Report on the Dairy product Food in china

Summary of Dairy product Food in china

Consumption of dairy products in china have been increase in past couple of years especially in urban areas. It has been calculated that the milk output has been increased from less than 1kg in 1970 to now more than 7 kg in 2000. Dairy industries in china has also been expanded in order to meet the growing demands. UHT milk demands have gained a lot of attraction among the global population from past couple of years. The main reason is the longer and extended shelf life. High temperature is given to the processed milk which is then called as ultra-high temperature milk. Chine has been a main consumer who use the UHT milk from past few years. There are certain factors that UHT milk market in china which also include their poor chain maintenance. The UHT milk is able to get stored under room temperature without catching up the bacterial growth. This is the reason that much population is attracted toward getting them especially from no refrigerator facility area and hostels. Strong economic growth can be achieved by increasing the UHT milk production. Because of the increase in urbanization there is a lot increase in consuming dairy goods. The increasing rate of growth in UHT milk that is imported is seen as a subset of the growth in Chinese dairy industries from m last couple of years. Doing Pestel analysis can give a great detail on active challenges of china dairy corporation limited. Like it may be possible that industry is profitable with high growth trajectory but it might not be better for china dairy corporation limited if it is in unstable political environment. The terminology of internationalization is quite similar in meaning and definition depending on the scenario they involve. By most of the intellectuals of this category some of them elaborate or define internationalization as the series of steps by which organization take a surge in their campaign of awareness of the connected and non-connected influences of international transactions on their long term and well settled and conduct form of transactions with multiple countries. SME terminology is connected to firms in all area of business as long as they don’t surpass a limit of particular size in turn over or assets. Researchers identify a number of pin points which involves profits, total capital income, position in the market, number of employees working in the firm and turnover in the context of describing the total capacity of SMEs.

Introduction of Dairy product Food in china:

Because of various preferences in dietary and taste, the use of dairy products by maximum population of china has been very minimal. But from last two decades, it has been seen that average income of the consumers have been increased and people are more exposed to the western culture in china, so the consumption of dairy products in china is being on increase. Consumption of dairy products in china have been increase in past couple of years especially in urban areas. It has been calculated that the milk output has been increased from less than 1kg in 1970 to now more than 7 kg in 2000. Dairy industries in china has also been expanded in order to meet the growing demands. Total milk production has been increased to 9 million tons in 2000. Even the Chinese government has started to focus on spreading awareness of importance of dairy products consumption because of the increasing health benefits. But still even after all this advancement, china has just few small-scale producers because of less development in processing and marketing techniques of the companies.

In order to start the process of internationalization by a firm something or someone needs to initiate the idea or the energy that factor can either be from outside or inside.

The intention of an organization internationalization is pushed and influenced by the number of opportunities he finds in the foreign soil for its product. These sorts of options are stimuli in only on the context if the organization has the capacity to get itself involve in the market. There can be two areas in order to determine why SMEs have been working in the path to acquire the status of internationalization.

UHT milk demands have gained a lot of attraction among the global population from past couple of years. The main reason is the longer and extended shelf life. High temperature is given to the processed milk which is then called as ultra-high temperature milk. Chine has been a main consumer who use the UHT milk from past few years. Many vendors are trying to make their position strong in market. Major population form especially low economic state has been attracted to the lower prices of the new attracting products. This act is opening new door to the market growth in china.

Growth dynamics of Dairy product Food in china:

Because of various preferences in dietary and taste, the use of dairy products by maximum population of china has been very minimal. But from last two decades, it has been seen that average income of the consumers have been increased and people are more exposed to the western culture in china, so the consumption of dairy products in china is being on increase. Consumption of dairy products in china have been increase in past couple of years especially in urban areas. It has been calculated that the milk output has been increased from less than 1kg in 1970 to now more than 7 kg in 2000. There are certain factors that UHT milk market in china which also include their poor chain maintenance. The UHT milk is able to get stored under room temperature without catching up the bacterial growth. This is the reason that much population is attracted toward getting them especially from no refrigerator facility area and hostels.

Competitive analysis of Dairy product Food in china:

For the development f UHT market many initiatives have been taken from government and private sectors. The organization named Kerala cooperative Milk Marketing Federation (Milma) has driven a new factory for UHT milk production.

·         Parmalat S.p.A

·         Dairy Partners Americas Brasil Ltda

·         DMK Deutsches Milchkontor GmbH

·         Unternehmensgruppe Theo Müller GmbH & Co. KG

·         S.A.B. de C.V.

·         Candia

·         Grupo Lala

Business drivers of Dairy product Food in china:

Strong economic growth can be achieved by increasing the UHT milk production. Because of the increase in urbanization there is a lot increase in consuming dairy goods. The increasing rate of growth in UHT milk that is imported is seen as a subset of the growth in Chinese dairy industries from m last couple of years. There are 9 key economic and structural drivers.

1.      Raising per capital income

2.      Increase freedom in commercial and economics

3.      Advancement in national transportation infrastructure

4.      Rapid urbanization

5.      Strong growth of economy in china

6.      Wealthy second tier cities in china

7.      Western culture in diet

8.      Western food service operator’s introduction

9.      Modern supermarket retailing

PESTEL analysis of Dairy product Food in china:

Doing Pestel analysis can give a great detail on active challenges of china dairy corporation limited. Like it may be possible that industry is profitable with high growth trajectory but it might not be better for china dairy corporation limited if it is in unstable political environment

Political factors of Dairy product Food in china:

Political factors play a major role in growth of market of UHT milk in china.

·         Risk of military inclusion

·         Level of corruption

·         Bureaucracy in food and beverages by government

·         Contract enforcement

·         Favored trading partners

·         Antitrust laws related to food

·         Taxation

·         Pricing regulation

·         Wage legislation

·         Mandatory employee benefits

·         Industry safety regulation

·         Product labeling and other needs

Economic factors of Dairy product Food in china:

The economic factors that can be included while doing the Pestel analysis for the UHT milk factory could be following;

·         Efficiency and betterment of financial market

·         Comparative advantages

·         Skill level of workforce

·         Education level of the economic departments

·         Labor cost

·         Productivity

·         Growth rate of the economy

·         Discretionary income

·         Exchange rate and stability

·         Government inclusion in market

·         Type of economic system in country

·         Interest rates

·         Inflation rate

·         Unemployment and employment rate

Social factors of Dairy product Food in china:

The culture of the organization gets highly effected by the culture of the society and the methods of doing things. How the marketers will play their role depend greatly on their shared beliefs and attitude.

·         Hierarchy, power structure and class structure of the society

·         Education level and standards

·         Entrepreneurial sport

·         Broader nature

·         Leisure interests

·         Attitudes and behaviors

·         Demographics

·         Skill level of the people

Technological factors of Dairy product Food in china:

From couple of years the industry has been developing in technology very fast. Technology change every minute in every state. So, the firm should work according to the advancement in technology of the modern world

·         Recent technology development in country

·         Impacts on cost structure f the industry

·         Product offering and technology impact

·         Effect on value chain structure

Environmental analysis of Dairy product Food in china:

Environmental standards vary with the company which have direct impact on the profit of the company in those markets.

·         Climate changes

·         Weather

·         Recycling

·         Environmental pollution laws

·         Waste management

·         Endangered species

·         Behaver toward green

·         Attitude toward renewable energy

·         Air and water pollution

Legal factors of Dairy product Food in china:

the legal framework and institutions are not robust enough to protect the intellectual property rights of an organization.

·         Antitrust law in food

·         Law of discrimination

·         Copyright law

·          Intellectual and property law

·         Data protection

·         Health safety law

·         Employment law

Internationalization of Dairy product Food in china

From a reference from the historical perspective, the idea of internationalization of businesses and organizations started with the ability of mankind to go across the seas and borders. Scholars and literature have taken a chance to elaborate internationalization on multiple venues with the help of many types of perspectives and methodologies. The terminology of internationalization is quite similar in meaning and definition depending on the scenario they involve. By most of the intellectuals of this category some of them elaborate or define internationalization as the series of steps by which organization take a surge in their campaign of awareness of the connected and non-connected influences of international transactions on their long term and well settled and conduct form of transactions with multiple countries. Further, Calof and Beamish described internationalization as “the method of adapting firms’ operations (strategy, structure, resource, etc.) to international environments”.

Strategy of Dairy product Food in china

Strategy is defined as the set of steps taken with determination for achieving basic long-term goals for the organization or enterprise, and the adoption of the procedural actions and the distribution of its resources which are critical for the purpose of achieving those goals on planned time. All these phenomena are designed with integrated decisions, plans or set of steps that will give assistance in the pursuit of achieving goals. It is further termed as an umbrella to describe a wider spectrum of options related to strategic operations which are under consideration of the firm, it further involves both functional management and organizational strategies, market and product strategies and strategy of diversification.

SMEs of Dairy product Food in china

The methodology and idea of small and medium enterprise mostly called as SME involves many connotations among people who have researched regarding it and they apply approach connected to quantitative methodology which helps them to identify SMEs. SME terminology is connected to firms in all area of business as long as they don’t surpass a limit of particular size in turn over or assets. Researchers identify a number of pin points which involves profits, total capital income, position in the market, number of employees working in the firm and turnover in the context of describing the total capacity of SMEs. However, the formula of number of people working in the company and the total income of the company are mostly considered as the most adequate criteria. The intention of an organization internationalization is pushed and influenced by the number of opportunities he finds in the foreign soil for its product. These sorts of options are stimuli in only on the context if the organization has the capacity to get itself involve in the market. There can be two areas in order to determine why SMEs have been working in the path to acquire the status of internationalization.  For our context we find ourselves comfortable using the elaboration provided by the European commission which states.

Characteristics of SMEs of Dairy product Food in china

Hollensen (2001) explains some of the characteristics of SMEs as follows:

The characteristics of SMEs are as follow according to Hollensen

a.       Organization:  the employee working in SME can easily access to the entrepreneur/owner and managers because of a smaller number of employments hence they are easily influenced by witnessing their actions  

b.       Risk taking:  this situation is most likely to occur where the ongoing of the organization may be threatened, or where major competition among other companies is undermining their activities. By not having same amount experience or information about foreign markets, the entrepreneur or management team take risk on decision making.

c.       Flexibility:   the experience of coordination among customers and SMEs gives them the leverage to respond faster and provide more flexibility according to the needs of customer

SMEs’ motives for Internationalization of Dairy product Food in china

We can find multiple types of motives under the internationalization of SMEs which is pointing towards a diversified approach connected to internationalization. Among them the most commonly used motive is to acquire access to new and bigger markets for the purpose of achieving growth. Firms expand the market because of their products by the process of creating subsidiaries and handling exports with joint companies in abroad countries. Many organizations go global to acquire position in order to understand the process of technology and marketing for the purpose of remaining in the market by possessing competition. This further shows that many types of process regarding internationalization are operated by companies to achieve strategic goals for their company. In order to start the process of internationalization by a firm something or someone needs to initiate the idea or the energy that factor can either be from outside or inside.

The intention of an organization internationalization is pushed and influenced by the number of opportunities he finds in the foreign soil for its product. These sorts of options are stimuli in only on the context if the organization has the capacity to get itself involve in the market. There can be two areas in order to determine why SMEs have been working in the path to acquire the status of internationalization. Firms are in a position to accept internal or external stimuli in the making of decision in initiating exports in which both the major factors of internal qualities and environment play a critical role.

Proactive factors of Dairy product Food in china

Proactive factors show that the selection a firm has to internationalize is forced by factors of internal means which involves interest in creative ideas and major competences, also the chances and the space which is offered by foreign markets. The team who are managing this process has the desire, drive, commitment for the market and motivation within. Firms are in a position to accept internal or external stimuli in the making of decision in initiating exports in which both the major factors of internal qualities and environment play a critical role. Firms expand the market because of their products by the process of creating subsidiaries and handling exports with joint companies in abroad countries. Many organizations go global to acquire position in order to understand the process of technology and marketing for the purpose of remaining in the market by possessing competition. This further shows that many types of process regarding internationalization are operated by companies to achieve strategic goals for their company. In order to start the process of internationalization by a firm something or someone needs to initiate the idea or the energy that factor can either be from outside or inside.

THE ESSENCE OF CSR of Dairy product Food in china

The idea of Corporate Social Responsibility (CSR) has been disseminated in a wide framework from the early 90s century. CSR is also described as a ‘new global way of change in strategic management organizations, which entitles the company to sustainable processing while acknowledging the principles of economics, ecology and ethics.

The above description of CSR are pointers of its interdisciplinary nature of interests which involves sociology, ethics, economics, philosophy and management science. CSR analyzes the complete

business connection with all market entities, focusing mostly their ethical broadness. The growing involvement in contemporary business social responsibility is the outcome of the following constraints.

(Adamczyk, 2009) of Dairy product Food in china: −

A hike in social requirements which have resulted from the inability of the situation of organization to look after basic social needs which includes both social and environmental. The technique of economic wandering and expectations of business transparency in a progressive manner:

Enabling for all aspects of business aspects that shows accepted legal and moral framework is the key to the search of a modern institution in a changing environment. Which is pointing solely on the company’s possible profit outcome which mostly raises a number of adverse situations such as unfair competitive race, human described standards of business setup and environmental handling. In the time of globalization and the increasing coemption rivalry, the process of CSR turns out to be important factor in the code of modern organizations, both domestic and foreign. The extraction on unethical behavior and undergoing the project in the area of social activities to enhance the image of organization on the market increases the reliability in such organizations

It is worth discussing that a key feature of a learning organization is a socially responsible organization, providing the requirements of the public entities and ready for difference, not just to maximize its income but also to involve some entities to the surrounding environment.

Cultural differences of Dairy product Food in china:

When the companies are expanding across the boarders and to the global market because they are becoming more approachable to small and local businesses and thus bringing more chances for the work internationally.

Culture is simply a set of common norms that are acceptable by the society and the people living in that society. But in the context of international business, whatever acceptable by the professionals form one country can differ from the one that they ae working overseas. Culture can affect the international business by three main areas which are etiquettes, communication and hierarchy of the organization. Understanding these concepts can help the professionals to avoid the misunderstandings with the overseas colleagues and customers form the other countries and, in this way, it will become easy to expand the international business.

Communication – for the success of any business ventures. It is very much crucial to have the command on effective communication skills. And it is very critical when there is high risk if losing the meaning of your message in translation. English is the basic language in many businesses. But more than the language that matters the most is the way you convey your message through your words which is very important.

Etiquettes – when dealing with the colleagues overseas it is very much important that how you address the them. Like maybe be you prefer to call them with their surnames or titles or may be the first name is acceptable enough. For example, the punctuality can also differ from culture to culture in an environment of international business. And there is also difference in behavior toward certain things like rules and regulations and work hours. Maybe someone consider that working for long hours in the sign of commitment.

Organizational hierarchy – the organizational hierarchy can vary form culture to culture. Maybe sometimes there is only junior or middle management team who will feel comfortable in specking up in the meeting or questioning the decision of the senior manager. These attitudes are actually reflecting the values of the respective country that the professional is representing. The hierarchy of the organization help to define the rules and regulations of the organization.

References of Dairy product Food in china:

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