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China The Company's Diversification Strategy

Posted on:2002-03-04Degree:MasterType:Thesis
Country:ChinaCandidate:W L HouFull Text:PDF
GTID:2206360092965234Subject:Business Administration
Abstract/Summary:PDF Full Text Request
Utilizing the management theories and methods learned in the college, and consulting the working experiences of many years, the author analyzes and studies initially the situation of Huaxia Tea Company. The author points out the strengths and weakness of it, and then advances the train of thought of strategic development from now on. This thesis has four chapters as follows.In the 1st chapter, the author introduces the history, present and classification of teas in brief, mainly making the readers know the teas on the whole which are Huaxia's main commodities. Huzxia is one of the earliest specialized foreign trade companies of New China. It had been supervising and coordinating the export of China teas from the founding time of China to the end of 90s. The tea trading of Huaxia itself began at the end of 80s. Up to now its export volume of tea has become No.1 in China. Huaxia achieved great success, especially in oolong tea business. However, the company is also facing many serious threats in developing road, such as the declines of black tea and green tea business, the slow movement in domestic marketing, and so on.In the 2nd chapter, the author analyzes the structure of the tea industry to which Huaxia belongs to with Porter's Six-Forces Model. (1) Bargaining power of consumers. In export market, green tea and oolong tea are the peculiar products of our country, and the other teas have their hobby areas, so the bargaining power of consumers is weak. In domestic market, the supply is more than the demand in a long period of time. Facing too many brands of tea, the consumers have a large room to select. (2) Bargaining power of suppliers. The teas for export and domestic market have the same supply sources. Besides the small scale, these sources have the same characters: low cooperation ability, lack of essential methods and sources for getting information. So the bargaining power of suppliers is comparatively weak. (3) Rivalry among competing firms. In domestic market, the main rivals of Huaxia are the tea dealers who have famous brands. In export market, Huaxia feels big pressure from other tea-producing countries in the black tea business. However it also feels heavier pressure from the discord among the Chinese exporters in the business of all kinds of teas. (4) As a kind of natural and health products, tea has a large developing space. It is difficult to be substituted by other products (such as coffee etc.). (5) Mutual-promoting power. The research, producing, consumption and cultures of tea are promoting each other. It's making teas more and more important and popular in people's daily life. (6) Potential competitors. Both in domestic and export markets, the process that Huaxia looks for new developing opportunities is also that for the potential competitors. On the other hand, Huaxia cannot prevent the potential entry of new competitors into the market it has entered.In the 3rd chapter, the author presents a detailed analysis of the competing status of Huaxia with SWOT methods. The strengths include: comparatively abundant money, wide client channels, good reputation, etc. The weak points are: The operations lay particular stress on foreign trade, which is flexible and risky. During its development, more and more professional individuals are needed. The management system cannot keep up with the development of the company, etc. The main threats are: When the export license system of tea is canceled, new exporters will share a part of the market and margin, even disturb the tea export market. The reduction of import duty rate will enable the foreign teas flow into China easily and aggravate the competition in domestic market. The technical progress and successful marketing of tea-producing countries may give the pressure to the exporters. The main opportunities are: When Huaxia becomes a public company; it can get adequate money for development. After joining into WTO, the discriminatory tariffs will be reduced. It will help Huaxia strengthen its position of international...
Keywords/Search Tags:Diversification
PDF Full Text Request
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