Market Opportunity of China
For having rapid industrial growth, it is important for any company to establish a proper marketing strategy, which indicates the business efforts and advertising of company for new market entry. The business plan simply describes the business strategy that involves a specific range of marketing objectives or goals within a set of time. This study identifies the chances and opportunities to develop a marketing plan and for that reason the selected company Zokoko, which produce and manufactures chocolate in the Australian market. Nowadays due to increase of globalization, the chance of new market entry is very easy. Despite a bad economic climate in UK and USA, China’s economy has continued to increase by double-digit rates over the last few years. So, in China, the business opportunity is very high. China’s rapidly changing demographics, high-income rate and increasingly open new business environment help to make the market increasingly attractive. The capability and human resources of China will help the organisation in operating their business smoothly and helps to sustain its competitive benefit. Zokoko is focusing on establishing its business in China. This paper describes the market opportunity of China, SWOT analysis, competitive strategy analysis, international human resource issues and consideration which will help the company in expanding its business in the Chinese market. It will also help to understand the proper market entry strategy, which will raise the overall revenue of the business.
Zokoko is one of the famous chocolate Producer and Manufacturer Company in the Australian market. The company was established in the year 2008. Zokoko is an authentic coffee and chocolate maker, they producing chocolate from beans to bar. The company uses unique methods to create a genuine and pure cacao experience (Zokoko.com, 2019). They source the high quality cacao beans and use conventional artisan methods to make premium quality chocolate reflective of its origin. Zokoko has café in the Blue Mountains in EMU Heights. Zokoko wants to develop its market in the Asian Market. So, the researcher builds the marketing plan by understanding marketing environment and major competitors of the Zokoko. The company mainly produces dark finest bean to bar chocolate. Zokoko has a comprehensive range of artisan beans to produce various types of chocolates for the potential customer. The company has wide range of product portfolio, which includes- milk chocolate, dark chocolate, cocoa nibs, organic cocoa powder and drinking chocolates (Zokoko.com, 2019). The manufacturing technique of the company makes it completely different from its existing competitors because they are the only company who makes the chocolate from beans to bar. By offering finest and pure chocolate they increase their customer loyalty and satisfaction.
SWOT Analysis
One of the emerging markets for a company like Zokoko is indeed china as the demand for chocolate for premium quality is increasing day by day (Mo, Rozelle & Zhang, 2016). Products having a unique and rich test are highly demanded in China. Around 60% of chocolates are imported from Switzerland and USA to China (Li & Mo, 2016). The rapid use of food and seeds by the chocolate confectionaries are gaining prominence in the market of China. This will help the organisation to increase its profitability and global presence.
Conclusion of SWOT Analysis
Strength
The Zokoko Company’s strength is the accessibility of cheap labour in China, which will help the organisation to save its cost. Increase the use of mobile phones will help in the expanding of business through online portals. Economic prospectus of China will also increase as it has highest cash reserve (Chow, 2017).
Weakness
One of the weakness would be the fading of the rural sector and the hamper of the agricultural industry in China, as people will move to the urban area for Jobs. Since the use of the social media platform is restricted in China by the government. It also restricts the mortgage, landing prices and home seeking. This leads to extremely trivial wages to the workers and bounces them to leave the industry.
Opportunities
The majority of the population in China is under the age of 40, this creates an opportunity to growth in the business market of urban areas of China. Infrastructure and advancing of technologies are the proposition where China focuses more to spend. So that it can improve transport and communication and opportunities for the advancement of the business. Therefore Zokoko will be able to deliver best quality product to its customers. Online branding is yet another genre to increase the awareness about the brand and business profitability. Increase in infrastructural investment will develop the business and help in delivering quality products to the customers.
Threat
The threat of having the company settled in China will be the close restriction of the government control and increase of population. Poor air quality and population also has a negative impact on the health of people. Another threat is survival of low wage workers as they feel that they are exploited. The competitiveness of the Chinese market is disturbed by the ageing population. Since China faces the issue of inequality in income. It arises a difficulty in the prediction of the target customer.
Competitive Strategy Analysis
China is a very progressive country that has been leading with business all over the world. The Chinese company that has helped in the flourishing of the companies as well expanding their business has adopted several business strategies. Some strategies that can be adopted that can be highlighted which have helped the Chinese Company Zokoko are:
- Identification of the market,
- Choosing the location of the market and the area of their supply,
- Conducting the market research, and checking the Government policies and Regulations
The identification of the market is totally related to the number of the companies and the production rate of the company in the market thus the factor of making profit in the country are to be analyzed. This can be done while assessing the nature and identifying the production of the companies as there are many competitors on the market that will be providing as tough competition. Some factors of the analyzing of the special strategies adopted by the company can be analyzed, as there have been several economic backgrounds that the Chinese market needs to keep in notice while performing business all over the world. The business modules developed by the companies needs to be analyzed depending on the functional ability of the country and according to the delivering capability of the company. According to the industrial market and also the development of the Zokoko company the depends on availability of the product and the processing of it in the industrially active cities of the country like- Beijing, Shandong, Jiangsu, Shanghai, Zhejiang (Novela & Hansopaheluwakan, 2018).
The location of the market and the rate of supply of the product plays a vital role as the availability of the product also help as in increasing the demand of it therefore the factors of choosing he are areas for the supply of the market is important for the organisation to survive and flourish in the local market. Jiangsu and Zhejiang are the two cities that are closely associated to the chocolate company Zokoko. Therefore, the company will be looking forward for enabling the market with different types of products in the market and making success (Madsen & Walker, 2015).
The local state government and the central government always define the government policies as well as the regulations regarding the developing of the marketing and other strategies that re adopted by the company. Therefore the regulatory laws as prescribed by the legislative is one of the important factors that has made the companies abide by the laws and also made the function of the company ethical and justified(Lu, Zhang & Fan, 2016). The health care sectors play a vital role in production of the chocolates in the company as the products needs to checked and passed through tests after production. The Ministry of Health (MOH) and the State Food and Drug Administration (SFDA) is one of the most important sectors that surveys the companies and checks the production quantity as well as the quality of it. The cost of the market entry is also a very important factor that is being changed and set according to the government regulations (Wei, Clegg & Ma, 2015).
Considerations for International Human Resource Issues
The market research also needs to be analyzed, as there are certain factors that needs to be analyzed specially the assessing of the market opportunities are significant for carrying out the research works of the organisation. This will help in the management and organizing the effective market research of the company. Thus, the size and the structure of the market opportunity of the company needs to be assessed, so that the business organizations are able to measure the future performances of the company. Hence, the marketing situation and also analyzing of the strategies are noticed (Mayorova & Lapitskaya, 2016).
The Porter’s Generic Competitive Strategies can be taken to be analyzed as the cost of the leadership, cost of the focus, differentiation focus are to be analyzed as there have been a lot of competitive factors of the company that needs to be analyzed for Zokoko. According to the Porter’s Strategies, the basic types of the competitive advantages are to be combined by the scope of activities of the business organization (Panwar, Nybakk, Pinkse& Hansen, 2015, July). The three generic strategies for achieving above the average performance of the company, it needs to analyze the cost leadership, differentiation and focus. The cost leadership helps determine the low cost producer in the industry (Omsa, Abdullah &Jamali, 2017). In the differentiation strategy the firm seeks to unique and its industry along the dimension which are valued by the buyers. In addition, the focus is differentiated in the target segment that is the cost focus and the differentiation in the target segment is termed as the differentiation focus (Kaya, 2015).
The chocolate is in fact a complete appropriation in the Western Culture just like the consumption of cow milk, coffee or the red wine. In addition to these the Chinese market and the people are traditionally known for consuming the food for their health and benefit. According to Esteve-Pérez, the Chinese people are known to traditionally consume the food which is for their total health benefit (Esteve-Pérez & Rodríguez,2013). To them the means of having the chocolates are of no mean as because sweets are not the sole pleasure of taste in China. It will be only consumed if the product is beneficial to the health and has an advantage to the human metabolism. The marketing practice which is recommended over here is associating the consumption of dark chocolate along with the sports practice. If Zokoko is successful in implementing this strategy in their advertisement then it will be able to market its product to a huge amount of mass in China.
Conclusion
Also having a scope of e- commerce and m- commerce is very much a necessity to the company. This type of technology is much adopted in the geographic area. The users and the customers are known to spend much of their time in the online means rather than roaming and visiting shops. The uses of multimedia and online application are much in use thus making the unpleasant life happier. The organization therefore makes various types of online measures in order to capture the market and stay competitive to the market. Also they can set up various types of campaigns to attract the customers which will help them getting the information about the availability of the new product. The product campaign will increase the marketing of the product, they should also market their product in a different manner that is by associating it with the health drinks and the energy drinks. This will help the organization to separate them and the product from the competition brands in the Chinese market. With all these strategies implemented the organization will be able to capture and retain the Chinese market where chocolate is not much in demand.
The company should also make proper use of the Research and Development means to make their product more innovative and suitable for the Chinese market. The research and development of the company should be able to develop new technological ideas which will be helpful for further marketing in the minds of Chinese customers. The Research and development should make use of the Disruptive technology and other measures that will create an optimal association of ideas in the minds of the customers and in their minds. The organization should market their product in a ways which will help the customers to remember it just like associating sports with dark chocolate : Dark Chocolate + Sports = Success Factors gained by the individual. Therefore it will require to choose and development one or more sports brands successful in the Chinese market that will be able to create a strong visibility to the brand.
The product recommendations needs to be applicable for the company, as it needs to develop its status in the international market and also increase its reach and availability in the stores therefore the product needs to be going through several and extensive marketing strategies. This will help the product reach out to the mass and increase its demand all over. The best sellers of the company needs to be highlighted as well as the stake holders of the company needs to be acknowledged and discussed with so that the company successfully flourishes in the market. The company should be updated with the latest trends and should be giving discounts and granting give-away as well. The company should be focusing on bringing in new variants and should be setting new targets so that it can gradually expand its market. The local flavors and the essence should be incorporated with the branding of the product and in the product as well. The purchasing behavior of the customers must be kept into account so that the company may also increase the rate of the production of the items on high demand.
Operating human resources across cultural and geographic boundaries can prove difficult for new business managers. Zokoko will also face the cultural, political and social difficulties to operate their business in China.
Difficult to find top talent:
This is one of the significant problems faced by human resource professionals who recruit staff for their organization in China. On the basis of the survey, it was observed that two out of three foreign companies face this difficulty (Gore, 2014).
Increasing labour Cost
In the past few years, the labour cost in the manufacturing sector in China grew by 12% a year. And for that reason the overall cost of production also increases (Farndale et al.,2017). This can be due to rapid growth of Chinese economy. But this is good impact on the employee’s standard of living. It can put Zokoko off running their business in this country.
High employee turnover
The average worker turnover rate in China is 19%. Thus the productivity gradually decreases due to lower employee satisfaction. Because there is a strong connection between customer turnover and employee turnover.
Language Barriers
Language is one of the most important things when the company Zokoko offers training to Chinese staffs or employees. Chinese local language is very difficult to understand. So, the expatriate of the Zokoko Company will face this language problem. Most of the Chinese labour doesn’t know the English language. So, they communicate in their local languages. This creates a big problem in communication.
Cultural diversity
Chinese culture, their food, language, religion all are completely different from other country culture especially Australia. So, for the expatriate, it is very difficult to adopt these cultural differences. It is one of the significant challenges for the expatriate of zokoko.
Conclusion
The report thus specifies the development of the Zokoko chocolate manufacturing company and specifies it position in the market. The strength and the weakness of the company has be analyzed depending on the probable threats that the company may face. The opportunities of the company has been analyzed as well, which will be serving for the development of the company. The competitive situations are analyzed based on the Porter’s Generic Competitive Strategies. Other additional analysis of the product that are required for the company are discussed that will help the company achieve a greater market value and also will help the company gain recognition and status among the customers and in the market as well.
References:
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