Five Years Strategic Plan Essay

Executive summaryYou are employed by a Swiss underling of a transnational comp whatever in the sufficeed fare pipeline whose products are sold via retailers and direct to the sustenance service industry in a number of countries. Recently in Swiss subsidiary has been allocated responsibility for the Asia-Pacific Region and you ease up been assigned the business of spearheading the theaters push into china and beside countries. In the short of opportunities and constraints to be awaited on the Chinese provenderstuff, the evaluation of alternative intro options showed that our best opportunity was on health food products related to the dairy products actual tummyive trend.We also unyielding to adress Chinese cultural aesthesia issues by entering in want term close family with guests instead of existence too foc utilizationd on quick deals and to alter our net employing outline to chosen penetration strategy.We also examined how we should select a strategical alalal partner, should the Chinese government advise us to do so, and how we should be adapting our ball-shaped merchandising processes to the issues raised by national sovereignty in mainland chinaware.Finally, we decided to include as neighboring(a) foodstuff both Thailand or Vietnam in coiffure to benefit from the existing portion out kindred surrounded by them and mainland mainland china, level off if counter disdain obligations are to be met.INTRODUCTION The overall purpose of this paper is to present our quint years strategic plan which impersonal is to enable our firm to locomote a major player in the processed food mart adressed to retailers and food service industry.Among our genuinely wide orbital cavity of products, we impart examine alternative grocery entry options in the light of capability opportunity and constraints, then examine the question of the influence of cultural sensitiveness on negociations and on introduction of our product to Chineses grocery store. The next step of our outline forget be to examine the impact of adhesion of chinaware to WTO on market environment and the consequences of cultural sensitivity to earnings and births.Our next orbit of investigation will be to examine the threat represented by a potential obligation to enter a strategic adhesiveness with a local player and by our planetary company hus criminalisedry regarding national sovereignty issues. And we will ultimately include perspective of developping an neighboring market with eventually compulsory counter plenty involved. scratch 1Alternative chinese market entry option for breakfast cereals and cereal bars in the light of potential opportunities and constraints.The recent grand success of dairy products in mainland China, although a majority of the universe is lactose intolerant and milk was neer part of the traditional chinese food is showing that chinese market has become increasingly open to takeing impertinent fooding habits. This is even reinforced by the success encoutered by Mc Donalds and Starbucks. But one very interesting element of dairy products success is that its main reason and merchandising idea is to value its good impact on health. This is what gear ups us say that the best way to preface our firms product appreciation is to be highly positionned on health benefits to be awaited from eat our products, their total safety by high level controls.In damage of politics, China is a stable country, which has invested large efforts into modernisation of its institutions and legitimate modelling in modulate to enter the World Trade Organisation (WTO) in 2001. Contract enforcement and business matters involving foreigners are to be brought before high courts specifically trained. Intellectual property protection is mum a broad chore done counterfaiting and shuffles like Starbucks are now facing parasite competitors who grass similar products to much lower impairments.Chinese market is a huge opportunity still the country still lacks infrastructure and geographic entry has to be limited to main big cities, with a view of extending to the ever so increasing number of middle sized cities growing all about the country. The idea of staying in urban areas is linked to two factors our products are distri justed by retailers networks, and food service industry which can only be ground in big cities in China at the moment.As we work with retailers and food service industry, indirect market entry strategy done intermediator could prove worthy, at least at the beginning, as farsighted as our products are non known. We could benefit from the intermediarys network and his expertise on selling foreign products to chinese market.However, using and intermediary is non the prefered solution as it would increase our costs, and as chinese market is very price sensitive callable to anthropoids, livinging good price/value ratio is a key strategic point.With di rect market entry methods, we would dupe much control on market reactions and be able to lower our export costs.Alternative solutions to enter market range from specialised trade fairs (on dairy products, health products, breakfast and snacking products, etc) to a campain of struggle gifts to be organised with either yoghurt or milk distributors, or by self-aggrandising free samples in school, university and working areas cafeterias. We could also afford organisations with already installed foreign companies who would be interested in distributing our products on their shelves.Considering our objective of neat a major player on processed food within the next 5 years, it would in all probability be worth it to elucidate a large upfront investment to develop internal expertise in chinese market, in order to maintain our own relationships in the target market, which could be later commitd in order to introduce early(a) product range on the homogeneous market.Therefore, and in the condition of a eagle-eyed term investment, prefered market entry would be on health safe products targeting families and young working singles.SWOT AnalysisOpportunities frugal climate a double digit economic victimisation gilt to high quality trendy foreign food processed products with an draw poker to health promising food.Demographic changes turning a rural population into city office working people whose life standards sport change magnitude dramatically over the last few years.Market opening through Chinas entering WTO system and making legal and administrative environment more import friendlyThreats Competitive activity new(prenominal) global firms are already on the market and Mc Donalds, Vuitton and Starbucks buzz off of the market show that any brand valuation generates its army of copycat making it difficult to keep up with very low prices in a very price sensitive market.Culture Reluctance to gather in new foreign fooding habits in a very traditional ho rti finishPricing chinese market is very sensitive to price and knob segment will digest to be chosen carefully and matched to set range.StrengthHealth food bod connected to dairy products impact food in a booming ever increasing market harvest-time adaptability Cereals can be flavoured harmonize to Chinese market tastesNetworking confederacys excellent ethic reputationLarge target Product attractive to kids and adult alikeWeaknesses no enough differentiation in productsNeed high advertising budget to gain trendy attracting imageSection 2How culture baron impact on (i) negotiating in china and (ii) introducing your firms product into china.The usual tip when you invent a business trip to China is to carry business cards, sustain an interpreter, wear a conservative suit. These advice are easy to follow and have proven usefull, but they are too superficial to get you into the course of association with chinese you need to be able to negociate agreements and introducing on a lo ng term perspective the firms products in China.Graham and Lam (2003) have described the root of chinese culture which have bound chinese people for 5,000 years and show through chinese business negociation agrarism which superseedes business(survival depends on group cooperation and harmony, loyalty and obdience to familly hierarchy), confucianist morality (relations of pattern and reignd among husband and wife, parents and children, older and younger, and of equal amongst friends), world more concerned by means than by end in negociations, the fact that chinese tend to see easily the big picture, and finally that chinese people are very cynical about rule of justice and rules in general, only confidenceing their families and their bank account.The elements that are grave in chinese negociation are have personal connections (friends, relatives and close associates), use an intermediary in order to avoid suspicion and distrust, be stiff in order to show social status, pay a ttention to interpersonal harmony (smile, be nice and friendly), see the big picture and recant the detail to a later stage, be patient in order to get concessions on prices, never embarrass or provoque a lost of composure to a chinese (equivalent to loosing face), value endurant work more than talent.As a result of the above, introducing our products into China will probably require either a very long time necessary to build a trusted network, or the use of an intermediary. It is of world-class importance to try to pass water close contact with significant actors of the retail and food service industry. The pricing of the products will probably also be of concern, as, if too low, it might not have the value effect, but, too high, it might repell consumers more tempted by a local copycat. Impact of recent access of China to the WTO on former(a) environmental variables which can be encountered when doing business in China and how it might benefit to our ability to establish w orthwhile business in China.When China joined WTO in 2001, it made a transition from a centrally planned scrimping to a market driven economy. The institutional role model for foreign trade was inexistent, the schooling transparency culture still to be invented, existing judicial and administrative system inadapted. A tremendous step of work was requested before China could integrate WTO system. China concur with its major commerce partners to open chinese market within 3 to 4 years to foreign companies in various sectors, including telecommunications, distribution and wholesaling, fiscal services, and banking and insurance. The change in laws included codifying existing administrative practices into written laws and edicts, then increasing transparency and predictability, covering around 200. Foreign trade law had to be modifyed. Regulations on international trade of goods and rules of origins were created.Regulations on transnational mergers and acquisitions and franchising were developped according to their new objectives. Anti-dumping, subsidy, countervailing and safeguard measures were prepared, and altogether, the capacity of the Government to provide legal information to the public was strengthened. Under the Chinas central planning system, foreign trade was administered with both tariff and nontariff controls, including quantitative controls which WTO rules require to eliminate.To ensure that the WTOs nondiscrimination principle is met in the judicial process, China issued an order that took effect on 1 March 2002 to elevate the jurisdiction over commercial-grade cases involving foreigners from the principal(a) courts to the higher level of courts, the question of training the judges to the appropriate regulation still being an issue at the moment. (Mitchell2004). Altogether, when entering WTO system China had the tools to a market economy.These modifications created a foreign investment friendly framework, but the cultural reluctance to rules and the natural reliance to human bonds are still to be watched when doing business in China (Usunier & Lee2005). It had a great impact on having major competitors entering the chinese market with success and provides market with the stability and rules needed to establish worthwhile invesment.Section 3Significance of the focus in China on relationship and network on our chosen entry strategy.As, in China, all business is subject to relationship and network, and as we have chosen to invest into a direct market entry strategy, we will have to rely on building our network with key players.Relationship selling involves creating, maintaining and enhancing strong relationships with customers and otherwise(a) stakeholders. This type of marketing is moving away from focusing on person transactions and moving towards to focusing on on building value-laden relationships and marketing networks. This type of marketing is long term oriented, very demanding as it is aimed at delivering long term value and satisfaction to customer (Kotler &al2005)It also involves building relationships at different levels economics, social, technical and legal resulting in high consumer loyalty.Kotler (2005476), distinguishes louver different relationships that can be formed with customers raw material (sale is made but no follow up on satisfaction) thermolabile (salesman encourages customer to come back if any question arises)Accountable (salesperson contacts customer shortly subsequently the sale to check that product meets expectations)Proactive (salesperson or company person crys customer from time to time to suggest other products)Partnership (company works with its customers to discover ways to deliver better value)Considering that we show to sell our product to a large number of customers with medium clams margin, the adapted relationship level would be accountable.Therefore, salesperson would phone retailer or food service company shortly after the sale to check if product meets expectations. Of course, laying key customers and being more proactive with them would also provoke efficiency of such relationship marketing.Company would probably take advantage to using other marketing tools as giving special treatment and reward to good customers, or inviting them to special events.elect strategy network map and discussion on focal and subsidiary relationship involved.First step is to identify key player in retail networking and food service industry, like main wholesalers to be met at trade fair, mass retailers like supermarkets, trendsetters to be identified on TV or sports like football.Next step is to initiate contact with them with a focus on long term relationship and not on result. These relationship, due to their weight on market and the advantage that can be gained from being referenced with them have to be favoured at a first stage.Then, once this network is established, and in order to continue expansion, identify other distribution ch annels than wholesalers or mass retailers and initiate subsidiary relationship with them, as smaller restaurants, or hotels.Section 4Adressing the issues related to rumor that Chinese government might request that we enter into a strategic bail bond with a Chinese owned firm selecting and managing strategic alliance partners in china.As in many asian country on that point is a rumour that we may have to enter a strategic alliance with a chinese partner in order to be allowed to market processed food in China.As Charles Revson, founder of Revlon cosmetics verbalize once I dont meet competition, I strap it and this should be remembered when entering a strategic partnership with a chinese partner. In fact, as cultural analysis hereabove showed, chinese only trust their family and their bank account, so, in order to enter a sound alliance, a few criterias moldiness be met.Criterias for selecting strategic partner in China should begood reputation of loyalty and integrity on the ma rket, but also of product quality for reputation purposesnatural feeling and general values, understanding of what our goals are and willingness to collaborateextensive network on our targeted customers, on the areas where we have the greatest growth or the most profitable areasproven synergy opportunity between our two companies instead of competitionlong term relationship seems possible through mutual cooperation (strategic alliance must be a win-win situation in order to be sustainable on the long term)Impact of the issues of national sovereignty in China on application of our standard marketing approaches in order to elevate global image and additional profits through economy of scale.China is very sensitive on the issue raised by breakaway claims by  Taiwanese nationalists, Tibet and Xinjiang separatists. Our standard marketing approaches, designed to enhance global image and enable additional profits through economy of scale, mustnt be a threat to our main objective whi ch is to become a major player in dairy products in China.Therefore, our standard marketing approaches should be amended in order to avoid any differenciation between the average product sold within China and the ones sold in these three areas. The main market should be priviledged against the particularism of the three separatists areas.No marketing rock that our product would be specifically adressed to the separatists areas should be set ahead and it should under no circumstances become a selling argument or even be mentioned, because it would probably cause us to put out main market.Section 5Criteria to select an adjacent market between Taiwan, Thailand, Myanmar, VietnamThe first criteria to take into account is capacity to use both markets to enhance presence on each other. Creating synergies in a market entry phase might be vital and the level of trade relationship already existing between China and that country is the right measurment.The imprimatur one is to use up a ma rket which might be governed by the same cultural trends in order to be able to adopt the same marketing approach to both.A third criteria, maybe more operational, is distance and accessibility (custom tariffs, roads, etc) between both territories. This might enable to foundation product in one country and ship to the other from thereof. ordinal criteria might be existing trade relations with Switzerland which might make it easier for us to start networking, as the Swiss image would already be a commercial advantage.Myanmar being subject to economic sanction from China due to compulsory labor is not a valid adjacent market, though it has entered the asian liberalisation trend and was even acknowledged by the UN Conference on Trade and phylogeny in 2001 as a member that performed well to better in the trade liberalisation process under the WTOs principles It also does not have the right development stage to be interesting and human rights issues might be minus our image. It has ver y little commercial bonds with Switzerland.Thailand had rather recent diplomatic relations with China (dating 1975) but shows since then a real will to become a partner of selection of China. Both nations have common roots and share common ancestors. The commercial agreement between the two countries (Sino Thai Free Trade Agreement) only covers fruits and vegetables at the moment but could by chance be protracted. Thailand is also member of the WTO. Its main advantage is to already have strong network trade connections with Switzerland (on machinery, watches, etc), where we are based, which could be a vital advantage for us in terms of network.Taiwan is actually administrated by China which makes it a priviledged area to invest in. It also has a long tradition of trade with China which makes it a good candidate due to the need for trade network to enhance each others, and as a little dragon, it also has the wealth to be interesting, but choosing it would probably not be the best in terms of advantage on chinese market as it does not really add anything different to being only present in China. Also it does not have any specific links with Swiss market.Vietnam has a common frontier with China and is following more or less the same path towards becoming a market economy and entered WTO in january 2007. Though it does not have the same laws, it has a similar development trend, close traditions and the close commercial links with China in all sectors that makes it a suitable adjacent market. It is also a so called little dragon, a booming economy that could be a very profitable market. The trading network between Vietnam and Switzerland is not too developped though Switzerland is present in Vietnam with a swiss embassy in Hanoi.Finally, in order to develop a global brand image in asia, it might be a good choice to choose between Thailand and Vietnam.How to turn the risk of being obliged to countertrade into a profitable tradeMore than 80 countries nowadays use or require countertrade exchanges. A concensus of experts opinions (Okaroafo, 1989) has put the percentage of the value of world trade volumes related to countertrade at between 20 to 25%.Counter trade usually occurs when countries lack sufficient hard currency.There are five main variants of countertrade which could be of different value to our firm. Entering a trade (exchange of goods or services directly for other goods or services without the use of money as means of bribe or payment) could eventually be interesting if we manage to find good quality bulk products that could be integrated in our products, like fruits or packaging.Using the switch trading practice (in which the country would exchange allowing our importations against an obligation to make a grease ones palms on the domestic market) could also be of interest to us for the same reasons.A buyback (buying machinery necessary to our production in exchange for products) agreement is not a really interesting deal for us as it involves very heavy transportation.Finally, entering an offset agreement (offsetting a hard-currency purchase of an unspecified product) would be a very dangerous operation as we would have to cover currency exchange variations.Proactive strategy to trade profitably with the selected countryIn order to be ready when the ban on import occurs, we will implement a proactive strategy by identifying products that could be of use in our production process. Then we will start making contacts with producers of these products and gain market knowledge of prices and quality available, identify suitable suppliers that meet our quality requirements and are able to supply us with the adequate quantities. Therefore, when we will be forced to countertrade, we will already have our network in place.ConclusionAs stated in this document, our five year strategic plan on entering Chinese market involvesentering market with health food linked to dairy products mass trendiness with direct market ing toolsAlways keep in mind the cultural sensitivity of China in order to use it as a competitive advantage instead of a falling trap.Utilise the huge work done by China to be able to keep up with WTO entering necessary standards in terms of transparency and legal framework to our profit in developping our businessInvest in developping extended network and long term relationship marketing in order to open the route to introducing our other products on the market laterIf needed, choose carefully strategic partnersAmend global marketing policy in order to avoid sovereignty issuesChoose between Thailand and Vietnam as adjacent market, even if countertrade is involved.Reference TableSunfaithChina Ltd,September 2006,Market Analysis report on China Yoghourt industry, http//www.mindbranch.com/listing/product/R521-158.htmlChen, C, February 2003, Got Milk?, seawall Street Journal http//www.mindfully.org/Food/2003/China-Dairy-Drinks28feb03.htmJohn L. Graham and N. Mark Lam, 13 october 2003, Negotiating in China, Havard Business School, Excerpted with permission from The Chinese Negotiation, Harvard Business Review, Vol. 81, No. 10, October 2003Mitchell, A Implementing WTO rules The Importance of Law Reform, Remarks of Arthur M. Mitchell, General Counsel Asian using Bank, February 2004, apeC Workshop on Best Practices in WTO Capacity Building, http//www.adb.org/Documents/Speeches/2004/sp2004050.aspVertariu, P., (1992), Trends and Developments in multinational Countertrade, Business America, (November 2), 2-6.Okaroafo, S., (1989) Determinants of LDC Mandated Countertrade, International Management Review, (Winter), 1624Interview Thailand aims to further enhance Thailand-China strategic partnership Peoples Daily, Beijing, 28 June 2005, http//www.bilaterals.org/article.php3?id_article=2180Swiss Federal recite Secretariat for Economic Affairs, 2005, Report on Swiss Economic Development Cooperation with VietnamKotler,P, and al (2005), Principles of Marketing, Pearson fos tering LtdUsunier, J-C and Lee, J (2005) Marketing across cultures, Pearson Education LtdBuksbaum, L (1999), Choosing strategic partner that really partner, press plow on Inc.com, (http//www.inc.com/articles/1999/11/19511.html)