The Wine Market: Invest in China
Amigouet julien BA business
Table of contents
Part 1: Presentation of China 4
1) General : 4
1.1) Political 4
1.2) Demographics: 4
1.4) Economy (2008 figures) 5
1.5) Sociological context: 5
Part 2: China and the Wine Market (PESTEL) 6
2) Policy and Economicenvironment . 6
2.1) social context (culture and wine consumption): 7
2.2) Legal Environment 8
Part 3: Design Competition (Porter) 10
A) Intensity of competition 10
B) Power of suppliers' negotiations 12
C) Bargaining power of customers………………………………………………………...12
D) New entrants 13
E) The threat of substitute products 13
China is now a countrygrowing. In fact, with 1.3 billion people China is now among the BRIC economics. This constant exponential growth continues to attract the country and different sectors. Indeed, for various reasons such as costs of production, mastering new technologies, adaptability ... many countries consider it as a land saving.
Thus today we will try to respond more precisely to the fact that it is yes or nointerest to invest in China.
More precisely, Company X employed (dummy) located in Maine et Loire in France now produces red wines of good quality (10 euros on average per bottle) and wants to invest in China by exporting its products to it. She wants to set up a storage platform and distributed these products on the continent.
We will study the capacity of China's market and its likely or notto accommodate such actors.
Part 1: Presentation of China
1) General :
Third world countries in terms of area and first in terms of population, China is in the Far East, between Siberia and South-Eastern Asia. In addition to its population is estimated at 1.3 billion inhabitants and its capital is Beijing.
China has been governed since 1949 by four Communist leaders. TheChinese Communist Party was well maintained in power until today, sometimes by force, as evidenced by the bloody suppression of protests in Tiananmen Square in 1989. Today, the Chinese government can be characterized by a certain continuity with the previous communist government, even since the fall of the Soviet bloc. However, China still has launched many liberal reforms for several years andhas been active in the WTO (World Trade Organization). The current president is also Hun Jintao
Population Growth 0,59 % (in 2006)
Life expectancy 71.6 years (in 2006)
Literacy rate 85,8% (in 2006)
Language Chinese Mandarin is the official language. Many dialects are spoken in the country. Please note that English is very little known in the country, even in big cities.Religion Buddhism, Taoism, Islam, Catholicism, Protestantism. The constitution guarantees religious freedom, yet all religious movements are monitored.
1.4) Economy (2008 figures)
GDP $ 3500 billion
Growth Rate 9.5% per year on average
Urban unemployment rate 4,1%
Share of major sectors in GDP - Agriculture: 15%
- Industry: 53%
- Services: 32%
Currency (monney)The Yuan
China is a major global economies, and many experts see as the economic giant of tomorrow, including its huge population. 4th largest exporter after the European Union, Japan and the United State.
However, the Chinese economic development has been and is still very uneven across regions, and China is thus facing an economic challenge but also enormous social and above. Thus, coastalareas and more generally the East China experienced strong growth in recent years, but millions of Chinese still live below the poverty line to the west and north of the country, particularly in regions rural.
The development of China is undeniable, however, since the country has grown very significantly since 2001, almost 10% per year.
The Chinese economy therefore generates more and more...