National governments are pushing businesses to export their products and services to generate employment and help the economy. Before entering the Chinese market, it is necessary to analyze company’s funds, and implement its long-term export plan. This, in its turn, is directly linked to the company’s marketing capabilities and strategic effectiveness.
Some of the strategies may include breaking down markets into several regional segments, understanding how the company’s property and products are regulated under Chinese law, etc. Two major theories explain a company’s choice of foreign operation methods First is based on economic strategy with an emphasis on costs and profits, and the other is a more gradual process based on previous experience and knowledge. Based on the theory of internalization theory, Blackburne and Buckley (2019) suggest business incubators as the possible market entry mode concept. The idea of business incubators is based on creating space for providing a strategic system of business assistance.
On the other hand, the constant development of information and new technologies have increased the potential of cross-border e-commerce as a new approach to international market entry mode. An e-commerce transaction is defined as a ceiling or purchasing products or services through computer networks (Cassia and Magno, 2022). This approach requires strong digital and IT resources. Thus, the IT capability of a company may positively or negatively affect the financial and commercial performance of the company. Due to the increasing popularity of organic products, there are more agricultural goods in the market.
The complexities of managing the organic food supply chain will rise in tandem with the global organic food industry. The largest single market for organic products in China is 2.4 billion dollars, while the maximal market in USA is in the first place with 24.3 billion dollars (Pu, Xu, and Xuang, 2020). However, there is instability in the agricultural supply chain, which might be caused by the non-effective market entry strategy of the exporters. With the increase in consuming organic products, the role of e-commerce platforms has become more significant. Both establishing their e-commerce network and using third-party e-commerce platforms to expand the export may be effective for companies in entering the international market.
Thus, referring to the above facts, it is possible to conclude that export activity is the most suitable way to enter the foreign market for Whole Foods Market. China’s economy has grown; therefore, the purchasing power of its inhabitants has grown too. Export activities can become an intelligence campaign to approve deficiencies, taking into account local consumption specifics. In case of an increase in demand for the products of this company, it may move to a more controlled activity in the Chinese market.
The role of the exporter companies in creating workplaces and the economy has become vital. Nevertheless, before entering the international market, any company should consider several factors that may affect the costs and pricing of the products. Such factors are the cost of production, the need to cover long-term capital investments, labor intensity of production, and limited production resources. Moreover, the law regulations of the local region are crucial for the company’s market strategies too. As China’s government actively participates in the local economy, the purchasing power of the upper, middle, and lower classes has grown sharply over the past decade. In that way, China’s rules on the product and property can influence the stability of the businesses.
However, with the increase in organic food consumption worldwide and the rise in the number of agricultural companies, more and more challenges occur in maintaining the organic food supply chain. China has recently shown an increasing index of the agricultural products market, which requires a practical and working market entering strategy. With the development of communication technology, and IT capabilities of companies, establishing cross-border e-commerce platforms could be a possible strategy for exporters to expand the local market. Therefore, alongside the commercial and law requirements of the company, digital capability also plays a significant role in the company’s place in the local market.
To sum up, Whole Foods company can enter the market without a doubt:
- The Chinese market is a priority choice because of its stable policy and well-developed economy.
- Since Chinese agriculture is on the top level globally, Whole Foods Market can also corporate into Chinese agriculture.
- Whole Foods have a good brand image, such as caring for sustainable agriculture, protecting the environment, etc.
With proper promotion, Whole Foods Market can attract many customers to a great extent, whether they know Whole Foods.
Reference List
Cassia, F. and Magno,F. (2022) ‘Cross-border e-commerce as a foreign market entry mode among SMEs: the relationship between export capabilities and performance’, Reiew of International Business and Strategy, 32(2), pp.267-283.
Blackburne, G. D. and Buckley, P. J. (2019) ‘The international business incubators as a foreign market entry mode’, Long Range Planning, 52(1), pp.32-50.
Pu, X., Xu, Z., and Huang, R. (2020) ‘Entry mode selection and its impact on the competition between organic and conventional agricultural products’, Journal of Cleaner Production, 274.