Contemporary Hong Kong Government Politics And Market Analysis For Organic Vegetables

Objectives of the research proposal

Discuss About The Contemporary Hong Kong Government Politics.

With the upsurge of diseases related to junk foods and unhealthily living, more people have started to consider a more nutritious alternative in order to escape the grasp of some of these lifestyle diseases (Zhang & Hu, 2012). This has been one of the reasons why the organic vegetables market is getting more and more popular amongst Australians, Europeans and North Americans.

Several papers have clearly described the negative effects of junk foods to an individual’s health (Datar & Nicosia, 2012).  Hong Kong is a market with a substantial number of its locals still engaging in fast foods dieting. However, the recent campaigns on healthy eating have opened the eyes of a majority of the country’s population, which has in turn increased their uptake of nutritious foods. In so doing, there is a potential market for organic vegetables in Hong Kong, which this market research proposal will try to elaborate.

Market research proposal, is a useful tool or document aimed at analyzing a specific market by looking at the various dynamics, thereby, allowing a business to be established with the least amount of risks possible (Grüner, 2016).

The main objective of this market research proposal is; to identify whether it is viable to move into organic vegetable market in Hong Kong.

The market research will try to do an in depth analysis into the current organic vegetable market currently existing in Hong Kong. The research will also try to analyze the current business environment in Hong Kong, to ascertain whether it is conducive for doing business. Various environmental analysis will be undertaken to confirm this point.

There are two types of environmental analysis that can be done to ascertain the viability of a market; PESTEL and SWOT analysis (McGee, 2014). The PESTEL analysis will be discussed in this section, while the internal (SWOT) analysis will be discussed later in the proposal

Political Environment

Hong Kong is known as an administrative region under China. It has remained politically stable over the years, with very little political squabbles affecting its business climate. It has been seen that, the political stability of the country has been fairly high, with the country being commended for having very few incidents of corruption.  If the political arena is to remain the way it is, then the market can be considered viable, with very little if any political interruptions (Syvrais-Gallant, 2017).

Business environment in Hong Kong

Economic Environment

Hong Kong is hailed as the third largest financial market globally, with a very strong trading power. Some have even termed the country as the world’s freest economy (Chan, 2010). Having survived the latest global financial slowdown, despite its high exposure, Hong Kong can therefore be termed as an economically stable country, with a capacity to withstand financial tremors. This is a market worth investing in, as the business will not be harshly exposed to financial downtimes.

Social Environment

Hong Kong is a multicultural society with a high influx of foreigners. Most of the residents are bilingual, speaking both Cantonese and English. The residents of Hong Kong have been very welcoming to foreigners, and have been quite adaptive to the western culture (Kennett, Chan & Ngan, 2016). From their current existing culture, it can be positively noted that, the introduction of organic vegetables in their market will have no negative impact on their culture. The society is in fact willing to embrace it as part of an initiative to improve their eating habits, from a junk oriented eating, to a healthier diet.

Technical Environment

Hong Kong is a country known for its innovation and productivity. It is a country that embraces research and development as seen by its formation of a productivity council, aimed at improving its productivity in all spheres. This is a very positive aspect for our market, since it partially guarantees the supply of quality raw products, essential for the survival of the organization. The population in Hong Kong is also well educated, which is a good attribute in so far as accessing human resource is concerned.

Legal environment

The legal policy framework in Hong Kong is known globally to be pro-investment. With quite a simple tax system, and its transparency, the existing legal framework is meant to allow the ease of doing business, more so to new market entrants. The system is not only favorable to the locals, but also to multinational organization.

From the external environment analysis, it can be deduced that Hong Kong as a market is viable, and quite appealing to the organization. Hong Kong has branded itself as a trade hub, and the number of multinational organizations investing in the country, can be a seen as a good indicator to assess the market responsiveness. (Qiu, Wang, Richard & Wang, 2017)

Hong Kong has an estimated population of more than 7 million people according to latest estimates by the United Nations. People in Hong Kong have started abolishing the junk food culture, and have started embracing a more healthy diet. The market is also bound to deviate from more meat products, especially red meat. This is mainly due to sensitization of the harmful health repercussions caused by over consumption of red meat. This is more evident when reports have indicated that globally, the consumption of organic foods have increased by over 200% over the past decade (Winson, 2010). This is a good setup for a possible market hike for consumption of organic vegetables.

Market Overview and Research

So far, there are a number of companies already in the fresh vegetable market in Hong Kong. Some of them include; eat fresh, Catch Grocery, Ceres Produce just to mention a few. The early market positioning of the competitors might prove to be a challenge to the organization establishment in Hong Kong.

Demand and supply are the key elements that dictate the performance of a specific market in so far as pricing is concerned (Singh, 2013). In a perfect market, the demand and supply curve are supposed to be in equilibrium. This is where the supply of goods is equal to the market demand (Melvin & Boyes, 2013).  With the existing population, there is still a big market to be explored. The current players in the market are not able to meet the demand of the market. The possible implication of this is that, the market prices are still relatively high.  In the case of our organization, we are projecting to have a supply of products from the available local farmers who are known to produce quality products. In the instance of a supply shortage, we can supplement from the neighboring Chinas’ mainland or even Thailand. We also have the alternative of getting supplies from our international partners, albeit the costs being a little bit higher due to transportation costs.

According to (Jobber & Ellis-Chadwick, 2016), market segmentation is the classification of the market/customers into different groups with regards to their shared characteristics. Market segmentation can be subdivided into four segments. It can be done by using demographic, psychological, geographical and behavioral, each as a distinct characteristic (Kotler & Keller, 2012). From the observation made, the market can be segmented in all these clusters; however the most effective form of segmentation would be geographic and demographic. The reason for this assumption is due to the nature of the product we are dealing with, and how effective it will be to penetrate the market by using the two named modes of segmentation.

By adopting different pricing strategies for the different market segments, the organization is bound to build a strong brand that resonates with the customers, and at the same time making substantial profits (Sonderegger, 2011).

The market provides a wide range of target customers. Since the organization comes under the auspice of healthy living, then organization should try to penetrate each possible market niche by promoting the strong organizational brand, and riding the healthy eating wave. High end market, which is health conscious, should be given key consideration due to their willingness to buy. The prices in this market should also be competitive, not too high to portray an image of taking advantage. The low end market should also be give equal consideration. Most of the already existing players have concentrated on the high-end market, neglecting those customers with low incomes. This is a market that can be tapped and utilized to gain competitive advantage.

Market demand and supply

SWOT analysis is an important tool which enables the organization to assess its internal capabilities to tackle a particular market (Phadermrod, Crowder & Wills, 2016). SWOT analysis provides a structure of analyzing the strengths, weaknesses, opportunities and threats that the company has. A proper marketing strategy will normally rely on SWOT analysis as a reference of key information (Tripathi & Reddy, 2012).

The company has a strong international image, and is known in various countries as being one of the best organic vegetables retailers. The quality of the products offered by the organization has received recognition from different independent bodies, more so with the organization being ISO certified.  This will be a strong selling point when the organization decides to make an entrance into the Hong Kong market.

Another significant position of strength the company may enjoy over its competitors is that, the company already has an established supplier chain. In the instance that the local market cannot meet the organizations supply demand, then we can resort to our international suppliers being able to supply the market.

The company also has a stronger financial position as compared to the local competitors. Most of the available market players have not been in the business for long thereby, having a weaker financial portfolio as compared to our organization.

The fact that the organization has been in the business for a longer duration than the local companies may prove to be a plus for the organization. The organization will have more technical know how on running the enterprise as compared to the existing competitors.

Despite the numerous position of strength enjoyed by the company, it is important to note that there are several areas of perceived weakness which should be considered before venturing into the market.

One of the weaknesses that the organization has is that, they are going to enter the market slightly later than the already existing players. This might leave the organization on a weaker footing in so far as consolidating a substantial market base is concerned. 

The organization is also disadvantaged by the fact that, they have no local supplier yet, to distribute them with the necessary products, and in the quality they want. The existing market players have already established their supplier base locally, which is actually a cheaper alternative, as compared to having international suppliers.

Judging by the market trends in Hong Kong, there are various opportunities the company has when venturing into the organic and vegetable market;

Market segmentation

The market is still not saturated with players, and is yet to realize its full potential. Through the adoption of innovative strategies, the organization has an opportunity to gain an upper hand in as far as competitive advantage is concerned. 

The organization also has an opportunity to capitalize on the fact that, it already has its international suppliers, who will allow them to have a constant supply of produce all year round, even when the local production of organic vegetables is low. When the competitors will be facing a shortage, the organization will be having a consistent flow of supply. 

The stable business environment, and embrace of the locals to western culture, also provides an opportunity for the organization to venture into the market with very minimal resistance.

The biggest threat for the organization is the existing market players, who have already taken root in the market. Another threat may arise from inconsistency from the local market to provide quality organic vegetables when needed. Overreliance of the local suppliers might end up proving to be a threat in case they fail to deliver as expected by the organization

From the SWOT analysis, we can judge the company as being in a fairly advantageous position to venture into the Hong Kong market. 

This research was a market research proposal, aimed at, establishing the viability of Hong Kong, as a potential organic vegetable market. During the research process, the following were the research methodology employed;

The research deign employed was descriptive research. Descriptive research design, is aimed at providing a clear picture of the phenomenon under study (McBurney & White, 2013). Descriptive research was chosen since the purpose of the market research, was aimed at describing the characteristics, and the viability of Hong Kong, as a potential market for organic vegetables. Under descriptive research, the researcher opted to go for survey as the preferred choice.

The sampling technique used in this research was cluster sampling. As (Saunders, Lewis & Thornhill, 2015) puts it, cluster sampling is where a researcher divides the population into various clusters, and selecting only a few of the clusters to be represented in the study. Due to the nature of the market research, this type of sampling technique was thought to be more appropriate.

There were various methods of data collection that were employed. The first one being observation while the other one being a semi structured interview. Despite the fact that both processes are time consuming, they were cost effective and able to present, and describe the situation as it is in the field (Patton, 2015). 

Data analysis as described by (Kothari, 2011) is the process of sorting, interpreting, and shaping data in a manner that can be easily understood. The researcher opted to use qualitative method of data analysis due to the nature of the data he had collected, which was majorly non numerical in nature.

Conclusion

From the market research done, it has been established that Hong Kong can be a market worth exploring. From an analytical perspective, the external environments that affect an organization are favorable in Hong Kong, and indicative of a suitable business environment. From the SWOT analysis, the organization has also been seen to be in an advantageous position should they decide to venture into the Hong Kong organic vegetable market. 

References

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