Market Selection Criteria
This report will include the business expansion strategies for Amcor Limited in the international market with the objective to attain sustainable growth in the international market. Amcor Limited produces various types of packaging which is quite beneficial for industries who produces different varieties and sizes of products. Packaging produced by Amcor Limited helps manufacturing organizations to store those products in safe and secure manner. For promoting their packaging in Australia and in other parts of the globe, organization has started contributing to the government indicatives, NGOs, etc. which are started with a motive to spread the awareness in the public in relevance with the recycling of waste, reduction in the use of un-disposable packaging. Today, whole world is struggling with the issue of pollution and disposal of waste products. Thus, the projects initiated by the organization in order to save the environmental conditions as well as to provide ways to recycle the packaging. This will lead the organization towards growth and success which will enhance the opportunities for the organization in order to attain expansion objectives in the global market. In terms of expansion in the global market, organizational management has selected two continents i.e. Asia and Europe. These two continents have huge opportunities in terms of expanding the business. Organization has selected United Kingdom from European continent and China from the Asian continent for expanding their business in the international market. Further the report will include the selection of the most appropriate market amongst these two countries with the objective to acquire the effective position in the international market.
For expanding the Amcor Limited’s business in the international market, United Kingdom and China has been selected from European and Asian continent respectively. Both these countries are included in the production and manufacturing activities, thus, expansion chances for Amcor Limited are quite high in these countries in relevance with other parts of the globe. Both of these countries are having huge manufacturing industries which require adequate packaging to keep their products safe and secure. With the help of flexible and rigid types of packaging, products manufacturing companies could pack their products in the effective manner. Apart from this, Amcor limited also provides various types of attractive and unique designs of packaging which could be used for attracting the target audience which could help the organizations to enhance their customer base (Akaka, Vargo & Lusch, 2013).
These markets were selected on the basis of various marketing objectives such as environmental factors of the market, political factors, economic conditions, etc. Chinese market is known for providing cheapest labour resources with adequate talent and knowledge. Various multinationals across the globe have set up their manufacturing units in the Chinese market in order to reduce their cost of the production. Apart from the Chinese markets, UK markets have also been considered with the objective to enhance their customer base in the international market (Andersson & Xiao, 2016).
PESTLE Analysis of Chinese and UK Markets
These are the major influencing external factors which impacts the decision making process of organization in terms of setting up a business venture, introducing a new product or to expand the business in the particular market. As per this scenario, management of the Amcor Limited has selected China and UK as their preferred markets in terms of expanding their business (Ang, Benischke & Doh, 2015). Following are certain macro environmental and geo-political factors of China and UK:
PESTLE analysis of Chinese market
P: Political system has enough potential to enhance their economic conditions. Various formal and informal rules have been made by their government which helps the economic conditions to get stronger. It attracts the investors towards the economy and in the same manner; Amcor is getting attracted towards the Chinese market for their expansion (Angeloska-Dichovska & Mirchevska, 2017).
E: Continuous growth in the GDP of China has been the major reason for enhancing the pace of the development. With the enhanced economic development, country is moving towards the potential growth.
S: With the huge population, China has utilised their men force in an effective manner which has made the China the most emerging country across the globe.
T: With the improvised and unique technological development in the China, they have made their effective position in the global market as the most innovative and advanced country (Armstrong, et. al., 2015).
L: Chinese laws and regulations are effective enough to control unethical activities. Now they have decided to develop rules in relation with the e-commerce activities as these activities are increasing continuously and in order to control the unethical activities from e-commerce industry, government has started working on formulation of legal frameworks.
E: Population of China is much aware regarding the saving the environmental conditions. Thus, government has developed certain rules and regulations in relevance with protecting the environmental conditions (Atzori, Iera & Morabito, 2014).
PESTLE analysis of UK
P: Political factors of UK are quite impressive as these factors prove the whole country as a fair and stable country under which all individuals, organizations get equal rights and opportunities.
E: Great economic condition in relevance with other countries across the globe. It stands on the fifth position in the world and second in Europe after Germany.
S: In UK, various public relation services are free such as health services with approximately 65 million inhabitants. Purchasing power of the individuals is quite high in relevance with the other country’s individuals.
Trade Policies of China and UK
T: UK has quite great innovative and advanced skills in relation with the technology and science. This makes the country capable enough to attain its desired goals and the objectives (Bond & Saggi, 2014).
L: Legal frameworks of UK are quite strong enough which are effective for controlling crime rates. This influences the foreign direct investment as well as it is also beneficial in terms of being the safest country across the globe.
E: Environmental conditions at UK are neutral as it is not much populated, thus, pollution factors and other relevant factors which generate pollution are certainly less in comparison with other countries (Burton & Cross, 2015).
Trade Policy of China
China has acquired the effective position in the global market but still the China is failing to lead and this is the reason, China has not acquired the effective position in the International Trade Politics. Business and trade policy of China majorly focus on the innovation, business expansion and preventing environment (Johanson & Mattsson, 2015). This enhances the opportunities for the foreign companies to expand their business in the Chinese market because they provide various services at cheaper rates in comparison with other parts of the globe. China has made their policies in relation with attracting foreign investments and government authorities have utilised its available resources with the view to make their country capable enough to compete with the developed countries. With its effective trading policies, China surpassed United States in 2013 and becomes the largest nation in the world which plays crucial role in International Trade. China’s trading policies have rules under which certain countries could trade freely in Chinese market. Those countries are South Korea, Switzerland, and Pakistan (Cavusgil, et. al., 2014).
Trade policy of UK
Trade policy of UK includes various restrictions and regulations in relevance with foreign investments, quality standards, etc. Policies of exports and the imports have also been modified in relation with enhancing the country’s position in the global market. In 2016, United Kingdom Trade Policy Observatory develops the policies in relation with the varieties of stakeholders for maintaining the UK’s trading environment beneficial for the whole Britain (Choi & Yeniyurt, 2015).
In relation with trading policies, Chinese market has less regulations and legal frameworks in relation with the UK’s trading policies. Amcor Limited will be easily entered into the Chinese market and the cost of the production will also be less in China in comparison with the UK’s markets. With the less cost of production, organization will be able to provide its products and the services in the international market at affordable prices. Amcor Limited is the leader in terms of producing varieties of packaging. Thus, it has been recommended to the Amcor Limited that Chinese market will be more suitable in relation with the UK market (Czinkota & Ronkainen, 2013).
Selection of Appropriate Market for Amcor Limited
In expansion of the business, lot of risk factors are involved which needs to beard by the organizational management in an effective manner with the objective to attain the desired goals and the objectives. As for the expansion of Amcor Limited in the international market, Chinese market has been chosen with the view to attain the sufficient growth which is expected by the management of the organization. With the emerging economy and the huge opportunities available with regards to the expansion of the business, Chinese market has been finalised by the management of the Amcor Limited (D. Banker, Mashruwala & Mashruwala, 2014). Following are certain risk factors in China as well as in UK market:
- Legal and Tax System: Chinese government has imposed a number of rules and regulations in relevance with the corporate income and the transfer pricing. Thus, it could increase the cost of the production for the Amcor Limited as well as duties for imports and the exports are quite heavy in China which ultimately enhances the prices of the organizational products and the services. The same has been followed in UK as tax system and the policies in relevance with the imports and exports are majorly concentrated over collecting the import and the export fees (Demangeot, Broderick & Craig, 2015).
- Threat of New entry: On the one hand, local competition and the chances of new competitors are huge in Chinese market whereas on the other hand, it is quite less in UK. Local competitors will easily the same products and the services at les prices in relevance with the foreign companies, thus, it can generate negative outcomes for the organization (Eteokleous, Leonidou & Katsikeas, 2016).
To avoid these types of risks and to reduce the impact of these risk factors, organization needs to adopt certain measures in order to mitigate the risk and its factors. These factors are avoidance of risk, acceptance of risk and the transfer of risk. Avoidance of risk is the procedure under which risk is ignored till it does not affects the business performance. While, acceptance of risk is the step under which risk needs to be accepted for avoiding its impact over the performance of the business. The last step I transfer of risk under which risk is transferred to the third party for paying the damage occurred due to risk (Fletcher & Crawford, 2013).
Conclusion
From the aforesaid information, it can be concluded that China will be the most suitable market for Amcor Limited for the expansion in the international market. This is because Chinese market has huge manufacturing industries which will require packaging. Amcor Limited will easily approach to its target audience in order to enhance their market share for increasing the revenues and the profits for attaining the growth objectives. In terms of evaluating the adequate market place, various comparative techniques were executed under this report.
References
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