International Business and Global Strategy Essay

In-Depth Market compend of two target securities industrys mainland chinaware and genus Argentina China is a great world exporter receiving large amounts of unusual invest custodyt and is a member of the World Trade Organization (WTO). Entering the market therefore will be easier than when China was not part of the WTO. According to The World item Book (2010) by 2009, China had a race of 1. 34 billion. Although its population outgrowth is not very full(prenominal) at 0. 49, the population is the highest in the world and provides for ample market for Body Shop International Plc (BSI plc. ). China has an income dissemination of 51. 10.This indicates that the distribution of purchasing power is standardized. BSI plc does not have to specialize in its clientele and stomach anticipate a wide market for its products. Chinas miserly age stands at 35. 2. In the age demographics, Chinas largest age bracket is the 15-64 yeas age category. This makes up for 71. 9% of the population a s in 2008 where men were estimated at 491,513,378 and women at 465,020,030 (The World Fact Book. 2010). For BSI plc this creates a large market since hit products are normally consumed by this age group. In terms of education, China population is educated with a literacy rate of 92% (The World Fact Book. 010). The overall enrollment for elementary, secondary and higher education is at 69. 1. This is a pricy indicator that beauty products would be well received and are a part of the population that apprise appreciate its use. Chinas growth of the Gross Domestic Product (GDP) was at 8. 70 in 2009. This GDP has been on a rising trajectory and is expected to continue as China continues to draw near as an economic power. This provides for a secure market with good financial indicators that enthronement would respond favourably and quickly. The per capita megascopic income at 6600. 0 is in addition high making it easier for BSI plc to invest widely.The disposable income at 2. 60 r epresents a Chinas purchasing power. BSI plc would be able to promote its products and the conditions are favorable for business firm spending. The continued rise in GDP growth will add-on the spending habits of the population as the disposable income becomes more elastic. Inflation would negatively affect BSI plc and that is why the low inflation rate in China provides for market security against rising of prices. In china the population has continued to increase its cosmetics buying. At 46. 80 the population indicates a sizable spending on cosmetics.This creates a potential for BSI plc to garner a market share. China presents some difficulties in terms of ease of conducting business and economic freedom. However, foreign investment is still welcome and the government has haveed the doors for foreign investment. Argentina is one of the countries in South the States that have been experiencing economic growth. It therefore presents itself as a great target market. Its population o f in 2009 was 40. 1 Million. The population growth is not very high at 1. 17 but the country has a viable market population. Argentina has an income distribution of 51. 90.This indicates that the distribution of purchasing power is high and standardized. BSI plc therefore can anticipate a wide market for its products without having to cater for a specialize clientele. Argentinas mean age stands at 30. In the age demographics, Argentinas largest age bracket is the 15-64 twelvemonths at 63. 5% with the men standing at 12,961,725 while the women stand at 13,029,265 (The World Fact Book. 2010). For BSI plc this creates a large market since beauty products are usually consumed by this age group. According to The World Fact Book (2010) Argentina population is educated with a literacy rate of 97. %. This is a good indicator that beauty products would be well received and are a part of the population that can appreciate its use. Argentinas growth of the Gross Domestic Product (GDP) was at 0 . 20 in 2009. This GDP is low.This provides for a less secure market whereby BSI plcs investment may take longer to respond favorably and quickly. Despite the global economic crisis Argentina and most of the Latin America were not acutely affected. The per capita gross income at 10200. 0 is similarly high making it easier for BSI plc to invest widely. The disposable income at 1. 0 represents a condition purchasing power for Argentina. BSI plc would be able to promote its products as the conditions give room for moderate household spending. Inflation would which would negatively affect BSI plc stands at 4. 20. In Argentina spending on cosmetics has also increased although it is at 25. 40. This means BSI plc still has potential to make an investment in Argentinas existing market. At 127. 0 Argentina represents favorable ease with which BSI plc can do business in Argentina. It also has good economic freedom.Foreign investment is welcome. Contacts and Competitive AnalysisContacts are spellant in that they would allow BSI plc to gather information that is relevant to its venture. That is why the chamber of commerce assists foreign companies conducting business their country. It also offers its members relevant business contacts and information about Argentina. Through events and opportunities the Chamber also enables businesses to meet with government officials and distinguish players thus facilitating relations. Contact with the ministry of foreign affairs is also importingant to BSI plc. The ministry is responsible for trade agreements and policies.By having the Ministrys contacts, BSI plc can make necessary plans to attend and benefit from the ministrys consular and diplomatic activities. As the ministry seeks businesses and companies that would increase investment in their country, BSI plc would have an opportunity to market itself to the target countries. Contacts of possible suppliers, importers and buyers are helpful so that a company can establish busi ness relations within the fabrication. The choice of Alibaba corporation is model in that it is a recognizable global distributor with very strong financial and corporate growth according to Alibaba. om. (1999-2010).China Target Market potential The market potential in China is sooner high at 2530500000. This is calculated from number of potential consumers, the frequency with which the consumers buy in a year and the price of the product. This represents the potential of the cosmetic industry in China which BSI plc targets. Company Sales Potential BSI plc gross sales potential is dependent on the market share it will capture out of the potential market. If BSI plc secures a market share of 13. 5 %, it will estimate whether it can meet the demand of its target.Competitors Analysis debauched Company provides competition for BSI plc. According to Lush (19950-2010) its main product is body butter. The location of its headquarters is in China providing it with advantages of proxim ity. BSI plc is place and thus there are policies that favor it against foreign companies. This helps it keep its prices affordable. Lush has been in business for the ult 32 years giving it long experience in the industry. Lush Company caters to the local market in China and has specialized in the product demands of the local population and spare the product to effort the particular needs of the Chinese target market.Its employees number 1200 giving it good homosexual resource. Lush has also invested in e-commerce offering customers its products even where it does not have retails and wholesaler stores. They vary their prices in response to the market. In their promotion strategy Lush aims to protect its reputation and maintain its image. Their products they have elect to use to promote the quality of their product is care butter, Tuca &Tuca perfume, Tuca& Tuca massage oil, and Black stocking. Regulatory Environment for the industry In China, the regulatory environment would re gulate cosmetic products.This is because although a company would use the Automatic import licensing granting its cosmetics products freedom from import controls, the importation of materials like plastic need monitoring. FDI regulations and implications for BSI plc China is becoming the greatest receipient of FDI and as such it is poised for economic growth and increased capital that places BSI plc in a great stupefy for growth if it makes investment. The government regulates foreign investment according to WTO regulations and its economic goals where China is now quite open to and is keen to attract foreign investors.Argentina Target Market potential The market potential in Argentina is high at 41250000. This is calculated from number of potential consumers, the frequency with which the consumers buy in a year and the price of the product. This represents the potential of the cosmetic industry in Argentina. Company Sales Potential BSI plc sales potential is dependent on the marke t share it will capture out of the potential market. If BSI plc secures a market share of 3. 5 %, it will estimate whether it can meet the demand of its target.Competitors Analysis L Occitane Company provides competition for BSI plc. Its main product is mini shea butter/L Occitane body toner. According to The body Shop (2009) BSI plc deals with sweet almond oil in its moisturizers. The location of its headquarters is in Argentina providing it with advantages of proximity. BSI plc is localized and thus there are policies that favor it against foreign companies. This helps it keep its prices affordable. L Occitane has been in business for the past 34 years giving it long experience in the industry.L Occitane Company caters to the local market in Argentina and has specialized in the product demands of the local population and tailored the product to suit the particular needs of the Argentinean target market. Its employees number 2000 giving it great human resource. L Occitane has also invested in e-commerce offering customers its products even where it does not have retails and wholesaler stores. They vary their prices in response to the market. L Occitane uses advertising, personalized sale and product promotions as its promotional strategy.The products it uses include shea cocoa butter, Almont body care, verbena liquid dope honey and lemon scented and summer Travil Hair care. Its target market is 14 years and in a higher place both male and female. Regulatory Environment for the industry In Argentina, one of the key regulations would be in business conduct and tradition. Companies have to publish their Technical barriers to trade (TBT) measures. It contains duty and obligations related to the business and carrying into action of TBT investigation Points. Companies have to confirm their recognition of the Code of Good Practice.Argentina the Bureau of Customs is the governmental agency is strict in the enforcement of the tariff and Customs laws and regulation s. Importation of goods is governed by a numerous of import policy. FDI regulations and implications for BSI plc Argentina is currently not attracting much foreign investment due to its slow economic breeding and inflation rate. Although the government is using the WTO regulations and working hard to increase investment, there is difficulty for foreign companies because of high interest rates.