Term Project—SWOT Analysis and Preliminary Marketing Plan Complete paper    
  Executive Summary The first section of this report critically investigated the Chinese market from cultural perspective. The geographical location of China was found to be critical for Lily Obrien as the potential customers are on the Asian continent where the demand for chocolate is expected to increase by 4% by 2020. Besides, the traditional feature of gifting is expected to give Lily Obrien an upper hand as the business offers luxurious chocolate as a present, which is a sale tactic. Relatively, existence of traditional festivals such as the Dragon Boat event, which occur annually and use gifting as a way of celebration, will be vital for Lily Obrien growth in China. Also, the report uncovered that the legal and political systems are also favourable to foreign investment, especially with the government being keen in maintaining an open trade policy. The positivity of the Chinese social environment is wrapped up by a robust education system and increasing literacy level especially among women. In the second section of this report, the focus was on investigating the economic environment for the Chinese market. To a great extent, the Chinese economy was found to be well-developed and stable. A favourable economic condition has been contributed by various factors such as stable GDP growth, increasing household disposable income, govern expenditure in R&D, and reducing rates of unemployment. In this regard, majority of Chinese are experiencing an improvement in the standards of living with only 10% living below a dollar a day as compared to 64% 36 years ago. The nation also enjoys a high availability of labour force. However, the report uncovered that employees are still being subjected to deteriorating working condition despite enhanced government efforts. In the second part of this report, the focus was made on product variables of Lily Obrien to understand how they are likely to trigger resistance or quick adoption among Chinese chocolate consumers as well as a market analysis to understand major factors that are likely to impact the Irish-based firm’s operations in China. The findings uncovered revealed that the product features of Lily Obrien are likely to be seen as superior by consumers especially due to the company’s current selling point: something that will give the company a relative advantage and significant observability. However, complexities are likely to emerge due to cultural differences between Ireland and China especially from indulgence perspective. Concerning the market, taste, packaging, and effective advertising were found to be the most significant factors that give companies a competitive edge in China. Foreign companies were also found to enjoy a large portion of the market share with Dove and Ferrero being the market leaders. The report concluded that while there is a great potential for Lily Obrien in the Chinese market, the firm must aim at product innovation to give its brand a great visibility in the market. In the last section of this report, the discussion was guided by three main objectives: to conduct situational appraisal for Lily Obrien, to ascertain with evidence whether or not the firm should enter the Chinese market, and to create a preliminary marketing plan. The situational analysis was done using SWOT analysis and the findings indicated that Lily Obrien’s source of strength exceeds its weaknesses whereas opportunities in the external environment are more compared to the threats. In this respect, the proposal for the Ireland-based company to internationalize in to the Chinese market was found to be economically viable. To pursue this strategic move, the report has suggested that the company should target middle-class Chinese consumers aged between 25 and 35 years. The company should also aim at realizing two marketing objectives that are related to increased sales volume and enhanced brand awareness to increase the market share. Finally, sales promotion, use of social media, and establishment of a Chinese website were identified as the major marketing strategies that have a great potential of making Lily Obrien strategic move feasible.         Contents Lily Obrien Entry to China. 8 1.0 Introduction Part I. 8 2.0 Cultural and Historical Discussion of China. 8 2.1      Geographical Setting. 8 2.2      Social Institutions. 9 2.3 Education. 10 2.4 Political System.. 11 2.5 Legal System.. 12 2.6 Social Organizations. 13 2.7  Business Customs and Practices. 13 2.8 Aesthetics. 14 3.0 Economic Analysis. 14 3.1 Background. 14 3.2 Population. 15 3.3 Economic Statistics and Activity A. Gross Domestic Product (GDP) 15 3.4 Income Aspects Among Chinese. 16 3.5 Transport System.. 17 3.6 Communication Systems. 17 3.7 Working Conditions. 17 3.8 Principal Industries. 18 3.9 Foreign Investment 18 3.10 International Trade Statistics. 19 3.11 Trade Restrictions. 19 3.12 Labor Force. 20 3.13 Developments in Science and Technology. 20 3.14 Channels of Distribution (Macro Analysis) 21 3.15 Media. 21 3.16 Conclusion. 22 2.0 Introduction Part II. 22 3.0 The Product 23 3.1 Relative Advantage. 23 3.2 Compatibility. 23 3.3 Complexity. 23 3.4 Trialability. 24 3.5 Observability. 24 3.6 Major Problems and Resistances to Product Acceptance Based on the Preceding Evaluation. 25 4.0 The Market 25 4.1 Geographical Region(s) 25 4.2 Forms of Transportation and Communication Available in That (those) Region(s) 26 4.3 Consumer Buying Habits. 26 4.3.1 Product-use Patterns. 26 4.3.2 Product Feature Preferences. 27 4.3.3 Shopping Habits. 27 4.4 Distribution of the Product 27 4.4.1 Typical Retail Outlets. 27 4.5 Advertising and Promotion. 27 4.5.1 Advertising Media Usually Used to Reach Your Target Market(s) 27 4.6 Pricing Strategy. 28 4.7 Compare and Contrast Your Product and the Competition’s Product(s) 28 4.7.1 Competitors’ Product(s) 28 4.7.2 Brand Name. 28 4.7.3 Competitors’ Prices. 29 4.8 Market Size. 29 4.9 Government Participation in the Marketplace. 30 5.0 Conclusion. 30 2.0 Introduction Part III. 30 3.0 A Situational Analysis for Lily Obrien Using SWOT Analysis. 31 3.1 Strength. 31 3.2 Weakness. 32 3.3 Opportunities. 33 3.4 Threats. 34 4.0 Assessing the Viability of Internationalizing to China. 35 5.0 Lily Obrien Entry to China: Market Plan. 36 5.1 Marketing Objectives. 36 5.2 The Target Market 36 5.3 Marketing strategies. 37 6.0 Conclusion. 38 4.0 Appendices. 39 5.0 References. 41        

Lily Obrien Entry to China

1.0 Introduction Part I

When it comes to food industries, chocolate and confectionery industry is indeed one of the most lucrative ones. For instance, according to Statista (n.d), the global retail sales for chocolate amount to approximately US$ 98.2 billion. As a result, due to revenue potential of this sector, it has attracted numerous companies, which range from small and medium enterprises to multinationals. Currently, some of the key chocolate manufacturers include Mars Inc, Nestle, Ferrero Rocher, and Mondelez International among others. However, for the purpose of this report, the focus will be put on Lily Obrien, the Ireland based company that manufactures luxurious chocolate. Surprisingly, the firm was established in 1992 by Mary Obrien in her small kitchen, and the products had been meant for personal consumption before she started to sell excess to family and friends. At the moment, the firm is gradually raising in the rank of the key chocolate brands with a projection of sales worth 50 million Euros expected to be realized by 2022 (lilyobriens.com, n.d). As the firm seeks to pursue further growth, this report proposes Lily Obrien market entry to China. A perfect alignment exists between the customers’ needs in the Chinese chocolate and confectionary industry and the Lily O’Brien’s selling position which in turn can facilitate the firm’s sustainable growth.

2.0 Cultural and Historical Discussion of China

2.1  Geographical Setting

Geographically, China is located in the Southeast along the Pacific Ocean coastal line. Notably, China is the third largest nation after Russia and Canada though it has a larger population compared to the two countries. Being situated in Asia and being a densely populated nation, Lily Obrien is going to benefit from a vast growing market. According to Financial Times (2017), the demand for chocolate in Asia was projected to increase by up to 4% by the end of 2018. Hence, by entering Chinese market, Lily Obrien will be well-positioned to address the increasing demand in the region. However, it is also paramount for Lily Obrien’s management to take into account the distance between Ireland and China and assess how it will potentially influence the company’s internationalization strategy. According to Lin & Chang (2017), geographical proximity of the home country and the host nation highly impacts the choice of market entry strategy among other critical aspects of internationalizing. Hence, Lily Obrien’s management ought to critically analyze the geographical location of China to understand all potential benefits and shortcomings and how they impact the firm’s international strategy.

2.2  Social Institutions

In China, family is undoubtedly the most valued social institution with blood ties being perceived as the cornerstone of the society. Notably, the Confucian culture, which to great extent is the shaper of the Chinese customs, has put in place numerous filial stipulati...