ass 2 wine

Assignment 2

Southern Peninsula Wines

Assessment 2

Introduction

Deciding which is the right country for entering the market is very important. Making a business in a new market is a risky investment and therefore needs a lot of planning. The country should be the best opportunity for the business. There are many factors that will affect the potential of a business in certain markets and therefore each factor needs to be analysed.

I have chosen China for my country that I will be entering first. I have many reasons for this decision and this report will explain my reasons for choosing China.

Risk Factors

Part a

Political Risk Factors

Good political environment

Safe and secure environment to starting investing in

The tax in China is stable but generally increasing slowly.

China uses an effective trade policy that is effective and efficient. Chinese markets are becoming more and more important and the Chinese political market is becoming stronger in the world.

Social welfare is comparatively poor but Chinese Government is trying to increase the investment and improve the situation.

Economic risk Factors

China is now the biggest exporting country in the entire world.

China is increasing the fixed asset of investment

The money supply in China is increasing from the central bank to support the recent economic activities.

The inflation rate of China is quite high

High GDP. The GDP of china is not the second highest in the world.

Market Risks Factors

Many investors and business men taking advantage of the developing market

The number of corrupt business is increasing in the Chinese market because of the increased number of competitors

Businesses feel threatened and find corrupt ways of protecting their companies.

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protecting their companies.

Part B

Requirements

All the documents that include the shipping details, bill for landing and invoices are all needed when applying for approval for importing.

Duties such as play taxes for importing and other duties are assumed to be completed .

Automatic Import Licensing – this is common for Wine products and is a lot faster and less strict compared to other licenses required for importing. Automatic Import licensing will only take a few days to be approved and is required for small common products in the market.

Import Licensing Administration – there are certain import licenses that need to be obtained from the Chinese government before a business can start importing products such as wine into the country. There are certain guidelines and standards that products must follow to be accepted as an import product to Chinese markets.

All wine standards for importing should be available everywhere from the internet, to the wine imports guideline. Product standards are easily accessible for checking the potential of the product being accepted.

The only trade barriers that could affect the business is the communication. This is hard to get passed for International Markets. Making your labels in different languages and maybe joint venturing with a Chinese business can help by will not solve this language barrier.

Part C

The economy of China is generally just increase and the cycle is not affecting the business so much. The market is stable and the financial factors are stable. There are no risks that are involved with China’s business cycles. China has a lot of potential to be a good market if the products are genuine and have high reputation in other countries.

Marketing Opportunities

Part A

Market trends

China has become one of the top Wine markets in the world. It has taken place at 5th in the world for its large wine market. This includes domestic and import Wines. The number of bottles sold in China during the year of 2011 was estimated to be about 1.6 billion. This was however quite small compared to United States and France which had the number of sales of wine to be over 4 billion.

The Wine industry in China is still increasing as the past few years has been measured to be over 20% in growth rates. The Wine market in China has also been estimated to grow a further 50% over the next few years.

Market Needs

The market needs of Southern Peninsula Wine are to be of high quality and have the strong taste. Chinese wines have been known to be very strong. This means that the wines must be suit the taste and preferences of the new international market.

Market Segmentation

The geographic market segmentation of the target market would be the richer and more populated cities in China. These people can afford to pay for wines more regularly.

The Demographic market segmentation of the target market would be people aged 20-70. Younger adults prefer beers and spirits over the strong taste of wine.

Behavioral market segmentation of the target market would be the people who hold…

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