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Country Study
This study will focus on the casual dining restaurant and sports bar Buffalo Wild Wings which primarily sells buffalo wings, and its potential international expansion into China, one of the worlds fastest growing major economies. In order to gain a better understanding of China, it is important to understand the environmental factors associated with the country. I will begin by discussing economic, geographic, and political-legal factors.
According to a 2013 estimate of purchasing power parity, China has a GDP of $13.3 trillion. It has a 7.6% GDP real growth rate and ranks 120th in the world in GDP per capita. One of the prime advantages of China is a populous labor force that ranks first in the world, totaling 797 million evenly split between agriculture and services with a few less working in the industrial sector. The unemployment rate is a manageable 6.4% and a 7.7% industrial production growth rate. China exports electrical and other machinery, data processing equipment, apparel, radio telephone handsets, textiles, and integrated circuits primarily to Hong Kong and the United States, as well as to Japan and South Korea. China also imports electrical and other machinery as well as oil and mineral fuels, metal ores, nuclear machinery components, optical and medical equipment, motor vehicles and soybeans. Its primary import partners are South Korea, Japan, Taiwan, United States, Australia, and Germany. China utilizes transportation through its 507 airports, and a railway system that ranks 3rd in the world totaling 86,000 km. China also makes use of its roadways totaling in excess of 4,000,000 km and stakes claim to the largest amount of navigable waterways in the world. Major seaports include: Dalian, Ningbo,...
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...rs. Internationally, our competition is far less and we have the opportunity to monopolize the market. Although the cost of entry may initially be steep, I would expect to turn a substantial profit within just a few short years based on the growing economy and lack of competition.
References
The World Factbook. (n.d.). Central Intelligence Agency. Retrieved March 28, 2014, from https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html
China Employment Law Guide. (n.d.). Baker & McKenzie. Retrieved March 30, 2014, from http://www.bakermckenzie.com/files/Uploads/Documents/North %20America/DoingBusinessGuide/Dallas/br_china_employmentlawguide_13.pdf
Deloitte. (n.d.). Taxation and Investment in China 2013. Retrieved March 30, 2014, from http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-chinaguide- 2013.pdf
Buffalo Wild Wings was founded in 1982 by two longtime friends, Jim Disbrow and Scott Lowery. Disbrow was born in Kentucky and moved to Cincinnati Ohio, when he turned 11 so he could live with figure-skating coaches David and Rita Lowery the two later became his legal guardians. Their son Scott Lowery who was 1 when Disbrow moved in with the Lowerys, grew up regarding him as a brother. Disbrow was a rather gifted skater, so much so that he was named an alternate to the 1968 Winter Olympics in France for the United States Skating team. In 1974 Disbrow moved to Buffalo, New York. In Buffalo he got a firsthand look and taste for the cities spicy local style of chicken wings, in a place called the Anchor Bar. Later in 1981, while judging a figure skating competition at Kent State University. Disbrow ran into Lowery and the two decided to get some Buffalo-style chicken wings. After looking everywhere in town and not finding a single
Breaking into new markets helps the company grow and brings in new customers, which leads to higher profit margins.
China’s economy is one very large indicator of its role in globalization. “In 2010 China became the world’s largest exporter” (CIA World Factbook). Without China many places such as the United States of America would be without billions of goods imported from China annually. An influx of companies moving their manufacturing to China has allowed people to flock to cities and find jobs. China’s economy has grown exponentially over the last few decades. In the last three years China’s economy has grown by nearly ten percent every year. Despite this influx of money to China it has also resulted in many drawbacks. For example, China’s environment has been obliterated. China burns more coal than every country in the world combined. Beijing has been so badly polluted that there are actually companies that sell cans of fresh air to people, and gas masks are a common sight. On January 12th 2013 Beijing’s air pollution reached a record setting 775 PPM. To put that into perspective, the scale for measuring pollution is 0-500 PPM. This set an all-time recorded high. In Los Angeles a high ...
China’s trade with the world grew substantially in the first three decades of the 20th century, marking a historic time for the country. In the 1840s, the Chinese economy was strongly closed; however, when Great Britain and other powerful countries pressured their economy, China was willing to open international trade within their own economy. Over the next 60 years, China experienced a small opening of trade amongst other foreign powers, allowing transactions amongst foreigners allowed. The funded railroad aroused industrialization, as well as publicity and overseas shipping (Yan, 2014). The main reason for moderation in China is because they are so much more focused on production rather than consumption. Last year, China’s consumption accounted for 35 percent of their economy; a little over 10 years ago, it was rated that 50 percent accounted for their overall consumption (Reich, 2010). Foreign exports and imports arose dramatically, increasing the yearly expansion rate of trade to about 7.4 percent. The Chinese economies share in world trade grew a little under 2 percent from the late 1800s to the mid 1900s. By the early 20th century, comparative advantage was presented all throughout their economy (Yan, 2014).
Coates, B., Horton, D., & McNamee, L. (2014, January 1). CHINA: PROSPECTS FOR EXPORT-DRIVEN GROWTH. Economic Roundup Issue 4. Department of the Treasury (Australia).
...st and stand in the world. It is predicted that China will one day be the largest economy growing country in world. They continually growing and rebalancing their world to be the best. The growth of economy will depend on the Chinese government comprehensive economic reforms that more quickly accelerate in China transition to a free market economy. The consumer demand, rather than exporting the main engine of economic growth; boost productivity and innovation; address growing income disparities; and enhance environmental. (Morrison, 2014,para2)
With a population of 1.357 billion (2013)3, China is the most populated country in the world. Along with the huge population comes a market that is unmatched by any other country of the world. Both domestic companies and foreign companies want to tap into this large market that just recently embraced capitalism and entered into the World Trade Organization.
From the 1970s, there has been a wave of liberalization in China, which was introduced by Deng Xiaoping. This is one of the key reasons to the rise of China to be one of the economic giants in the world. In the last 25 years of the century, the Chinese economy has had massive economic growth, which has been 9.5 percent on a yearly basis. This has been of great significance of the country since it quadrupled the gross domestic product (GDP) of the country thus leading to saving of 400 million of their citizens from the threats of poverty. In the late 1970s, China was ranked twentieth in terms of trade volumes in the whole world as well as being predicted to be the world’s top nation concerning trading activities (Kaplan, 53). This further predicted the country to record the highest GDP growth in the whole world.
According to National Chicken Council it is reported that during Super Bowl weekends Americans are expected to chow down on close to 1.25 billion chicken wings. Of this amount, a majority of the wings will be consumed either in or from a restaurant. In Hays, Kansas there is not a predominant wing venue, however, there is one name that frequently comes up: Buffalo Wild Wings. A very popular choice among the college crowd, this establishment has cemented its name with some of the top sports bars in the business since 1982. This analysis will discuss whether or not bringing Buffalo Wild Wings to Hays, Kansas would be a successful economic venture by looking at potential profitability, future clientele base, competing businesses, and employment opportunities.
KFC is one of the most popular fast-food restaurant chains by the Yum! Brands and fried chicken is what the company specializes. KFC was founded by Harland Sanders, which was later known as Colonel Sanders. Moreover, KFC was one of the first fast-food restaurant chains to expand internationally, including the opening outlets in Beijing, China, in November 1987 (KFC Website, 2013). The fact that KFC was the first Western fast food company in China makes it very challenging to satisfy the Chinese market. Trying to sell the same products or services is a typical approach to most foreign expansion for franchise businesses (Bell, 2011). However, one-size fits all approach is not what KFC chooses to apply for their company. According to Shelman, the writer of the case study regarding KFC’s Explosive Growth in China, key success for KFC China is to change the menu to suit Chinese tastes and style of eating (Starvish, 2011). “One of the lessons I take away from this case is that to ...
The market is not ready yet for more product lines even though the economy is growing because the purchasing power is not that strong compared with the ones in South America. Therefore there is not yet profit to gain by di...
There are high entry costs to enter the market. The large industry competitors already have captured the market share.
The first innovative strategy of KFC China is localizing the menu. Trying to sell the same products or services is a typical approach to most foreign expansion for franchise businesses (Bell, 2011). However, one-size fits all approach is not what KFC chooses to implement for their company. According to Shelman, the writer of the case study regarding KFC’s Explosive Growth in China, key success for KFC China is to change the menu to suit Chinese tastes and style of eating. “One of the lessons I take away from this case is that to do China, you have to do China”, says Shelman. KFC localizes their offerings and adapts their existing products to appeal to the Chinese customers’ needs. The menu features Chinese local food like egg and vegetables soup. Examples of innovative products are the Dragon Twister (chicken roll of old Beijing) and the glass jelly milk tea (Zhou...
The rise in China from a poor, stagnant country to a major economic power within a time span of twenty-eight years is often described by analysts as one of the greatest success stories in these present times. With China receiving an increase in the amount of trade business from many countries around the world, they may soon be a major competitor to surpass the U.S. China became the second largest economy, last year, overtaking Japan which had held that position since 1968 (Gallup). China could become the world’s largest economy in decades.
...ll as private sectors have gone international with new ventures outside the country. These companies are generating revenue, though modest compared to their overall sales revenue, by deputing their expert personnel outside.