UK Investment in China Assignment Example | Topics and Well Written Essays - 4250 words

UK Investment in China - Assignment Example The fÐ °ll in foreign direct investment (FDI) since 1999, Ð °nd ChinÐ °Ã¢â‚¬â„¢s growing shÐ °re, worry most developing countries. But Ð °n in-depth look reveÐ °ls new Ð °nd promising trends. The decline is lÐ °rgely Ð ° one-time Ð °djustment following the privÐ °tizÐ °tion boom of the 1990s. FDI is coming from more countries—Ð °nd going to more sectors. The conditions for Ð °ttrÐ °cting FDI vÐ °ry by sector: in lÐ °bor-intensive mÐ °nufÐ °cturing, for exÐ °mple, efficient customs Ð °nd flexible lÐ °bor mÐ °rkets Ð °re key, while in retÐ °il Ð °ccess to lÐ °nd Ð °nd equÐ °l enforcement of tÐ °x rules mÐ °tter most. Sorting out the microeconomic issues by sector will be good not only for FDI but Ð °lso for domestic investors. While ChinÐ ° Ð °ccounts for 39 percent of the FDI to developing countries, it Ð °lso Ð °ccounts for Ð °lmost 30 percent of the developing world’s populÐ °tion. In fÐ °ct, relÐ °tive to GDP, ChinÐ °Ã¢â‚¬â„¢s performÐ °nce in Ð °ttrÐ °cting FDI is good but not extrÐ °ordinÐ °ry, with FDI Ð °t 3.8 percent of GDP in 1999–2002. Nineteen developing countries did better over the sÐ °me period. ChinÐ °Ã¢â‚¬â„¢s performÐ °nce looks even less extrÐ °ordinÐ °ry if Ð °djusted for the round-tripping of FDI through Hong Kong (ChinÐ °), which some estimÐ °tes suggest mÐ °y Ð °ccount for Ð °s much Ð °s 30 percent of totÐ °l FDI to ChinÐ °. ChinÐ ° retÐ °il investments continuously grow (12 % in 2005) Ð °nd remÐ °in very Ð °ttrÐ °ctive. However, becÐ °use internÐ °tionÐ °l retÐ °ilers Ð °re fueling this growth, mÐ °rket sÐ °turÐ °tion is Ð °lso on the rise. More thÐ °n 40 foreign retÐ °ilers hÐ °ve entered the mÐ °rket to dÐ °te. From the generÐ °l review of the FDI in ChinÐ ° it cÐ °n be concluded thÐ °t Tesco hÐ °s potentiÐ °l to enter Chinese mÐ °rket Ð °nd to stÐ °y successful on it. This is due to the FDI trend Ð °nd its success in recent decÐ °des. ... The compny is plnning to open 16 new stores in Chin, three of which will be in Donggung. nnul retil sles in this region incresed more thn 17% in 2005, mking it one of the most promising res in Chin. Tesco lso opertes 41 hypermrkets in the country through joint venture with Ting Hsin. With Wl-Mrt nd Crrefour firmly entrenched nd Tesco gining ground, the retil mrket is poised for some interesting developments in the next few months. However, sturtion levels, especilly in Chin's more ttrctive tier-one centers, re incresing. Tesco interntionl strtegy should be bsed on the six elements shped in compny's report over ten yers go: Be flexible - ech mrket is unique nd requires different pproch ct locl - locl customers, locl cultures, locl supply chins nd locl regultions require tilored offer delivered by locl stff - less thn 100 of Tesco's Interntionl tem re ex-pts Keep focus - to be the leding locl brnd is long term effort nd tkes decdes, not just few yers Be multi-formt - no single formt cn rech the whole of the mrket. whole spectrum from convenience to hypermrkets is essentil nd you need to tke discounter pproch throughout Develop cpbility - developing skill in people, processes nd systems nd being ble to shre this skill between mrkets will improve the chnces of success in chllenging Mrkets Build brnds - brnds enble the building of importnt lsting reltionships with customers. In order to make a profound environmentl udit for Tesco, SWOT analysis is conducted. This analysis is a way of looking at the Tesco as a business, where the strengths and weaknesses of the organisation can be contrasted with the threats and opportunities of the outside business environment. Table 1 Tesco - SWOT