How can the Mistakes of Other Firms Help Sainsbury’s to Successfully Enter Chinese Markets
How can the Mistakes of Other Firms Help Sainsbury’s to Successfully Enter Chinese Markets
Over the last few years, China has emerged into the world market. While the retail sector has only existed since 1992, this now accounts for 20% of total sales in China. There has been significant growth in this sector since 2001, and it shows no signs of stopping. This is driven largely by the middle class, who has had an increase in numbers from 42 million in 2005 to an estimated 200 million in 2015, leading to predictions that the retail sector could be worth 2.4 trillion dollars. Some of these figures may be based on information from before the 2008 financial crisis; however there is still good reason to expect high growth from the Chinese Economy.
It is for these reasons that your company has decided to expand into the Chinese Market. Unfortunately, you cannot simply decide and then enter. This has been illustrated by many big firms such as Wal-Mart, Tesco, Carrefour, who have failed in foreign market.
Speaking of failure, it is important for us to define failure for your company. The most obvious form of failure would be if you were unable to establish yourself in the Chinese Market and were forced to leave. Another form of failure would be if you were making losses or not achieving your goals. Your company may have personal goals that aren’t made public, and so it is important to keep these goals in mind when making your evaluations on how the entry is going.
There are many risks. We have managed to separate them into 3 categories. This presentation is to show you mistakes other firms have made, and suggest ways in which you can avoid them and ultimately enter the Chinese Market successfully. We will illustrate the different causes of business failure with real life examples, mostly from the retail sector however we’ve included some others that will also be useful. It is important to remember that even in markets with a lot of potential, you can still
Over the last few years, China has emerged into the world market. While the retail sector has only existed since 1992, this now accounts for 20% of total sales in China. There has been significant growth in this sector since 2001, and it shows no signs of stopping. This is driven largely by the middle class, who has had an increase in numbers from 42 million in 2005 to an estimated 200 million in 2015, leading to predictions that the retail sector could be worth 2.4 trillion dollars. Some of these figures may be based on information from before the 2008 financial crisis; however there is still good reason to expect high growth from the Chinese Economy.
It is for these reasons that your company has decided to expand into the Chinese Market. Unfortunately, you cannot simply decide and then enter. This has been illustrated by many big firms such as Wal-Mart, Tesco, Carrefour, who have failed in foreign market.
Speaking of failure, it is important for us to define failure for your company. The most obvious form of failure would be if you were unable to establish yourself in the Chinese Market and were forced to leave. Another form of failure would be if you were making losses or not achieving your goals. Your company may have personal goals that aren’t made public, and so it is important to keep these goals in mind when making your evaluations on how the entry is going.
There are many risks. We have managed to separate them into 3 categories. This presentation is to show you mistakes other firms have made, and suggest ways in which you can avoid them and ultimately enter the Chinese Market successfully. We will illustrate the different causes of business failure with real life examples, mostly from the retail sector however we’ve included some others that will also be useful. It is important to remember that even in markets with a lot of potential, you can still