Develop a well supported suggestion for an international market entry Essay

Develop a well supported suggestion for an international market entry strategy for a company (MNE) of your choice. Support the a - Essay Example There are a number of factors that has influenced the firm to opt for internationalization. These factors include both pull and push factors. The push factors include the saturated local market, matured economy, high capital gain from the local market (UK market). The pull factors would include the degree of foreign market attractiveness, opportunity for quality production at a relatively low cost and the opportunity to attain economies of scale. Hereby it is to be added that all the pull factors have been mentioned by keeping China in the focal point of interest as the country is the target market. The details would be provided in the latter half of the study (Czinzota, Ronkainen, Moffett, Marinova and Marinov, 2009, pp. 423-429). Justifying the choice of the host country PESTEL Analysis Political Factors: During the early 80’s China had a closed economic policy and there was very little encouragement on the part of the government in terms of the investments to be made by the international companies. But things changed as the government focused on the educational policies which lead to an increase in number of the skilled workers in the country. But, there were not enough job opportunities for the skilled workers (Henry, 2008, p. 89). ... As far as retail industry is concerned, the government is looking to shut down the traditional wet shops to promote organized retailing (Kolb, 2008, p. 92). The main objective is to create a network of chain of retail markets in the eastern provinces of the country. The efforts of the government are also paying off as retail has become of the most important industries in the country. As on 2009, the country had total of thirty five retailers out of the top fifty retailers in the world. The ministry of commerce provided approval to more than one thousand retailers in the country with a contractual FDI of $1.9 billion in the year 2005 (Brown, 2009, p. 209). Economic Factors: Due to the new revised policies the country witnessed a rise in the GDP. The GDP in the year 2009 was 335,353 million. This meant that there had been a 7% rise as compared to the last year. Another noticeable factor has been the per capita rise in the net income of the rural households of the country which was 5153 Yuan at the end of 2009. This meant an overall 8.5% increase. The rise in the per capita income acted as the boost towards disposable income of the people which witnessed a percentage growth by 9.8%. It clearly shows the fast paced economic progress of the country. Social Factors: Tesco’s the main focal point in the social factors would be the cross cultural difference of the people of the country. The Chinese culture is diverse and is totally different from that of the Western culture. However the shifts in the economy of the country led to a rise in the disposable income of the people of the country and as a result the mindset and the lifestyle of the people improved. The shift in the consumer behavior is a welcoming sign for the