Political Political factors play an important role in the performance of businesses in the long run. In China, political risk is relatively low compared to other emerging economies in the world. This is because China follows a one party policy, which reduces chances of political parties among opponents. The central government of China has recently revised its taxation policy in order to help it encourage wine business in the country. The government has taken the initiative to provide funds for the infrastructural projects that would help the wineries in their process of production (Daft, Kendrick and Vershinina, 2010). In case of a political framework, in which there is the existence of more than one party, as the ruling party changes, it leads to the change of ideologies and policies. The one party policy in China acts as a favourable factor for any business operation in the country. Therefore, the wine industry faces positive thrust in China. Import of bottled wine has increased between 2004 and 2009 as shown in the graph below. It can be seen from the figure that imports from Italy have increased considerably after 2006. Figure: Imports of bottled wine by China (Source: DPI, 2013) However, there is little transparency in the political system of the country. There are wide assortments of different rules encompassing the businesses in all industries in the country. Such regulations increases challenges for the investors that are currently investing in the country or are willing to invest in the near future (Collins, 2013). Economic China is the largest economy in the world in terms of population and the ranks third in the world in terms of purchasing power parity (CIA, 2013). According to 2012 estimate, the real growth rate of the nation is 7.8 percent and per capita GDP is $9300 (CIA, 2013). There is a rising middle class in China that possesses high purchasing power. This middle income group in China makes very high demand for luxury goods in the international market (Zhou, 2010). With rising income of the people belonging to the middle class in China, their exposure to the international market is increasing and they are becoming more accustomed to the western culture. This develops taste among the population for luxury products, such as high quality refined wine. This provides positive incentive for the wine manufacturers to increase their operations in China. According to comments by experts, in years to come, the Chinese “middle class” would become one of the greatest stakeholders for the wine firms. With evolution of the Chinese economy the society is also advancing. A greater proportion of the population is entering the middle class (Okonkwo, 2007). They are having high average earning and are influenced by the western culture to a greater extent. These people are becoming loyal customers of wine. Besides, increasing price differentials in the international market is a major factor that brings about growth in the Chinese wine market. Social China has a long history of brewing wine and there is a tradition of wine consumption in the country. Research shows that the consumption of wine by the Chinese population has been increasing over the last decade. Researchers have claimed that consumption of wine in China would double by 2014 (UPENN, 2012). The reason behind this change
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A Marketing analysis of Italian wine in the Chinese market Findings and discussion Table of Contents 1 Findings and analysis 3 PESTLE analysis 3 SWOT analysis 7 Porter’s five forces analysis 11 Marketing mix 4C analysis 16 Summary of findings 18 Reference List 19 Findings and analysis PESTLE analysis The PESTEL model would help to analyze the macro environment in China in which the liquor and wine industry operates…
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48 pages (12000 words)Dissertation
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