Marketing Environment Essay Example | Topics and Well Written Essays - 2000 words

Marketing Environment - Essay Example The company was recently noted to have started transactions with the economy of Japan by offering the Japanese customers with regular and premium quality of wine. In its future expansion panning, Company A has selected the market of China owing to the opportunities and the threats presented by the Chinese wine industry in comparison to the other probable target markets including that of UK and USA (Department of Foreign Affairs and Trade, 2012). The core objective of this paper is to state the procedure of expansion of a wine company from Australia to the selected market of China explaining the reason for focusing on the Chinese market rather than USA and UK. With this concern, the study will emphasize on conducting a situational analysis in order to gain an in-depth understanding of the target market, based on which, particular strategies will be suggested to the company with regards to its expansion plan. Country Brief All the three prospective markets for Company A’s expans ion planning, including China, USA and UK, are having good trade relationships with Australia. In the three countries the demand for wine is high and plays an influencing role for the wine producer or company. However, it is worth mentioning that a few differences made Company A to choose Chinese market for its expansion. With a substantial rise in the total population of China, demand in the wine industry have also been noted to increase at a significant rate as wine is considered to be an inseparable part of Chinese culture and lifestyle (Conley, 2007). On the other hand, the population of USA is increasing, but at a low pace. However, the demand for wine is increasing rapidly and has influenced many companies to expand their businesses in USA. It is in this context, the USA wine industry can be identified as majorly captured by the national companies which develop the industry to be a concentrated one with barriers for the foreign companies. Hence, while deciding upon expanding t o the USA market, Company A might have to face various competitive factors which might restrict its sustainable growth (Colman & Paster, 2007). The Chinese wine market can further be regarded as more promising than the UK market based on various facts. For instance, UK has witnessed a significant fall in its overall consumption of alcohol due to increased taxation rate and other legal constraints. The recently recorded figure shows that the consumption of alcohol in UK fell by 11% in 2010 in comparison to that of 2004. Moreover, impositions of duty charges and other taxation limits also act as barrier to foreign wine companies to enter in the UK market. On the other hand, China has gradually developed as a leading purchaser of alcohol in the international market. Moreover, in the international context, China has also been observed to consume more quantity of wine than USA (The Wine and Spirit Trade Association, 2011). The growing population in China along with the subsequently incre asing demands in the market plays a significant role as a vital attracting aspect to many foreign companies, especially in the current wine industry. Australia and China are interdependent on each other in terms of foreign trade through Free Trade Agreement (FTA). Subsequently Company A, being an Australian company, can enjoy various benefits in terms