BUSN6002 Global Business

The report is based on the Kid’s Eats which is an Australian responsible foods company. The company deals in wholesome foods for infants (0 to 12 months children), toddlers (12 to 36 months) and preschoolers (36 months and five years). The company attains better domestic growth in last eight years and also increased overall revenue in last few years. But in March, 2020 company stopped its growth in Australian market due to covid-19 pandemic and company ties to look for an overseas market to maintain its future growth. This report includes description of two countries for expanding the Kid’s Easts market that is India and China. The detailed analysis of both countries will be described in this report. The summary of destination country and entry strategies in overseas market will be discussed in this report

Political system and structure

The political system of China becomes effective in current situation as people’s democracy in China is a three-pronged institutional arrangement including people as the masters of country, leadership of party and rule of law (Bayley, 2015). As one of the main political system of China is related to multipart-cooperation tat makes expansion easier in China. Some of the risks also face due to political system in China that includes dislocation of tens of millions of people as state owned companies and widening wealth gaps.

The political system of India is effective in expanding business of Kids Eats in country as system is so easier and make several opportunities for business.  As democracy environment of India improves the expansion process of company in proper manner (Wang and Kobayashi, 2021). As India as federal government so business expansion is easier in related structure of India. The India also includes some political risks that includes political instability, adverse changes in foreign investment and cultural problems.

Stability of government

The political stability is one of important aspect in expand the business of Kids eats to start the business in China. As the political stability in China is still a big question and it largely impact overall organization in different manner. As per analysis, it has been determined that sometimes instability has occurred in China political system which is not good for business expansion (LaPalombara and Weiner, 2015). But as the political stability in China is still a big question and it largely impact overall organization in different manner. As per analysis, it has been determined that sometimes instability has occurred in China political system. But the chances of instability in China is less.

India has better stability in politics so all the organization in foreign market tries to expand business in Indian market. As political stability of India improves its growth aspects in regards to expanding of Kids eats market in India. As political stability affects consumer behavior of business organization in large manner (Qian and Chen, 2021). The political stability of India is analyzed by determining different political functions occurred in country. India occurred instability due to covid-19 pandemic in the year 2021.

Future political risks

The China faces several political risks in future that affect the business of Kids eats. So, the organization need to analyse some of future political risks occurred in China that are widening wealth gaps, major industrial accidents, rapid growth and various social instability in overall country (Weiner, 2015).

The India also faces some political risks in future but these does not largely affect the business in Indian market. Some main political risks in India includes adverse changes, pricing or tax issues, cultural problems and disruption of normal business (Qian and Chen, 2021). These risks mainly affect business expansion in India market.

Bribery and corruption risk

The bribery and corruption risk are also occurred in China. As per analysis, three types of corruption are common in China that includes rent-seeking, graft and perbendalism. Among all these three bribery and corruption risks, graft is common problem in China that affect global business and create several hurdles for the business in large manner (Weiner, 2015).

India ranks 77 in global bribery risks as corruption risks are so high in Indian market of business. The bribery standard settings affect overall organizations in large manner and impact overall business growth of Kids Eats in different manner (Wang and Kobayashi, 2021). As it is too important to analyse bribery risks before expanding business in India.

Economic and business environment analysis

There are several demographic factors included in economic aspects of China that largely shows the economic environment of China (Mele and Magazzino, 2021). As per analysis of demographics, the abundant labor supply is one major driving forces thar improves the economic growth of China in rapid manner from several years.

The India population is bottom heavy as per age composition. This shows that population of people aged (0-14) is high in India. The major factor of demographic in India that affect economic aspects includes the increasing in working age population in large manner (Cai, et al., 2021). This also improves GDP growth of India. But it affects in the year 2021.

Business Environment

As per analysis, it has been determined that China’s economy is increased by 7.9 % in 2021. So, the business environment of China favorable towards expansion of global business in China (Chakraborty and Maity, 2020). So, kid’s eats can freely expand their business in China as there is no economic risks in future growth of company.

The business environment of India is not so stable in 2021 due to covid-19 pandemic. As the growth of business environment is also low due to pandemic (Chen and Lin, 2021). So, there is a risk of growth in future for Kid’s Eats organization to open business in India.

The monetary and financial environment of China goes in right direction and it works in maintain overall economy of country in proper manner. The monetary policy of China includes several actions of central bank that help in attaining several macroeconomic goals. As the system improves overall economic growth in business environment (Karabulatova, et al., 2020).

The Indian financial system is included in two categories that includes Indian Money market and Indian capital market. The monetary and financial system of India includes better flows and it also work to maintain economic stability in Indian business environment (Chen and Lin, 2021). But this system occurs several risks in 2021 due to covid-19 pandemic.

Legal System

The legal system of China is transparent and flexible in doing international business. The business cannot face any complexity in opening business in China (Chakraborty and Maity, 2020). As different laws of country maintain overall business practices and standards that help in maintaining overall business transactions.

In legal system, Indian framework is also good. As the laws made for international business in India is too easier so any business can easily expand their work in Indian business market and maintain all activities and functions in easier manner (Cai, et al., 2021). The legal system of India is also related to proper flexibility.

Market prospects

The market prospects of China in food industry are continuously grow by 4.80 % and its volume is expected to 397,714 .6 mkg by the year 2025. So, the Kid’s Eats organization can easily sustain in food industry of China as market prospects are too easier in managing overall business organization. As per analysis, it has been determined that food market of China is amount to 243.0kg in the year 2021 (Zeng, et al., 2021).

The market prospects of Indian food industry are also grow with its annual growth rate of 20 percent. But market face several challenges due to covid-19 pandemic (Mishra, et al., 2021). So, the organization face some complexities in expand business in India in the year 2021.

Current product usage habits

As China consumers have habit to use the products of food for children from 0 to five years. So, this usage helps the organization in getting several benefits while expanding business in China. The product of Kid’s eats is too effective for children (Liu, et al., 2021).

The Indian consumers have low habit of using food for small children as they live with traditional aspects. So, the organization cannot get a proper habit of consumers regarding food for children as company face some challenges in doing business with India (Mehta and Bharadwaj, 2021).

Target market and demographics

The target market and demographics is too effective in China for food company Kid’s eats. As China includes large population of children aged from 0 to five years so the target market is too effective and high in the market of China (Li, et al., 2021). As demographics of population is also better related to food product produced by organization.

The target market and demographics of India for food company is also effective. As India also includes large population of children from 0 to 5 years (Mishra, et al., 2021). So, the high target market includes in India. As India is also second most populated country after China so this factor is effective for expansion business in India.

Competition

The competition in food industry is high in China market as Chinese companies uses three strategies of competition that include learning from foreign investors, imitation of foreign investors and development of markets where foreign investors cannot enter. This process create complexities for business of Kid’s eats to open business in China (Liu, et al., 2021).

The competition of food industry in India is also high as there are several companies involved in food industry (Mehta and Bharadwaj, 2021). The market of food industry is also very large. So, the organization Kid’s easts face several problems due to competition in the market.

Destination country summary

As per analysis of risks, the China is country is more suitable in expanding business of Kid’s eats as in the year 2021, China is not so affected by pandemic and overcome all the challenges related to the pandemic (Chen and Orr, 2021). So, the destination selected for expanding the business of organization is China as it provides future growth security in the country. The risks are commonly occurred in Chinese market but it can manage easily so it does not affect the process of company in large manner.

Opportunities

In case of opportunities also, China is selected for the organization to expand their business. As Chinese market have several opportunities in the related food product. The market prospects and economic stability create several opportunities for organization which also improves the overall growth of business in future (Bai, et al., 2021). As the main opportunity in China is related to the market of China is also too large and large population of particular demographics improves growth of company in future and get several benefits. The political environment of China is also effective for business expansion of Kid’s Eats organization as company wants proper growth in future.

Comparison of process and practices

The entry strategy is important to enter the business in Chinese market as the various strategies are used in entering market of China in proper manner. There are three fundamental strategies that can be included to enter in the market of China that includes export via Hong Kong distributor, set up a joint venture and export by direct channels in the market of China. The main process used by China to enter in the market is WFOE which is most common and general preferred by entry mode that available in foreign investors (Wu and Wang, 2021). A WFOE is a limited liability company that established foreign investor’s capital in proper manner. As various process and practices are different in Chinese market used to enter the business in related market. As the different process included in Chinese market used by business to enter in the market includes targeted visibility and reputation, Chinese consumer behavior is digital, leverage local platforms, online media and dominance f mobile marketing, fast paced market and the Chinese buy brands.

These process and practices are included in entry strategy of China as China is one of effective country to expand the business in 2021 as economy of China is increasing day by day. The main marketing strategies include structure exporting, direct investment, licensing and franchising and buying a business (Wu, et al., 2021). All these processes are also effective in managing overall process in global market of China and Kid’s Eats uses these strategies to enter in the market of China.

Implications of nominated response

The nominated response gives large impact on overall development of business and growth in Chinese market as several complications occurred in business gets decreased by the nominated response. As including entry strategies in China, company need to maintain business by nominated response as it gives large impact on overall business of organization and improve overall growth of organization in near future. With the proper use of nominated response, the entry strategy used by organization becomes successful in proper manner and it maintains overall strategies in effective manner and maintains proper business of organization in Chinese market (Demir and Angwin, 2021).

As per analysis, it has been analyzed that nominated response gives large impact on the process of entry strategies used in China. As per overall analysis, it has been determined that among India and China, China is more reliable to expand business in 2021 for attaining growth in future. So, nominated response of China is also effective in maintaining organization growth in proper manner. The organization Kid’s Easts get effective response related to nominated process which improves the possibility of attaining proper growth in future. This process is too effective in overall process of global business and Kid’s Easts attain success in Chinese market by using these market entry strategies.

Conclusion

From the above discussion, different aspects of business to enter in China or India market has been analyzed. The environment of both countries can be analyzed in this report. As the political stability in China is still a big question and it largely impact overall organization in different manner. As per analysis, it has been determined that sometimes instability has occurred in China political system. The political stability of India is analyzed by determining different political functions occurred in country. India occurred instability due to covid-19 pandemic in the year 2021. So, the organization need to analyse some of future political risks occurred in China that are widening wealth gaps, major industrial accidents, rapid growth and various social instability in overall country.

As it is too important to analyse bribery risks before expanding business in India. As per analysis of demographics, the abundant labor supply is one major driving forces thar improves the economic growth of China in rapid manner from several years. It has been determined that China’s economy is increased by 7.9 % in 2021. So, the business environment of China favorable towards expansion of global business in China. The market prospects of China in food industry are continuously grow by 4.80 % and its volume is expected to 397,714 .6 mkg by the year 2025. So, the Kid’s Eats organization can easily sustain in food industry of China

References

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