Global Market Environments
The National Waste Policy indicates a need for waste management approach in Australia that efficient coherent and environmentally responsible. It sets a direction for resource recovery and waste management. The policy on Human Rights and Anti-discrimination provides that the Australian government has an obligation Under the International Law to protect, respect and fulfill all human rights.
E-commerce or electronic commerce refers to a business model that involves carrying out transactions over the electronic network and typically the internet. It involves buying and selling of products electronically aided by certain software (Sun & Finnie, 2004).
B2B refers to the kind of ecommerce that involves business transaction between business organizations as manufactures to distributers or wholesalers to their retailers. B2C involves a business selling its products or services electronically to the general public and can use a catalog which utilizes shopping cart software (Sun & Finnie, 2004). C2B involves a consumer posting a project online with a given budget and firms review the requirements of the project and bid on it and after reviewing the bids , the consumer select the firm to complete this project. C2C involves a consumer places products on a site which offers free classifies , forums and auctions to other consumers .B2G involves a transaction where a business offers products or services to the government(Sun & Finnie, 2004) .
Brick and mortar involves a business having a physical presence in terms of stores which are made from physical materials like bricks and mortars and customers have to go to that place to so as to see, assess and buy a product. Click and Mortar on the other hand involves a business model which consist of both offline and online operations which normally (Sun & Finnie, 2004). In this model there is both a physical sore and a website.
The global ecommerce companies with presence in Australia include eBay, Amazon and Gumtree
Three ecommerce technologies that provide a platform for global online enterprises includes Shopify, Bigcommerce and FastSpring
3.
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Australian Consumer Law (ACL), 2011 |
While working with customers, selling goods or providing services, a business has to consider the obligations it has on other parties. |
Privacy Act 1988 |
This act regulates how a business should handle personal information about its customers or clients by setting out standards |
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The Work Health and Safety Regulation 2011
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This acts provide an obligation for a firm o ensure health and safety of employees carrying out marketing activities, customers, suppliers and visitors |
The Environmental Protection and Biodiversity Conservation Act |
It covers the evaluation and approval concerns both cultural and environment that arises from marketing activities of a firm. |
Workplace Relations Act 1996 |
It influences on the manner in which industrial dispute should be settled through employees minimum entitlements and negotiations of employees |
Fair Work Act 2009 (Cth) |
The employees working in the marketing department should not be subjected to any harassment, discrimination or bullying. |
Disability Discrimination Act 1992 |
A person seeking to be involved in marketing activities should not be denied an equal opportunity on the basis of their disability. |
The Pacific Agreement on Closer Economic Relations (PACER) Plus |
Offers opportunities for marketers to exploit opportunities arising from better regional economic and trade integration |
The Singapore-Australia Free Trade Agreement (SAFTA) |
It eliminates tariffs and thereby increase the market access for services exporters in Australia |
The China-Australia Free Trade Agreement (ChAFTA) |
It basically offers improved protection and access for Australian businesses in the Chinese market |
4.
The function of OECD is to promote various policies aimed at improving the economic well-being of the populations in the world. The organization publishes economic reports, analyses and then forecasts the economic development and growth in the entire world economies. The organization makes various recommendations on policies that are designed to enhance growth while considering the environmental issues. It also restores confidence in the world markets and those institutions that keep them functioning. It fosters global corporation between countries while supporting new sources of economic growth through development strategies and innovation. The member states promote democracy in order to enhance free market economies (OECD, 2016).
Task 1.1
Establishment of global value chains is a major trade pattern involving trade flows or intermediary goods trading. This may affect the A& A Coffee in terms of the competition it will have to counter against multinationals that position their products in the Asia – Pacific markets. There is domination of trade by relatively few nations who are mostly the emerging Asian economies and the developed countries. A& A has to bear with the various trading agreements between the developed countries and Asia Pacific region since they may impact on the manner in which it carries out trade in the region. A shift of trade from major flows between Europe and US, to major flows between Asia and US has informed another trade pattern. This has lead to emergence of trade blocks which outlines how business is to be carried out among these countries. Policies that spell out removal of tariffs can impact greatly on the A&A Coffee. Other patterns which can impact on the business expansions for this firm include increased online trading and marketing and an increase in mergers and acquisition between major international and local firms.
The role of governments in Asia pacific regions in determining or facilitating the essential requirements for ecommerce development like availing ICT infrastructure can affect the way A& A Coffee carries out its online operations or online transactions.
Task 1.2
Accessibility – since internet is a main source of information, an e-commerce site can be an important tool where A&A can easily communicate with customers about the firm’s products, their usability and the manner of delivery.
Security, fraud and hacking of information can be a major hindrance to the success of a business (Sun & Finnie, 2004). . For A&A to succeed, it has to consider information security against fraudulent behavior which is a major concern for e-commerce users.
A growing use of cashless transaction such as debt cards and other online payments methods should inform business to adopt such changes. A & A has to embrace such payment methods in order to ease transactions and payment procedures for Asia –pacific clients.
Growth in global mobile use and hence mobile commerce is another factor that is driving online market through mobile internet. In the Asia –Pacific region, A&A has to tap into such technology to remain competitive.
Task 1.3
South Korea
Japan
China
The South Korea presents the easiest entry among these markets due to the fact that it is a developed democracy which means that there are fewer risks in the business environment. Moreover, the country is more dynamic as compared to Japan, is more entrepreneurial and its corporate culture is very aggressive. Japan marker consist of very demanding customers and due to its big economy , a firm willing to expand to Japan has to have substantial investments. China is the hardest market for entry given the different make-up and nature of markets in the country and this calls for careful selection of business location.
Task 1.4
International trade agreements and policies provide firms with an opportunity to market a wide variety of goods and services which can stretch across all sectors of a given economy. Another opportunity provided is an outlet to sell the additional production after the flooding of the local markets with their goods. In addition, such agreements and policies for companies to invest further research and development so that improve existing products or introduce new products into the new created markets. Therefore, A&A Coffee Company can access wider market for goods and services and sell any of the excess products to new markets.
Task 1.5
Despite China having a protectionist policy on its markets, it is the best country in Asia-Pacific region to invest in. this is because China’s economy is growing at high rate which is driven by the sheer size of the market due to high population. The political environment in the country is stable as compared to other regional countries. The population is increasingly being made up of middle class who have a high purchasing power. The government is providing opportunities for private ventures and the trade agreements and policies it has adopted acts as a commitment to offering such business opportunities to A&A Coffee for expansion.
Task 2.1
Economic factors: these involve the consumer purchase intention and behavior which determines the context of marketing and advertising in a given country and a firm has to adapt the right approach in a region it aims at penetrating. Another aspect is competitiveness of marketing price which may impact a certain region depending on consumer’s sensitivity to price (Dlabay & scott, 2010).
Cultural factors: these consist of demographics, tradition and cultural practices that influence the communication and negotiation styles adopted across different countries. The cultural sensitivity is important to international firms since it influences marketing tactics to be adopted in a given culture. A barrier to communication due to different languages affects the marketing and advertising techniques and a firm will have to adapt different strategies in different countries depending on their culture. The sensitivity of various cultures may determine the level of negotiation for businesses since cultural analysis of products benefits between regions can determine how the negotiation will take place (Dlabay & scott, 2010).
Social factors : these involves the manner of interactions between customers in a given region and businesses and this can result to further marketing tactics and messages that can be developed by international firm in new business environment. If customers fail to identify with the perceived benefits of product, it is possible that they will not buy it (Dlabay & scott, 2010).
Political factors: these include the policies and laws instituted by the governments in the region which affect the desire of a firm to expand operations in given country. Policies on tax and interest rates and regulations on marketing campaigns determine the decisions made by management and how they are implemented in a given country (Dlabay & scott, 2010).
Task 2.2
Market trends
Demographic trends – there has been increased attention paid to ensure various offers meets the demands of a certain demographic segments and considers the aging population and diverse population for countries such as China. Changing lifestyle issues has led to consumers becoming more demanding so that they are seeking convenience products solutions such as foods and which represent an advance on traditional foods that are processed. There is also rising demand for quality products and health issues. The retail trends are becoming more powerful and diverse where convenience stores are making headway and growing stronger in areas such as rail stations and airports (Dlabay & scott, 2010).
Task 2.3
Emerging Businesses and e-commerce markets
Among the emerging businesses includes offering foods services that are purely made of plants and with as less sugar as possible. This is due to increased health concern being raised on animal based foods. Another opportunity is the increased health candy sales, which are based on natural ingredients, healthy favors and the inclusion of natural vitamins. This is being driven by the need to keep children from eating junk food. The sale of vegetarian foods presents an opportunity for A&A Coffee to expand into the foreign market while differentiating it products from other unhealthy products. The firm can also turn to the health candy growing market to increase revenues in such foreign markets. The firm can expand into UAE and India which are emerging e-commerce strongholds (Marceux, 2015).
Task 3.1
Risk factors
Political risk- this concerns the political stability in China, and this involves the country’s unbalanced nature of instituted reforms and governments unsure approach towards liberalization of economy and free market operations. This risk also involve the restrictions on economy and labor mobility, systems for public and tax expenditure and lack of transparency in setting up policy making process, accounting standards and independence for business operations (Prasad, 2016).
The financial risks which can be attributed to China involve liberalization of capital account, possible surge in capital outflows that can destabilize the country’s financial system and overall economy. The other aspect includes banking system stability, stock market swings and a big shadow system of banking. Another concern is the country’s debt burden that can be an impending crisis (Prasad, 2016).
The legal risks – involve considerations of whether the market is open to an investor and the required licenses for a firm to export products on various markets such as the EU. This also involves various technical regulations and standards, some of which are known not to align with international standards that have been established (Prasad, 2016)..
The Chinese ICT and telecommunication infrastructure determines the manner in which marketing and advertising activities can be carried out in China and related regulations. It also involves the availability of ICT infrastructure that can allow carrying out business transactions online and accessing the online market place that best suits a firm’s products and services in China (Prasad, 2016)..
Legal and regulatory requirements involve various laws that have been instituted and which must be adhered to by firms expanding into these markets. These factors relates to the tax policies , economic regulations , labour laws or general laws that direct the operations of business activities in the country(Fogel, 2010).
Cultural factors: China has the largest population in the world and this comes with many ethnic and language groups with diverse way of live. A firm intending to expand its operations into this country must be sensitive to the cultural values and ways of lives and respect the various systems which protect this diversity (Fogel, 2010).
Trade barriers: the risk of trade barriers between China and Australia has been greatly eliminated following the ChAFTA which allowed for duty-free entry or preferential rates to the Australian exporters. This has opened up the market for exporters especially for the food products industry, who can easily extend their operations into this huge and diverse market (Fogel, 2010).
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tragic |
Critical |
Marginal |
negligible |
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Rare |
severe |
Severe |
High |
High |
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Unlikely |
Severe |
High |
High |
Moderate |
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Possible |
severe |
High |
Moderate |
Low |
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Likely |
Severe |
Moderate |
Low |
Low |
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certain |
Severe |
Moderate |
Low |
Low |
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Tragic |
critical |
Marginal |
negligible |
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Rare |
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Trade barriers: |
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Unlikely |
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Possible |
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financial risks |
legal risks ICT and telecommunication infrastructure |
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Likely |
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Political risk |
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Certain |
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Cultural factors |
Legal and regulatory requirements |
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Chinese developments are not insulated from the global economic shocks that affect other countries. The recent financial crises have affected the growth of Chinese economy greatly, due to a sharp decline in the foreign investments and exports. Such crisis leaves China requiring big fiscal stimulus for it sustain the required rate of growth and economic development, so as to absorb labour force in the midst of international weakness in global economy. However, where the global financial systems are strong, the Chinese economy would respond positively due to increased exports and foreign investments by firms in the local and foreign markets (CPDS, 2016).
Task 4.1
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Offering vegetarian based foods products |
Major marketing opportunity for A&A, where it can sensitize on need to consume its natural food products for health assurance. |
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health candy sales |
The firm can also turn to the health candy growing market to increase revenues in such foreign markets |
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Online sales – ecommerce |
A & A has to embrace such payment methods in order to ease transactions and payment procedures for Asia –pacific clients |
Task 4.2
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Offering vegetarian based foods products |
This opportunity would provide an opportunity to serve a variety of customers and hence increase revenue |
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health candy sales |
This can increase the customer base of the firm that wishes to abstain from unhealthy lifestyles |
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Online sales – ecommerce |
The use of online marketing opportunity can help to capture the attention of a wide customer base |
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Task 4.3
Projected cost in-Million AUD $
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Opportunity |
Optimistic cost estimate |
Most likely |
Pessimistic cost estimate |
Estimated percentage revenue |
Revenue estimate- based on most likely cost |
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Offering vegetarian based foods products |
35 |
40 |
50 |
15 |
46 |
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health candy sales |
100 |
1 20 |
130 |
15 |
138 |
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Online sales – ecommerce |
220 |
250 |
270 |
15 |
310.5 |
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In this analysis, the most likely cost may fail to be the value in the estimate. Thus, any results derived from the risks may not result from estimated cost base.
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ROI |
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Offering vegetarian based foods products |
15 % |
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health candy sales |
15 % |
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Online sales – ecommerce |
15% |
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Competitor analysis
Dehong Hogood Coffee Co. Ltd offer coffee powder and exports it globally and has the largest production of the product. It offers different types of instant coffee and would present a stiff competition for A&A Coffee.
Hainan Fuwang Industrial Co., Ltd. – the company offers various selection of products part of which includes low sugar coffee which can present stiff competition for A&A Coffee healthy product s.
Conclusion
The marketing of food products based on plants is an opportunity that can is a huge opportunity which can exploited by A&A company in a market which is increasingly becoming health conscious. This may face little political or economic risk given the government efforts to promote healthy lifestyles. the sale of healthy candy’s is one unexploited opportunity , and which can provide less risks in marketing the need for people more so children to consume health products instead of junk food. Of more importance is the need for A&A Company to consider embracing e-commerce in selling its products in order to minimize risks and expand on its revenue.
References
Sun, Z., & Finnie, G. R. (2004). Intelligent techniques in e-commerce: A case based reasoning perspective. Berlin [u.a.: Springer.
Dlabay, L. R., & Scott, J. C. (2010). International business. Mason, Ohio: South-Western.
Gartner,(2016).The Gartner CRM Vendor Guide. Retrieved from: http://mindgate.in/wp-content/uploads/pdf/The_Gartner_CRM_Vendor_and%20_Digital_Commerce_Vendor_Guide_2016.pdf
OECD,(2016).The Organisation for Economic Co-operation and Development (OECD) mission: http://www.oecd.org/about/
Fogel, G. (2010).Business Environment in China: Economic, Political, and Cultural Factors. Retrieved: https://www.usi.edu/media/3654697/Business-Environment-China.pdf
Marceux,P.(2015).Top 5 Emerging E-Commerce Markets in 2015. Retrieved from: http://blog.euromonitor.com/2015/07/top-5-emerging-e-commerce-markets-in-2015.html Tice,C.(2015).Why Entrepreneurs Are Betting On These 10 Emerging Food Trends. Retrieved from: http://www.forbes.com/sites/caroltice/2015/01/30/why-entrepreneurs-are-betting-on-these-10-emerging-food-trends/#149a5fa657bf Prasad, E.(2016).China’s economy and financial markets: Reforms and risks. Retrieved from: https://www.brookings.edu/testimonies/chinas-economy-and-financial-markets-reforms-and-risks/
Depart of Foreign Affairs and Trade(n.d).Free Trade Agreement. http://dfat.gov.au/trade/agreements/chafta/pages/australia-china-fta.aspx
CPDS, (2016). China’s Development: Assessing the Implications. Retrieved from: http://cpds.apana.org.au/Teams/Articles/china_as_economic_engine.htm
Dehong Hogood Coffee Co., Ltd. Retrieved from: https://www.linkedin.com/company/dehong-hogood-coffee-co-ltd-
Hainan Fuwang Industrial Co., Ltd. Retrieved from: http://www.sinofuwang.com/Contact/index.asp
kkna's Development: Assessing the Implications
