The case of the furniture sector in China
1.0 INTRODUCTION
Today, more and more transnational companies (TNCs) are seeking to take advantages of operating business in foreign countries. Founded in 1963, Hong Leong Management is one of Malaysia's largest conglomerates, with have companies in different sectors such as financial services, property, manufacturing and infrastructure. Though the conglomerate has already obtained success through its intensive business operations in different countries including Australia, New Zealand, China, Singapore, the Philippines, UK and US, recently it's eager to continue diversifying its assets abroad. Therefore this report is writing as the proposal exploring Hong Leong Group's internationalisation opportunities in China's furniture industry, and in the end a overview of strategy for will be recommendated for business setup.
2.0 COUNTRY SELECTION
'The overall attractiveness of a country as a potential market and/or investment site for an international business depends on balancing the likely long-term benefits of doing business in that country against the likely costs and risks.' (Charles W.L.Hill 2003) China's political and economic stability, sustainable natural resource policies, established global marketing network backed by sound foreign trade incentives, developed infrastructure including modern shipping facilities, competitive labor force as well as strategically located in East-Asia with well-developed costal cities such as Guangzhou, Shanghai and Shenzhen, make it the ideal location in the region for investors.
2.1 Advantages
China's benefits can be elaborated by its market size, low cost and resource availability as well as the market growth, government regulations and policies.
2.1.1. Market size
Firstly, China's market potential mainly lies with its vast market size and rapidly-growing purchasing power. With one fifth of the world's population, China enjoys a household savings rate of more than 40 percent, one of the highest in the world. As incomes rise, newly empowered consumers represent an enormous market potential. Its higher rate of GDP makes it more attractive...
More Businesss Research Papers
essays:
Internationalisation opportunities for the Hong Leong Group: The case of the Telecommunication sector in Thailand.
... acquired company provides a set of both tangible and intangible assets. However there are conflicts over organisational, business, culture and underestimation of pre-acquisition financially (Hill, 2003). Despite the high cost, acquisitions will enable Hong Leong Group to access the market ...
Basic accounting concepts in the case of the Volkswagen AG
... and company law sees the role of financial reports as being essentially the communication of information from the managers of the business, that ...
The case of the building material sector in China
... steel industry and cann't give enough control on HLG's foreign business operation. By FDI, HLG can avoid the tariff and non-tariff barriers and can save the transportation cost. Meanwhile, companies can ...
South african breweries. this case is about the osition of the brewery and its strategy.
... its business risk across a wider market base. The strategies a beer company uses to compete in foreign markets have to be situation-driven -cultural, demographic, and market conditions vary significantly among the countries of ...
The case of the underwater option "Miriam Schulman" Case study
... company. Mrs. Gallagher and employees put their families and health at risk to finish a product on time. In the end there were no winners. References: Book Carroll, A. B. (1991). The Pyramid of Corporate Responsibility. In Business ...
The Case of the Floundering Expatriate - A Case Analysis (includes key issues and learnings)
... on international assignments have to be sensitized to the cultural practices followed in their country of operation. This ...
The Case of Brewing Sector in Russia
... brewing industry. Finally, the different foreign market servicing strategies that may be suitable for Hong Leong Group will be presented. The decision of location of headquarters and functional areas will be also considered. 2. SELECTION OF THE COUNTRY The ...
Critically assess the case of government support of small business, both in terms of business start - up and development
... small businesses. 2.2.1Start-up support This means governments supporting individuals to set up a company or newly created companies to survive in the market. Support takes place in different ways, such as financial support ...