Pestle Marketing Analysis Of China Example Essay Example

can lead to cost reduction and provide opportunities for advertising on social media platforms and the internet. The Boston Consulting Group predicts that China's online shopping industry will expand fourfold by 2015, emphasizing the need for proactive planning and development of both short-term and long-term strategies.

One significant part of Chinese culture in the PESTEL analysis of China business is the requirement and expectation for in-person contact to establish trust, linked to the concept of Individualism-collectivism where Chinese culture is considered highly collective (Hefted 1997). Currently, the environmental conditions in China's PESTEL analysis are critical, with frequent air pollution in major cities, resulting in health concerns.

China heavily depends on coal for its industrial processes, resulting in significant acid rain. Another factor is the varying weather conditions across regions. Consequently, when Barberry expands into China, it will need to cater to specific products for each region, unlike in Europe. Nonetheless, in recent years, this issue has been particularly noticeable in motorized vehicles and factories.

Despite the low focus and priority given to environmental protection work in the PESTEL analysis of China, mainly due to the emphasis on poverty alleviation and economic development, resulting in low public participation, the Chinese government has recently begun to educate the public about environmental protection. The substantial economic advancement and improved living standards, as well as the degradation of the environment, have prompted this action. Furthermore, by using Hypotheses 5 Dimensional Cultural Model, we can gain a comprehensive understanding of the deep drivers in the PESTEL analysis of Chinese culture compared to cultures worldwide. The accompanying graph from the Hefted Centre illustrates each dimension and its global impact. According to

Greet Hefted (1980), culture is described as a source of conflict rather than synergy, with cultural differences often being a nuisance or even a disaster. Justine Paul (2011) supports this perspective, suggesting that there is an innate instinct that all human beings are fundamentally the same.

Therefore, if one enters a foreign country and makes decisions based on how they operate in their own country, it is likely that they will make poor decisions (Paul 2011). Hence, it is crucial to understand various factors to ensure both you and your business can easily adapt to cultural or environmental changes. This can be illustrated by numerous examples of successful and failed business setups, all attributed to a lack of understanding of CM. Power Distance is a dimension that addresses the fact that individuals in societies are not equal, reflecting the culture's attitude towards these inequalities.

At 80, China is ranked high in power distance, a society that accepts inequalities among people, resulting in the popularization of subordinate-superior relationships and no defense against power abuse by superiors. Individuals are influenced by formal authority and sanctions and generally have optimism regarding people's leadership and initiative abilities. People should not aspire beyond their rank. Scoring 20 in a pestel analysis, China is a highly collectivist culture where people prioritize the interests of the group over their own. In-group considerations impact hiring and promotions, with closer in-groups (such as family) receiving preferential treatment.

Employee commitment to the organization may not extend to the people in the groups they are cold or even hostile to out-groups. Personal relationships take precedence over task and company loyalty. In collectivist cultures like China, there is

a shared verbal goal that fosters collaborative efforts towards its achievement. However, businesses attempting to establish themselves in individualistic cultures may face challenges in adapting, as they may not receive the same level of support typically provided. In such cases, independence and risk-taking abilities become crucial skills, which require time and training for successful acquisition.

In individualistic cultures, it is important for businesses to understand that workers prefer to keep their work life and private life separate. However, in collectivist cultures, there is no such division (Bondman, 2007). This distinction will impact the marketing mix in various ways. To analyze this, we can deconstruct the components of the marketing mix: Price, Product, Promotion, and Place.

Price: Barberry must maintain a prestigious image, which requires setting its prices reasonably high to reflect the quality of its products. In a culture like China, where raw materials are inexpensive, they may allow limited discounting. However, Barberry does not allow such practices within its own culture.

Product: Barberry offers a diverse range of products, including items for women, men, seasonal products, cosmetics, and beauty-related items.

However, in a male-dominated society like China, it would be wise to explore alternative marketing and advertising strategies to appeal to women. Additionally, it is important to ship the right products to cater to this specific market niche.

When analyzing the pestel analysis of China, the company must determine if relying heavily on technological advertising and integration, rather than traditional mediums like television and newspapers, is the right approach to reach consumers.

The placement of stores plays a crucial role in maximizing revenue. Certain regions in China have consumers who can

afford expensive clothing. Questions that should be considered include whether to open a flagship store or start with a small pop-up or concession store and gradually expand from there (Martin, 2012).

Based on the results shown in the Hypotheses graph, future recommendations could include:

• Power Distance: Utilize teamwork to involve more individuals in the decision-making process.
• Individualism: Recognize accomplishments and encourage debate and expression of ideas, while still respecting culture and traditions and implementing change gradually.
• Masculinity: Ensure job designs and practices are gender-neutral and treat men and women equally.

Uncertainty Avoidance: To prevent confusion, it is important to clearly establish expectations and boundaries. Early planning, preparation, and effective communication are necessary. Additionally, expressing emotions through physical actions like gestures and hand motions is commonly practiced in the East. The managing styles of the Western and Eastern cultures differ in various ways, as outlined in the table below.

The text highlights key characteristics of different management approaches, while also emphasizing the importance of strategic planning and the use of management information systems. The first management approach mentioned is described as open, direct, and valuing seniority and family ties. It is also characterized as more flexible, creative, and paternalistic, supporting lifetime employment and opposing hire and fire practices. This approach prioritizes productivity and corporate loyalty, while also valuing individual initiative. However, it is noted that this approach tends to be resistant to women assuming positions of power.

The text then transitions to discussing the importance of global marketing for companies and the role of management information systems in achieving this. The use of a management information system provides a continuous flow

of information about company operations, helping managers and decision-makers make informed choices.

The text concludes by highlighting the benefits of strategic planning. Strategic planning is portrayed as a logical and analytical process for determining a company's future positions in relation to the environment. Planning ahead proactively enables companies to explore both old and new markets, with a specific example being the potential for Barberry to conduct a pestel analysis of China and tap into new market segments while also paving the way in existing markets.

Additionally, due to its systematic analysis process, Barberry provides a clear statement of objectives and policies, enabling decisive action when necessary. By identifying products or services that can be offered in each market, Barberry can determine if the quality standards in China match those in Europe. This proactive approach allows for short-term actions and the implementation of a long-term integrated strategy, which aligns with the PESTEL analysis of Chinese culture and western work practices. One prevalent flaw among entrepreneurs is myopia, a tendency to lack long-term perspective in thinking or planning.

Henry Mentoring states that successful strategic decision making requires looking into the future and being willing to learn from experience (Mentoring, 2002). This means that if one part of the plan fails, one should not give up, but instead go back to the drawing board and try again. Starting a new venture requires a collective understanding of its goals and strategic planning helps in this learning process. However, entrepreneurs should not wait until they face competition before planning (Price, 2002). Below are two models by Kettle (1988) that depict a basic Marketing information System.

Internal company information:

2) Marketing intelligence

can be obtained from suppliers, customers, and distributors. It is possible to purchase intelligence information from external suppliers who have established data gathering systems specifically designed to support profitable commercial intelligence products that can be sold to all participants in a market.

3) Market research is necessary for management because they cannot always rely on internal sources for information. Additionally, market intelligence sources may not always provide relevant or up-to-date information, especially for smaller or niche market segments. Therefore, businesses often need to conduct specific studies to support their marketing strategy.

Barberry could construct and assemble their own search method for analyzing China and potential regions, which can include surveys conducted during the PESTEL analysis. They can also utilize past demographics and existing data to make informed conclusions. A marketing information system consists of four components: the internal reporting system, the marketing research systems, the marketing intelligence system, and marketing models. Internal reports encompass orders received, inventory records, and sales invoices. Marketing research involves purposeful studies, either ad hoc or continuous. On the other hand, marketing intelligence is less specific in its objectives and is commonly carried out informally by managers themselves rather than professional marketing researchers (Kettle, 1988).

Barberry obtains 60% of its raw materials from Europe, creating the opportunity to establish a strong bond with a culturally similar country. Such a relationship could lead to the acquisition of affordable materials, ultimately resulting in increased profit margins. From an economic perspective, fluctuations in economic activity have a significant impact. During periods of prosperity, businesses thrive and generate substantial profits. Conversely, recessions like the recent one have led to numerous business closures. These circumstances

influence companies to consider taking risks in expansion and investment when favorable conditions arise. Additionally, government changes can include low tax rates and interest rates, as well as rising wages.

The fashion industry is significantly influenced by social factors such as cultural demographics, behavior, preferences, and lifestyle. It is vital for businesses to stay updated on changing consumer trends in order to succeed. Additionally, culture plays a crucial role, particularly in relation to an aging population. To effectively plan for the future, businesses need a comprehensive understanding of the socio-cultural aspects of different countries or cultures.

Conversely, technological advancements are rapidly revolutionizing the fashion industry. In China specifically, technology has become more affordable and has resulted in faster communication and the introduction of new software. This ultimately leads to cost reduction and improved services.

To gain a competitive edge, organizations must stay connected with the evolving field of genealogy. In China's fashion industry, consumer awareness is high and there is significant concern about CO emissions during manufacturing and packaging processes. Moreover, due to varying climates across different regions in China, stores need to carefully choose products for each location. Additionally, clean energy and low carbon technology hold importance in China as it aims to reduce dependence on coal for production.