INTERNATIONAL BUSINESS

International Business



International Business

Company Background:

John Lewis Partnership (JLP) is a leading retailer in the UK, operating supermarkets and department stores. JLP operates 27 John Lewis department stores, 213 Waitrose supermarkets, an online shopping network, a website and a catalogues business, and Greenbee.com. The company operates in the UK. John Lewis typically stocks more than 350,000 separate lines of products such as furniture, kitchenware and clothing items.

Missions of JPL

The main mission of JPL would be to expand its market size. The long term goal of JPL is to launch and maintain a website, www.johnlewis.com, which stocks more than 45,000 product lines focused on household products and giftware. The medium term goal of JLP has to develop an online shopping service, John Lewis Direct, which will own about 25% of Internet grocer Ocado. The short term goal of JPL is to combine Waitrose for the convenience of a supermarket with the expertise and service of a specialist shop (Daniels & Radebaugh 2007, pp. 76).

Key products for Market Entry:

The key products of JPL to enter the market are furniture, kitchenware and clothing items. These products associated with the firm's market expansion strategy.

The aim of this report is to explore the advantages and disadvantages of FDI in China. PEST analysis is used for analyzing the economy of China. Moreover, the strategy for John Lewis to play in China's economy is also described.

Rational For Choosing China

International Market Opportunity in China

Market Size

Since 2002, the retail sector are looking for international expansion to slow growth, heavy discounting and the fickleness of consumer market developed due to the recession. The progressive adaptation of Chinese consumers' new selling formats, the more similar to Westerners, joined the growing urbanization of the population and expanding middle classes are primarily responsible for the attractiveness of this market.

Economic Growth

In 2009 GDP grew by 8.7% and in 2010 is expected to exceed 10%. A retail sale in 2009 increased by 8.2% and the forecast for this year is to be increased above 9%. The index of consumer confidence soars and Chinese demand for luxury products is consolidated. Several studies predict that by 2015 China will be the first market for these products (Joshi 2009, pp. 54).

Market Intensity

The hypermarket format is the fastest growing in the last year, especially for packaged goods, and supermarkets, dominated by local chains are those that capture greater market share. Convenience stores also are consolidated, while supermarkets have trouble growing (Travis 2007, pp. 212).

Political, Industrial and Institutional Policies

Looking forward to be assessed some risks such as rising labor, rising inflation, the housing bubble, the pressure to keep revaluing the yuan and the loss of competitiveness of Chinese exports policies to other neighboring as Vietnam. Moreover, despite the huge investment by the Chinese government, there remains a serious shortage of infrastructure such causes only 15% of fresh produce transported in refrigerated vehicles, causing significant losses (Ball et al. 2004, pp. 121).

PEST Analysis for China

Political Factors

Law (Competition): The recent expansion in the retailers can affect JLP ...