Abstract
The Chinese market is continuously booming, while the trade policies are pretty stringent. The research intends to discuss the challenges businesses face in China when it comes to business expansion. Hence, the case of Clearspring, a renowned name in the UK food industry, will be analyzed regarding business expansion. The research will concentrate on evaluating the economic and policy-based issues of the Chinese market and how they will create challenges for the case study. Hence, mixed methods and primary and secondary data will be evaluated to get the right output.
Table of Contents
1.3. Significance Of the Research. 3
1.4. Rationale Of the Research. 4
1. Introduction
1.1 Background
Staying ahead of the competition in China’s booming e-commerce market can be difficult, but the world’s second-largest economy still presents plenty of economic and policy-based challenges for businesses trying to gain an edge over their competitors. Clearspring, a company that produces plant-based food products, has plans to double its business in China by the end of 2017 (Bureau, 2022). While this expansion will surely help Clearspring reach its goal of generating $1 billion in revenue by 2020, there are several challenges the company will face during this process that must be considered before moving forward with this plan. Below are the top five economic and policy-based challenges Clearspring might face while expanding its business in China. The CEO of Clearspring, Inc., Jeff Li, recently announced that the company will expand its business into China to address the growing market there (Carrington et al. 2015). While it’s true that China’s market offers many opportunities to foreign companies who can capitalize on the ever-increasing economy, Clearspring will have to face several economic and policy-based challenges if it wants to fully embrace this growth potential and not experience setbacks along the way. The research would help identify these challenges while maximising the success of Clearspring in expanding its business in China.
1.2. Aim and objectives
This research study aims to investigate businesses like Clearsprings that tend to face economic and policy-based challenges in China.
Objectives:
- To analyze the food industry policies in China.
- To investigate the economic status and downturn that Clearsprings could face in China.
- To evaluate the current economic and food policies creating a challenge for Clearspring in China.
- To highlight the impact of cultural differences on the sustainability of Clearsprings in China.
1.3. Significance Of the Research
The research is significant as it will deliver a clear idea about the Chinese business rules and regulations and an overview of the impending challenges that Clearspring might encounter while doing business in China (Cotton, 2022).
1.4. Rationale Of the Research
The rationale is to conduct a thorough analysis of the Chinese market and specifically the food industry. This will deliver a clear idea about how the case organisation might face issues related to different policies.
2. Literature Review
As per Fox and Morris, (2019) one of the issues Clearspring will face is that the Chinese government may not approve of its sustainability practices. The Chinese government has been known to be hostile to foreign businesses, which may create issues and challenges for a company trying to operate sustainably. Additionally, Clearspring will have to deal with Chinese business policies designed to protect local businesses. These policies can make it difficult for foreign companies to expand their operations in China. To address these challenges, Clearspring will need to provide accurate data about its business practices to the Chinese government so that they can prove how important sustainability is. If they fail to do this, it might be more difficult for them to secure approval from any given area’s Chinese economic policies or business policies.
Along with this, García, (2013) believed that if the company wants to do business in China, it should consider the country’s strict food safety laws. Because of the high demand for fresh food, many businesses face issues with expiration dates. For example, companies that make foods from beans (such as soy milk or tofu) must be extra careful about their product’s shelf life. In addition, Chinese economic policies can make it challenging to expand any business. For example, the government recently announced a crackdown on foreign investment in specific industries. As a result, companies like Clearspring will need to be cautious when expanding their businesses into China. These are just some of the challenges Clearspring might face while operating in China (Mitchell Omoruyi, 2018).
Tofu is made from bean curd, which is pressed into a block using coagulants. When tofu is freshly made, it has a soft texture similar to custard. However, it hardens as time passes. Freshly made bean curd has a short shelf life and must be eaten within four days at room temperature or three days if refrigerated; otherwise, spoilage occurs quickly due to fungal growth unless preservatives are added (Santandercb.Co. Uk, 2022).
One of the economic and policy-based challenges that Clearspring will face while expanding its business in China is that customers are often suspicious of foreign brands. They may view these brands as being untrustworthy or of lower quality. As a result, Clearspring will need to work hard to build trust with potential customers in China. This could involve investing in marketing and advertising and working with reliable local partners (Mitchell Omoruyi, 2018). When expanding its business in China, Clearspring will face economic and policy-based challenges that may result in business issues. One significant economic and policy-based challenge Clearspring will face while expanding its business in China is the lack of a local distribution network. This could lead to higher costs for the company, as it will have to ship products overseas or set up its distribution network within China. This could also lead to longer customer delivery times, as products must travel further to reach them. Another consequence of not having a local distribution network may be that product quality control may suffer (Okazaki, 2017). For example, suppose Clearspring relies on suppliers to distribute its products in China. In that case, it will have no control over the manufacturing process if there are any issues with quality during production.
3. Methodology
The methodology refers to presenting the methods of data collection and analysis. Here, the research has focused on adapting a mixed approach where both primary and secondary data will be collected and analyzed to conclude. The qualitative and quantitative data will be collected along with the secondary data to effectively adhere to the research questions (Santandercb.Co.Uk, 2022). The quantitative data will be collected via a survey questionnaire where other small and medium businesses in China will be involved. The qualitative data will be collected via interviews with industry experts who know about chinses trade policies. The secondary data will be accumulated based on the available secondary information such as articles, journals, etc. Thus, the research work would take 16 weeks to complete, which is presented with the help of the below.
| Tasks | Week 1 to 4 | Week 5 to 9 | Week 10 to 13 | Week 14 to 16 |
| Selecting a topic for the research | ||||
| Developing aim and objectives | ||||
| Developing a proposal | ||||
| Initiating research work development | ||||
| Introduction and background | ||||
| Methodology | ||||
| Data collection | ||||
| Data analysis | ||||
| Conclusion and submit |
References
Bureau, A., 2022. Expanding Your Business to China: What Options Do You Have!. [online] ALCOR FUND. Available at: <https://alcorfund.com/insight/expanding-your-business-to-china-what-options-do-you-have/> [Accessed 7 July 2022].
Carrington, G., Maniam, B. and Subramaniam, G., 2015. Is China Playing Fair with Its Economic and Trade Policy?. International Journal of Trade, Economics and Finance, 6(1), pp.73-78.
Cotton, B., 2022. Clearspring secures seven-figure funding package from Santander – Business Leader News. [online] Business Leader. Available at: <https://www.businessleader.co.uk/clearspring-secures-seven-figure-funding-package-from-santander/> [Accessed 7 July 2022].
Fox, C. and Morris, S., 2019. Evaluating outcome-based payment programmes: challenges for evidence-based policy. Journal of Economic Policy Reform, 24(1), pp.61-77.
García, J., 2013. The Relationship between Economic Growth and Energy in China: Medium- and Long-Term Challenges. Latin American Policy, 4(1), pp.4-23.
Mitchell Omoruyi, E., 2018. China s Rapid Economic Transformation and the Active Changes of its African Policy. Journal of Business Management and Economic Research, 2(2), pp.7-34.
Okazaki, K., 2017. Banking System Reform in China: The Challenges to Improving Its Efficiency in Serving the Real Economy. Asian Economic Policy Review, 12(2), pp.303-320.
Santandercb.Co.Uk, 2022. Clearspring cooks up global expansion plans with Santander funding | Santander Corporate & Commercial Banking. [online] Santandercb.co.uk. Available at: <https://www.santandercb.co.uk/case-studies/clearspring-cooks-global-expansion-plans-santander-funding> [Accessed 7 July 2022].
