Selling into China

skipper_jack
Mind Map by skipper_jack, updated more than 1 year ago
skipper_jack
Created by skipper_jack about 6 years ago
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Business Studies (BUSS 4 China ) Mind Map on Selling into China, created by skipper_jack on 04/07/2014.
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Selling into China
1 Setting up production in China
1.1 Positive/Benefits
1.1.1 Lower Labour costs
1.1.1.1 Lower costs eg land
1.1.1.1.1 ease of distribution
1.1.1.1.1.1 Local expertise
1.2 Negeteive
1.2.1 Reduction in quality
1.2.1.1 Ethical and enviromental issues
1.2.1.1.1 Exchange rate fluctuations
1.3 JLR
1.3.1 Joint venture with Cherry automobile have plans to open a production plant near Shanghai
1.3.1.1 Will hae a posotive effect on their global output
1.3.1.2 80% increase in sales
2 Mergers/Joint Ventures
2.1 Positive / Benefits
2.1.1 Combine experise
2.1.1.1 Local knowladge
2.1.1.1.1 Shared risk
2.1.1.1.1.1 Can be financed through equity (shareholders) and not debt (banks)
2.1.1.1.1.1.1 Greater capacity
2.1.1.1.1.1.1.1 Synergies
2.2 Negative
2.2.1 Shared revenue
2.2.1.1 Potential for conflict of stakeholders
2.2.1.1.1 Cultural differences
2.2.1.1.1.1 Partner may grow to be competitor
2.3 Sales of JLR models in China have risen by 80% in 2012
2.3.1 JLR agreed to a joint venture with Chery Automobile
2.3.1.1 58% increase in Chinese sales in the second quarter of 2014, boosted by demand for the recently launched Range Rover Evoque model.
2.3.1.1.1 Increase in local jobs
2.3.1.1.1.1 Gives a local production base where luxery car market is on the increase
2.4 Starbucks Coffee will launch a joint venture with a Chinese coffee-growing company
2.4.1 Working with local chinese farmers to produce high quality coffee beans
2.4.1.1 Chinese produce helps supply starbucks' global market
2.5 Mergers in China results in large tax benafits
3 Exporting into China
3.1 Negative
3.1.1 High import taxes
3.1.1.1 Ethical issues
3.1.1.1.1 Lack of market knowledge
3.2 Positive / Benefits
3.2.1 Large market
3.2.1.1 Growing market
3.2.1.1.1 Spreading risk in different markets
3.3 E-commerce is a prime way of selling into China
3.3.1 China’s e-commerce market looks set to be worth $296 billion in 2013
3.3.1.1 online luxury sales will be worth an estimated $27 billion this year
3.4 Advantages of E-commerce
3.4.1 No limitations to geographical sales
3.4.2 Reduce in costs that can be past on to consumers giving a commpetative advantage
3.4.2.1 This can be in the form of reduced personal/workers or the fact that a physical store is not needed in an e-commerce busniess
3.4.3 Consumers have more convenient shopping and can use a 'search' box to narrow down products
3.4.4 Travel time and cost is eliminated for the consumer
3.4.5 Remains open with 24 hour access
3.5 Disadvantages of E-commerce
3.5.1 Many goods can not be pruchased online
3.5.2 E-commerce doesnt allow consumers to experience the product
3.5.3 store reliability can be an issue and consumers may not want to risk using e-commerce
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