Company Background
The food trend all over the world is subjected to a rapid change in regard of the health concerns. People of this generation are significantly conscious about taking their food and with their choices of the food, it is evident that they want limited but sufficient amount of the food (Pilcher 2017). The concern about their health in their immense busy life is forcing them to compromise and to be significantly choosy regarding their food selection (Liu, Pieniak and Verbeke 2013). This gives them the assurance about their healthy living and eradicates their concern of food related issues along with improving the gastrointestinal system (Ghalichi et al. 2016). These significant benefits are focus of the entire world as the people would get significantly benefitted from the gluten free foods and the current trend of the people in the consumption of the foods is largely following the benefits. The benefits are visible for the large population of China as well as there are significant number of people suffering from the gluten disorders. The wide range of benefits coming out of it provides enough space for The Gluten Free Food Co. to enter the Chinese market with a possible assurance of profitable business looking at the size and impact of it in the Asia Pacific market. The purpose of the paper is to analyse the scope of the organization to enter into the Chinese market.
The organization is an established body in the Australian market of gluten free products and manages their business keeping a keen focus on the health standards of their customers. The organization had a massive share in the total market share of 26% in the Australian gluten free food industry (Australia.gov.au, 2018). The prime focus of the organization is to serve products which will not result in gluten related disorders and will be able to protect the customers from the adverse impact of Celiac disease. The key advantage of the organization was that the organization had Monica Topliss in their top level management as one of the prime decision maker for the recipes and menu of the organization (Gluten Free Food Co, 2018). A person who herself experienced the adverse condition of Celiac disease, was absolutely impeccable in deciding the ingredients for the food products of the organization.
The gluten free food products are much needed choice for a broader section of the world as considerable number of people are facing diseases like celiac disease, gluten ataxia, wheat allergy, non-celiac gluten sensitivity and dermatitis herpetiformis (Lamacchia et al. 2014). These are all gluten related disorders which affecting the health of the people in a significant manner. People are not only taking it for celiac diseases as the gluten free diet has a much widespread list of benefits connected with it. The gluten free diet is instrumental in providing an alternative treatment for the people with autism (Buie 2013). Hence with the influential impact on the people, gluten free products are the necessity of some markets like China.
Background
Strength:
The organization largely deals in online mode via their website which is significantly advantageous for the organization to enter a tech-savvy nation like China (Brierley et al. 2014). The website provides the customers with the much needed ease in finding their choices without any sort of issue. The good quality food products with precise focus on the health standards of the customers makes the organization one of the most trustworthy and preferred destination for the gluten free food products. Another factor which can be considered as the strength of the organization is that the excellence of Monica Topliss in managing the new products quickly but having said that the organization still is unable to produce significant number of different products in the market.
Weakness:
As the Chinese gluten free food market is significantly congested with large number of market dominators, the organization will find it difficult at the initial stages and the lack of their qualified workforce can be a critical issue in this case well. The lack of the innumerable number of gluten free food products available in the organization’s menu is a major concern for the organization in developing their business in china as well (Gluten Free Food Co, 2018). The general capacity of the organization regarding the number of their employees is a significant barrier for the organization in producing large number of food products as the scope of producing according to the significant demand of the Chinese market with the existing employee strength is considerably limited.
Institutional:
The organization is approaching a business expansion in the new market in form of China. China as a country incorporated the industrialisation in a significant manner. The country is termed as industrialising giant in the world and falls in the section of upper-middle regarding the income (Wong 2013). The country is significantly approaching towards a rapid rise in the literacy and the wage rates and that makes an important justification for considering the Chinese market as a booming industry for the gluten free food products.
Micro-environmental factor analysis:
The increment in the literacy rates is a notable proof in considering that the people of the country will be aware of the negatives of the gluten related diseases. The country has large number of people suffering from these gluten disorders (Yuan et al. 2013). The increment of the wage rates makes sure their concrete connection with their professions and being a responsible professional, the individuals cannot afford to compromise with their diets in order to stay fit and fine.
Organizational Analysis
Political:
The Chinese market is strongly influenced by their political views as the trade in that market is strongly dependent on the political assumptions (Wong 2013). The people of china is significantly tech-savvy and busy in their daily operation. The political influences from the leaders of the society is immense in making sure that the people consume healthy products and services. The reason behind the monitoring of the food qualities from the political sectors of the country is controversial to state, however the attempt of capturing the preference of the people in the country from different political houses can be considered as the reason of concrete observation of the food standards. The political influence in the region plays a pivotal role in making sure that the market offers sufficient amount of gluten free food products (Wong 2013).
Economic:
The Chinese market is one of the biggest food market in the Asia Pacific region. The market is full of various competitors as well. In 2016, the Chinese market was recognized with the tag of the largest market for gluten free foods and beverages in the Asia-Pacific region with an estimated share of 35% (English.mofcom.gov.cn, 2018). This provides the assurance to the concerned organization of getting a profitable business in the new market. The CAGR report forecasted the rapid rise of China as one of the fastest growing gluten free food market with a growth rate above 14% during the 2018-2023. This makes sure that the new organization will not only be able to conduct fruitful business in the new market at present but also contains the future scope of increasing the business as well.
Social:
The societal preference of the Chinese community is highly influential on the well-being of the people. The cultural differences between the base country and China is instrumental in terms of the business expansion of the chosen organization. The Chinese country largely believes on the superior subordinate policy which does not have much impact in Australia and in that case the organization needs to calibrate their visions and policy in the suitable manner (Hofstede Insights, 2018). Unlike the Australian society, the Chinese country largely focuses on the collectivist approach and the recruitment and promotional policies gets highly influenced by this approach (Triandis 2018). The concerned organization need to make sure that the policies regarding those sectors align well with the Chinese culture. The Chinese society believes in the ultimate gain and they focuses on gaining the maximum at every instant to be the best every time (Hofstede Insights, 2018). The Chinese Society believes in the perfect method of adapting the adverse situations at every time to follow the long term orientation policy and the organization will get benefit out of it in their survival in the market along with creating the brand for their company. The prescribed diet information in the amendments of the World Health Organization are significantly changing the perspective of Chinese people in buying the gluten free products.
Target Market Segment Profile
(Chart Courtesy: https://www.hofstede-insights.com/)
Technological:
With the strong rise in technological advancement, the country and the people of it is highly technology oriented. China is a market leader of the technological applications and gadgets which makes the country well aware of different technological aspects in promoting a particular product in the market (Viitanen and Kingston 2014). The organization will get sufficient amount scope of promoting its products in the new market by different mobile applications and will be able to do the same in various social media platforms as well. This will give the organization an added advantage in the competitive new market to provide some limelight towards their own product. The maximum efforts of the organization to reach the Chinese people must follow the path of the technology as the maximum amount of chance of getting their attention will be subjected to that path only due to their friendliness with the technology (Leeflang et al. 2014). The introduction of the technology into the production of the gluten free food products in the organization will be largely appreciated by the new market.
Environmental:
The gluten is a mixture of proteins that is usually found in the wheat, barley, rye and oat (do Nascimento et al. 2013). The processing of the gluten free products will generally decrease the environmental balance as the product list of it relates to the fish, meat, eggs and seafood and many more. The organization must consider the scope of reduction of any sort of pollution resulting from the daily conduct of their business in order to provide the people of the country the required amount of breathing space in experiencing a green environment.
Legal:
The legal support from the government organizations in china in establishing a gluten free food list and sufficient number of organizations serving the need of the people regarding the gluten free food products is highly appreciable. The increased amount of business from the country in the global gluten free food industry is boosting statistics factor for the plan of the expansion of the organization. Along with these, the increment in the population of the country will serve the major current disadvantage of the organization which was the lack of apt employees in the organization (Gov.cn, 2018).
Opportunities:
The general concern of the gluten products among the people of China is a major scope for the organization in expanding their business in the new country. The increment in the product chain by the organization keeping a focus on the gluten free food products will enable the organization with the much needed scope of expanding their business by countering the concern of limited amount of available gluten free food products in the Chinese market and will enable the organization to eradicate their weakness as well (Lam et al. 2013).
Micro-environmental Factor Analysis
Threats:
As the Chinese market is highly competitive and the effect of it in the Asia pacific region is significant, the industry will be approaching large number of market competitors and the concerned organization will feel high competition due to that. The organizations like General Mills, Heinz or Gruma are significantly dominating the world market and being one of the significantly influential market for the Asia-Pacific region, the Chinese market is feeling the competition of the mentioned organizations as well. As the mentioned organizations are having worldwide reputation, the organizations are able to establish a significant brand awareness among the people of China. The absence of significant brand awareness is also a major reason of concern for the concerned organization in the new market.
Competitors:
The Asia Pacific region including the Chinese market is significantly congested with high number of market players but the significant ones are Heinz Company and General Mills Inc. Heinz entered the market by the partnership with the Sanquan Food. The general food products like soup, soy products or the food products from potato, rice or beans and corn are highly appreciated by the customers and the excellence of the organizations in producing them is major reason behind their customer retention (do Nascimento et al. 2013). The growth of sales of General mills increased from 12% in 2014 to 18% in 2017 in Chinese market and sharp increase in the sales of Sanquan Food is observed after the entry of Heinz which is a significant concern to the organization in the new market (Generalmills.co.in, 2018).
Conclusion:
From the discussion, it can be concluded that the technological framework being the strength of business of the concerned organization, will enable customers with the desired scope of getting familiar to the new products of the concerned organization and the probable increment in the product chain will be significant as well. The organization need to focus on the number of available efficient employees as that is a major weakness of it, in order to be able to cope up with the pressure of the competitive market by serving larger number of customers with higher degree of customer satisfaction so that the desired threat of brand awareness gets minimized. The amount of sales of the gluten free foods in the country along with the awareness among the people regarding the detrimental effects of the gluten will help to ease out the initial struggle of the organization in a new market.
PESTEL Analysis
Product:
The organization sells the gluten free products and as mentioned above the preferences of those products for the health conscious Chinese people will give sufficient space to the organization to deal in a profitable manner. The organization must concentrate on the expansion of the number of the gluten free food products that they are offering in order to cover the wide range of different food wishes of the people of China. The excellence of the organization in processing the food products will be influential in the Chinese market once they are able to increase the product chain.
Place:
The Chinese market for the gluten free products is one of the largest market in the Asian origin with a significant amount of share in the international market which is influential in the plan to expand the business for the concerned organization.
Price:
The products need to be subjected to 5% of the discount on the first order so that it can be able to promote its product by the customers and the organization must implement a customer engagement plan like a picture with the product of the customer in their official page. This will enable the organization to only promote their products in the competitive Chinese market but also will give the concerned organization with the space to create significant amount of brand loyalty.
Packing:
The general concept of packaging must incorporate the description of the adverse effect of the gluten in the form of celiac disease and gluten disorders. The negative impact must be visible in the form of art on top of the packaging of the product. This will spread the awareness among the people.
Promotion:
The introduction of the Chinese superstars of the film industry or the international icons like Jackie Chan will be significant for the organization in order to promote their products in the new market
References:
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