introduction
- Political
- General political Situation
- Potential political threats for Sainsbury's
- Instability of the country and its economy
- Distribution rights
- State interventions
- Enterprise income taxation
- Import Restrictions
- Labour
- Economical
- General Economic Situation
- Potential economic threats for Sainsbury's
- Economical situation
- Corruption
- Sociological
- Demographic shifts
- Cultural aspects, which could thread Sainsbury's business, contrasting China and United Kingdom
- Technology
- R&D Spend
- Number of Internet user
- Opportunities
- Economic and direct related opportunities for Sainsbury's
- Sociological and direct related opportunities for Sainsbury's
- Technological and direct related opportunities for Sainsbury's
- Changing shopping habits and upcoming trends
- Contrasting opportunities and threats - Entrance Strategy
Objectives and Key Themes
This report aims to conduct a comprehensive analysis of the Chinese market to determine whether Sainsbury's should invest in this market and, if so, what market entry strategy would be most successful. The report analyzes the political, economic, social, and technological factors relevant to Sainsbury's potential business development in China. Key themes of this report include:- Assessment of potential risks and opportunities for Sainsbury's in the Chinese market.
- Analysis of the political and economic environment in China.
- Exploration of cultural and social aspects that could impact Sainsbury's operations.
- Evaluation of technological trends and their potential impact on Sainsbury's business.
- Development of a strategic market entry plan for Sainsbury's in China.
Chapter Summaries
The report begins with an introduction outlining the rationale for analyzing the Chinese market and the importance of a thorough PEST analysis for assessing the business environment. It emphasizes the potential of the Chinese market due to its growing middle class, disposable income, and positive GDP development.
Chapter 2 focuses on the political landscape of China, highlighting the one-party state ruled by the Communist Party of China (CPC). The chapter discusses the CPC's control over the country, the strong collectivistic culture, and the role of state-owned enterprises (SOEs) in the economy. It explores potential political threats for Sainsbury's, including the stability of the country and its economy, distribution rights, state interventions, and labor regulations.
Chapter 3 examines the economic situation in China, highlighting the general economic environment and potential economic threats for Sainsbury's, including corruption and the overall economic stability.
Chapter 4 explores the sociological aspects of China, focusing on demographic shifts and cultural differences that could impact Sainsbury's business.
Chapter 5 examines the technological landscape in China, specifically analyzing R&D spending and the growth of internet users.
Chapter 6 delves into the opportunities for Sainsbury's in the Chinese market, exploring the potential of economic, sociological, and technological factors, as well as changing shopping habits and upcoming trends.
Keywords
This report focuses on key aspects of Sainsbury's potential entry into the Chinese market, encompassing the political and economic landscape, cultural and social nuances, technological advancements, and opportunities for business development. Key themes include: political stability, economic development, distribution rights, state-owned enterprises (SOEs), cultural differences, technological trends, and market entry strategy. The report examines various aspects of the Chinese business environment to provide a comprehensive understanding of the risks and opportunities for Sainsbury's expansion in this burgeoning market.- Quote paper
- Anonym (Author), 2015, Sainsbury’s in China. Risks, Opportunities and Strategy, Munich, GRIN Verlag, https://www.grin.com/document/364468
