Report of Feasibility Study on Overseas Market Development of XX
Table of Contents
2. 引言 Introduction…………………..2
3.瑞士政治经济文化分析Political, economic and cultural analysis of Switzerland………………………………5
4.比利时政治经济文化分析Political, Economic and Cultural Analysis of Belgium……………………………………8
5.意大利政治经济文化分析Political, Economic and Cultural Analysis of Italy……………………………………….10
6.波兰政治经济文化分析Political, Economic and Cultural Analysis of Poland……………………………………13
7.四国投资环境对比Comparison of Investment Environment among Four Countries…………………………16
8. 市场进入对策 Market Entry Countermeasures……………………20
9. 结论 Conclusion…………………..22
As the currently leading retailer of high-quality natural ready-to-eat sandwiches in the UK, XX has developed to have about 374 stores with worldwide coverage in recent years. Despite the fact that most stores are based in the UK (especially in London), the number of overseas stores is on the rise. In this paper, the author analyzes and compares the economic environment, human characteristics, food culture and consumption level of Switzerland, Belgium, Italy and Poland from the international perspective and based on the development needs and corporate orientation of XX, thus finalizing the most potential overseas country in line with the market positioning for XX.
Key words: Overseas market, international marketing, XX management
XX餐厅于1986年在英国伦敦开设第一家门店，其创办人AA和BB是当年的同窗学友，因为两人同样渴望享受到简单而天然的食品，所以决意创新天地，以手工制作新鲜美食，并首创店内厨房，确保食品新鲜。餐厅里所有的食物都不是食品工厂里生产的工业化产品，而是当日在店内制作和供应的。每天清晨 5 点半， XX 的员工就开始为顾客准备全天的 食材，所以 XX 的三明治、沙拉和薄 饼卷虽然都有外包装，却没有保质期，也不添加防腐剂，追求天然且尽可能避免化学添加剂、防腐剂是 XX 一贯坚持的理念。因为XX在性质上属于跨国公司，其在全球其他国家开设有分店。时至今日，除了英国外，XX在美国、法国和香港都不断扩展，全球共有超过370余家分店。
Founded by AA and BB who are former classmates, XX restaurant set up its first store in London, UK in 1986. Inspired by the desire of enjoying simple and natural food, the founders were determined to innovate in making fresh food by hand and initiated in-store kitchen to ensure the freshness of food. All the food in the restaurant is not an industrial product from the food factory, but is made and supplied in the store on the same day. Every morning at 5:30 a.m., XX staff begins to prepare all-day food materials for customers, enabling the absence of shelf life and preservatives for XX sandwiches, salads and pancake rolls with outer packing, and embodying XX’s consistent philosophy of pursuing natural quality and minimizing the use of chemical additives and preservatives. As a multinational corporation in nature, XX has branches in other countries around the world. Today, in addition to developing the market in the UK, XX has expanded to and set foot in the United States, France and Hong Kong, with more than 370 branch stores worldwide.
Despite the absence of relevant literature, customer group of XX can be evidenced by the location of XX’s stores in Shanghai and Hong Kong, China. Last year, XX closed two stores situated in the prime locations of Shanghai Jing’ an Kerry Center and International Financial Center respectively, surrounded mainly by office buildings, resulting in high rent and indicating high cost of establishing branch stores in such two places. XX sets up branch stores near the office buildings in Shanghai, regardless of the high cost, implying that its initially intended customer group is not general public, but business people, white-collar workers and other groups. At present, XX has 27 stores in Hong Kong, China, mostly of which are located in transit stations and major shopping malls frequented by tourists. Most of these tourists know about XX and its business model as well as the ordering process, and are generally familiar with the taste and price of XX.
In 2001, McDonald’s, an American fast food restaurant, invested to hold shares in XX’s U.S. branch, but sold such shares in 2008. Relevant data shows that XX’s peers and rivals in Hong Kong include Pacific Coffee, Starbucks and Caffefee Habitu, based on which we can roughly infer XX’s competitors in the global market. McDonald’s sale of XX shares indicates that XX rivals with the catering giants such as McDonald’s, KFC and Burger King, in addition to competing with COSTA in the UK.
XX is oriented at middle and high-end market, but not low-end market, as evidenced by the fact that it is intended for customer groups such as business people and white-collar workers, and as reflected by its store locations in prime plots in Shanghai, adjacent to office areas of various large-scale enterprises.
Political, Economic and Cultural Analysis of Switzerland
Located in central Europe, the Swiss Confederation, or “Switzerland” for short, was independent under the Peace Treaty of Westphalia and became a truly sovereign state in 1684. In 1848, a new constitution was enacted, and the Swiss Federal Council was established, enabling Switzerland to become a unified federal state. Switzerland has pursued a policy of neutrality since 1815, maintained its neutrality during the two world wars, and has been a permanent neutralized state till now. Regardless of its nature as a permanent neutralized state, Switzerland is still actively involved in international affairs, for example, the international organizations such as the World Trade Organization and the International Red Cross are headquartered in Geneva, Switzerland. Currently, Switzerland features stable domestic political situation, powerful regime and harmonious society.
Switzerland is one of the most stable economies in the world, mainly reflected in policy, financial system and bank secrecy system, etc. The World Economic Outlook issued by the IMF in April 2019 showed that Switzerland’s gross DGP in 2018 was 703.8 billion US Dollars, with per capita GDP of 82,950 US Dollars, ranking second in the world. Switzerland is leading in Europe in economy considering gross and per capita GDP, and is also the home to many multinational corporations. Manufacturing industry is one of the most important industries in Switzerland, covering professional chemicals, medicine, precise instruments and other fields. Moreover, Switzerland has the lowest overall tax rate in the developed world. The low domestic tax, low cost of investment and high degree of internationalization create a good investment environment in Switzerland. Switzerland’s agricultural protection policy is a few exceptions to Switzerland’s free trade policy, which also gives rise to higher food prices. The OECD reports show that Switzerland’s market freedom is slightly less than that of some EU countries, but Switzerland’s domestic purchasing power is still leading in the world. The highly developed tourism industry is the third largest source of foreign exchange earnings in Switzerland.
Switzerland is rich in cultural and natural heritage, such as the well-known magnificent Alps, scattered alpine lakes, dense virgin forests, Old City of Berne, St. Gallen Abbey, Castle and Wall of Bellinzona, and the six cultural and natural heritages including Jungfrau, the Old City of Berne, the St. Gallen Abbey, and the Castle and Wall of Bellinzona, which are listed in the UNESCO World Heritage List. Switzerland’s official languages include German, French, Italian and Romansh, but exclude English. Because Switzerland is composed of four major language areas, it is naturally influenced by four different cultures in its diet, which enables certain compatibility with foreign food.
Political, Economic and Cultural Analysis of Belgium
The Kingdom of Belgium is abbreviated as “Belgium”, which implements the political system of “separation of the three powers”. Legislative, administrative and judicial powers are independent and counterbalanced. The King of Belgium is only the symbol of the country. Belgium enacted its first constitution in 1831 and a new one in 1994. Belgium, relying on the European Union in its foreign relations and focusing on European integration, implements active European policies. Belgium is different from Switzerland in dealing with foreign relations, for it does not pursue a policy of neutrality.
In 2017, Belgium’s gross GDP was about 482.7 billion US Dollars, and its per capita GDP was about 43,324 US Dollars, ranking about 20th in the world. Belgium is a developed capitalist industrial country with a high degree of external economic dependence. Belgium’s main industrial sectors cover iron and steel, machinery, non-ferrous metals, chemical engineering, textile and other industries, which are highly dependent on foreign countries. Belgium has developed service industry, with 80% of the working population engaged in services. Belgium is based on trade, so its exports account for a high proportion of GDP, which ranks among the top 20 in the world. The official languages of Belgium are Dutch, French and German. Like Switzerland, English is not the official language of Belgium. Belgium has a high proportion of religious population mainly believing in Catholicism. Belgium is a food kingdom and has long been famous in Europe. Although the Belgian dietary habits and the pursuit of health and nature are in line with the European food brand XX, Belgium’s local fast food chain Exki is also a fast food brand centering on the theme of health.
Political, Economic and Cultural Analysis of Italy
The Republic of Italy, or “Italy” for short, is a highly developed capitalist country like Britain. In 2018, Italy suffered from turbulent political scene, and witnessed another general election. Meanwhile, Euroscepticism runs high among Italy’s domestic parties, giving rise to the tide of sell-offs in Italian bond market, and leaving adverse effect on both the bond market and the stock market. Italy is one of the four major European economies and the founding member of the European Union. According to World Bank data, Italy’s gross GDP in 2017 was 1.9350 trillion US Dollars, with a per capita GDP of 31,953 US Dollars, and with the economic aggregate ranking 27th in the world and 4th in Europe. Italy depends on foreign countries for main energy and raw material supply, and its heavy industry sectors involve steel, shipbuilding, machinery, petroleum, chemical engineering, and munitions, etc. Italian artillery is the symbol of its developed heavy industry. Moreover, Italian SMEs play an important role in the economy, while Italian leather-making, shoe-making, textiles, clothing, furniture, tile, marble, wine and other industries are well known all over the world. Italy is also the world leader in fashion and art, as evidenced by the world famous Milan and Milano Moda Uomo as the barometer of fashion design and consumption in the world. Famous fashion brands such as Prada and Gucci make Italy a worldwide fashion leader. Therefore, Italy is a country with a high degree of openness, lessening foreign investment resistance in Italy.
Political, Economic and Cultural Analysis of Poland
The Republic of Poland, or “Poland” for short, is located in Central Europe, and is close to Eastern Europe geographically. Poland joined NATO in 1999 and the European Union in 2004. Although it is geographically close to Eastern Europe, it is actually a thorough Western coalition country. In terms of foreign relations, Poland has adopted an active European policy and actively engaged in European affairs. Poland is not a rich country in Europe. According to World Bank data, Poland’s gross GDP in 2017 was 524.8 billion US Dollars, with a per capita GDP of 13,414 US Dollars, ranking ninth in Europe. Although its GDP in Europe surpasses Belgium’s and approaches Switzerland’s, its per capita GDP lags far behind the latter two countries, which shows that Poland’s domestic consumer affordability is less than Switzerland, Belgium and Italy. Poland has maintained a stable political situation without much volatility since 1989, when the presidential and parliamentary system was implemented. Political stability means the security and stability of investment, thus being one of the important factors to be considered in investment. Polish mainly develops heavy industry, and has large domestic agricultural products export volume. For XX, the research object in this paper, abundant agricultural products mean low cost, which makes investment in Poland feasible from the perspective of cost control.
Potential Entry Country of XX
After analyzing the four countries above, the author considers Switzerland a most likely target country for XX for reasons as follows:
First of all, up to now, XX, founded in the UK, has set up branches in the United States, France and Hong Kong, China, with two branch stores in the mainland of China closed at the end of 2018. This paper argues that XX has set up stores in France in Western Europe, and it may be more reasonable to invest in setting up stores in Central Europe in terms of expanding its influence in Europe. To this end, it is more reasonable to set up stores in Switzerland from the geographical point of view.
Secondly, Switzerland has a high level of economic development and is one of the most developed countries worldwide, with its per capita GDP ranking second in the world. Thus, the general Swiss public can afford consumption in XX. From this point of view, Switzerland’s strong consumer capacity indicates broad market prospects in Switzerland. One of the most important factors for an enterprise to keep a foothold in the market is dependable market and reliable consumer group. Switzerland’s domestic market fully meets the investment needs of XX.
Thirdly, Switzerland has stable political environment and society, has a sound legal system, and maintains good external relations with various countries and international organizations. The stability of a country largely determines whether it can attract investment. Despite the good resource endowment in Syria, few multinational corporations would be willing to invest in the country at the moment. Soundness of legal system, perfection of legal system, and level of the rule of law will affect the decision of investors to a great extent. The openness degree of a country also determines whether it can attract effective investment. Switzerland has a high level of openness as evidenced by its numerous multinational corporations and international organizations. Moreover, Switzerland’s policy of permanent neutrality makes it seldom influenced by foreign policies of other countries. Therefore, Switzerland’s peaceful social environment makes it the best choice for investment of XX.
Fourthly, Switzerland is home to the headquarters and branches of many multinational corporations and international organizations, suitable for XX as a multinational corporation in nature. As the home to headquarters and branches of multinational corporations, Switzerland has formed a kind of agglomeration effect to a certain extent. This will make consumers psychologically feel that XX can set up stores and branches in Switzerland due to its excellent service ability and level. Moreover, the staff of multinational corporations and international organizations is business people or white-collar workers, which is in line with the customer groups and market positioning of XX. This kind of customer group often has a great influence in society; XX can win their praise with its excellent service ability, thus achieving the invisible propaganda by advertising XX with the influence of such consumer group. Transnational corporations and international organizations can promote economic and cultural exchanges between countries, but it is their staff who undertakes this responsibility. The existence of these people enables XX to use their power to publicize itself.
Fifthly, Switzerland’s perfect financial system and bank secrecy system make XX take less financial risks in Switzerland. For long-term development of XX in Switzerland, the support of the financial system is a necessity. As a multinational company, XX’s strategy should be global rather than individual country-specific. So, the business in Switzerland should be independent to a certain degree, thus enabling this part of business to rely on Switzerland’s financial system and banking system to achieve financing.
Sixthly, Britain and Switzerland are both European countries, thus they have similar dietary habits. For example, both countries have pasta as their staple food and pursue a healthy diet and life style. XX recipes include sandwiches, pottage, French bread, salad, fruit juice, milk tea and shakes, which are in line with the taste of Swiss people. The similarities between the two countries can reduce the resistance when XX enters the Switzerland market.
Market Entry Countermeasures
In this paper, the author believes that XX should adopt the franchising mode to set foot in the Switzerland market. Franchising refers to a variation of license trade, in which the franchisor transfers the whole operating system or service system to an independent operator, who pays a certain amount of royalties. Franchising can be divided into four types: unit by unit franchising, area development franchising, sub-franchising and master franchising. In order to realize XX’s fast access to Switzerland market, the author advises to adopt master franchising. Master franchising means that the franchisor authorizes the franchisee to recruit franchisees. As an agency service institution of the franchisor, the franchisee recruits the franchisee on behalf of the franchisor and provides guidance, training, consultation, supervision and support to the franchisee. The master franchising grants enough power to the franchisee, which is mainly reflected in the management power. The franchisee has the right to decide whether to set up a branch, where to set up a branch and how many branches to set up, which thereby stimulates the franchisee’s vitality, flexible operation and achieves the goal of quickly occupying the market.
When XX enters the Switzerland market, it should pay attention to the actual situation of Switzerland and adapt itself to local conditions. As a multinational company engaged in catering industry, it is necessary to combine with the customs of the locals and the food culture. Just like KFC and McDonald’s when they first entered the Chinese market, McDonald’s misjudged the dietary habits of Chinese people after the survey, and finally fell behind KFC. Therefore, this paper argues that XX should adopt the correct mode of business operation when entering the Switzerland market.
Britain and Switzerland are both European countries with similar dietary habits. For example, both countries have pasta as their staple food and pursue a healthy diet and life style. XX recipes include sandwiches, pottage, French bread, salad, fruit juice, milk tea and shakes, which are in line with the taste of Swiss people. The similarities between these two countries can reduce the resistance when XX enters the Switzerland market. Switzerland features a high level of national GDP, the highest per capita income in the world, a very low unemployment rate, and a strong national purchasing power, meeting the conditions for the target consumers of XX. Switzerland has a highly-developed tourism industry, most of its tourists know about XX and its business model, as well as the ordering process, and they are generally familiar with the taste and price of XX. Besides, Switzerland’s agricultural production value accounts for about 4% of GDP, with meat, dairy products and other crops achieving basic self-sufficiency or self-sufficiency with a surplus domestically. However, the local agricultural protection policy results in high food prices, which will have a certain impact on raw materials cost control of XX.
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