Business Expansion Plan

[Name of the Institute]

Business Expansion Plan

Company Overview

In this paper, we will consider the present scenario of U.S. Auto-Parts and its expansion plan for the future. Currently the company has a major national and international share in auto parts industry, so much so that it currently holds 5% market share worldwide. However, there are still possibilities of expansion of business in the global market. There are a number of factors which should be considered in this regards and, therefore, it is important to establish an applicable strategic business plan for the development of the business. The company also plans to expand it profit margin and clarity of total profits to 5%. For this purpose, my task is to develop an applicable strategic business plan for the next four years. I have selected Chinese market for planned international expansion target of the company (Barca, 2005). China has a lucrative history of developing auto parts, which are distributed worldwide. This plans aim to control a significant market share in auto parts industry of China. However, it is important to first analyze the current industry position, and then incorporate a strategic business plan.

PEST Analysis

Political Factors

Political stability is one of the most contributing factors in the development of the country's economy. Since the revolution, the economy has been witnessing a profitable growth of double figures consistently. This growth is attributed mostly to the privatization of the state owned companies as those companies were able to generate good results and earn huge revenues for the country. In the 1990s, it also integrated with Japan, South Korea and other countries which assisted China to become a super economic power. Political conditions and legal requirement for starting a business in China are comparatively simpler than most of the countries in Asia.

Economic Factors

When economies are facing a difficult situation in recession around the world, Chinese Economy is expanding by double digit. The Chinese currency, Yuan has been appreciating, benefiting the economy. It will also create problems for countries such as America, as the trade deficit of America has been increasing due to being a major trading partner of China. The trade surplus of China declined to $20 billion in August 2010, compared with $28.7 Billion last year. The decline in the trade surplus is attributed to a significant increase in the imports of the country. The imports of the country increased to $119.2 billion. The exports continued to grow by 34%. China has a nominal GDP of $5.93 trillion, and it is the second largest economy of the world after America. The major exports of China include Machinery and Equipment, Garments and accessories, and High Tech Products (David, 2007).

Social Factors

Social factors include the local culture, traditions, values and unwritten norms that are present and prevalent in the country. China is rich in its traditional and cultural values. It can be said that when you are in China as a guest they will treat you with greatest hospitality, but when you plan to live there permanently you have to ...