Sainsbury's in China. Risks, Opportunities and Strategy

Essay from the year 2015 in the subject Business economics - Trade and Distribution, grade: 1,7, Edinburgh Napier University, language: English, abstract: Globalisation increases the pressure for companies to expand in foreign markets in order to stay competitive in the market. Due to the fact that expansions represent high stakes strategic decisions with far reaching consequences for Sainsbury's, a detailed analysis of the market is essential in order to a) decide whether to invest in the market and, if appropriate, b) which market entry strategy is most convenient for a successful investment in China. Comparing the business potentials of a range of countries leads to the conclusion to analyse the Chinese market in more detail in order to conclude whether the opportunities outweighs the risks. China, which is the second largest economy in the world, is due to its high population, a potentially lucrative market for retailers. The booming middle class, the increasing disposable income and the extremely positive GDP development are only a few factors, which indicates the potential of the Chinese market. A PEST analysis is a common approach to analyse the general business environment and should be informative about the environmental factors, which could threaten Sainsbury's business development. Therefore this report will examine political and economic conditions as well as cultural and social aspects for Sainsbury's in the Chinese market. It should be noted that some aspects are not directly related risks but should also be considered in order to successfully operate in China.