Unit 5 International business task two full assignment
marking; You have carried out a situational analysis on two countries a selected business may consider trading in
You have explained how business support systems enable a selected business to trade internationally.
You have explained the ...
Introduction
This report will discuss two contrasting countries that the business ‘Greggs’ could potentially trade in
which they aren't trading in already. Greggs Plc is a British bakery chain. It specialises in savoury products
such as bakes, sausage rolls, sandwiches and sweet items including doughnuts and vanilla slices. The
business was founded within 1939 and is only operating within the UK and has a main headquarters in
Newcastle Upon Tyne. Greggs currently has 22,883 employees within the business as of 2021. The
business's vision aims to become the customers’ favourite food-on-the go service. The two contrasting
countries that are going to be discussed are The Netherlands and China. The Netherlands is a country
located in northwestern Europe which is also known as Holland. The population of the country currently
stands at 17.53 million. China is the world's most populous country with a population of 1.44 billion
people. It has quickly become the second largest economy in the word and is located in Southeast Asia
along the coastline of the Pacific Ocean.
Industry Overview
The Dutch breakfast cereals market grew by 3.7% in 2019 to reach a value of $142.6 million. In 2024, this
same market is forecast to have a value of $168.5 million which demonstrates an increase of 18.2% since
2019. Within the Dutch breakfast cereals market the Kellogg company is the leading player, generating a
34.7% share of the market's value. The Chinese breakfast cereals market grew by 5.7% in 2019 to reach a
value of $2,428.2 million. In 2024, this same market is forecast to have a value of $3,172.2 million which
demonstrates an increase of 30.6% since 2019. Currently, Viz Branz Limited is the leading player in the
Chinese breakfast cereals market, generating a 15.2% share of the market's value.
Political factors
One political factor that could have an impact on Greggs wanting to trade in the Netherlands and China
would be infrastructure. Infrastructure is defined as the basic physical systems of a business, region, or
nation and often involves the production of public goods or production processes. Examples of
infrastructure include transportation systems, communication networks, sewage, water, and school
systems. The Netherlands demonstrated a high quality infrastructure due to their high rating of 94.3 in
2019. Out of 100 countries the Netherlands stood at 2nd place according to the quality of their
infrastructure. When a country invests in economic infrastructure, businesses are able to produce and
deliver more goods and services so this will therefore be a beneficial opportunity for Greggs.
Additionally the use of efficient transportation systems will enable Greggs staff members to get to work
easily, the business depends on employees to serve its customers so it is vital that employees can get to
work easily. In comparison to the Netherlands, China had a ranking of 77.9 according to the quality of their
infrastructure. Although this percentage is lower than China it is still substantially high, this means there
are still good opportunities for Greggs to operate in China. It is also important to note that China is a much
larger country than the Netherlands so there are more areas of work that need to be maintained.
However due to this high rating there is still a range of opportunities that would be available for Greggs
such as; the ability to produce and deliver more goods and services, efficient transportation services
would enable their employees to travel to work easily. The benefit of having a high quality infrastructure
encourages the growth of businesses and the economy. It’s an essential component that connects
businesses to their markets and employees to their work. Without substantial funds funnelled into the
development, repair and maintenance of infrastructure, businesses will experience issues, and some
won’t survive long-term.
Another political factor that would affect Greggs trading in both countries would be government policies.
Government policies refer to the actions and decisions made by governments at various levels to achieve
specific goals and objectives. These policies can affect different aspects of society, including businesses,
, the economy, and the overall welfare of citizens. In the Netherlands it is evident that the political
landscape in The Netherlands is stable and it is unlikely that there will be significant material political
changes affecting doing business in The Netherlands in the near future. This therefore would be an
opportunity for Greggs due to the fact that the business would not need to make any sudden changes that
could come at a cost for the business. One of the primary political factors that interfere with the Chinese
market is its government policies and regulations. The socialist Chinese government is known for making
unsettling changes to policies overnight and this affects both Chinese and foreign traders. This therefore
would be a treat for Greggs when operating in China as the creation of long-term marketing plans
becomes almost an impossible concept in China as they may have to make sudden changes which could
come at a cost.
Economic factors
One economic factor would be the GDP per capita. GDP (Gross domestic product) per capita is a financial
metric that breaks down a country's economic output per person and is calculated by dividing the GDP of
a nation by its population. In 2021 the Netherlands had a $48,302 GDP per capita in December, this
therefore would provide an opportunity for Greggs to operate within the Netherlands due to the fact that
the higher GDP rate means that individuals will have more money to spend on non essential products and
services. This higher rate means that more individuals can pay to eat-out and buy takeaway services, and
this is significantly beneficial for Greggs as they will have a higher chance in making sales because more
people can afford to buy their products. The more sales Greggs can make this will result in more profit for
the business and this is a huge advantage for them. Whereas, China's GDP per capita rate stood at $11,188
in December 2021. This therefore could be seen as a threat as their GDP rate is substantially lower in
comparison to The Netherlands, since the lower the GDP per capita the less extra money consumers have
to spend on non-essential items. Although it could be viewed as a threat it could also be seen as an
opportunity as in the previous year (2020) China’s GDP rate was $830 lower at $10,358, so it is starting to
see growth as it is slowly increasing.
In addition another economic factor would be interest rates. An interest rate is the reward for saving and
the cost of borrowing expressed as a percentage of the money saved or borrowed. The Netherlands
interest rate stood at 2.5% in January 2023, this would act as an opportunity because the lower the
interest is it means that it is less expensive to borrow money. If Greggs needed to take out a loan in the
Netherlands they would pay back less than they would in the UK, since the UK’s interest rate stands at 4%.
The interest rate within The Netherlands would act as a good advantage for Greggs as they can reduce
costs when needing to borrow money. In comparison China's interest rate stood at 3.65% in January 2023,
this therefore would act more as a threat towards Greggs due to the fact that it would be more expensive
for them to borrow money. If it is more expensive for a business to borrow money this can negatively
impact them due to the fact they'll have to pay back more than they have borrowed and this would take a
toll on their profit margins as they will be making less profit.
Social factors
One social factor would be consumer tastes. Consumer tastes refer to the products and services that
consumers consciously choose over others. Consumer tastes are so powerful that they can change how
businesses conduct their activity. Since the outbreak of Covid-19, there have been several shifts in
consumer behaviour and preference in China’s food market. Chinese customers generally conduct a great
degree of research into products prior to purchase such as what ingredients it includes and the types of
certifications that either the brand or product has received. Chinese citizens usually eat traditional
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller flouise. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.67. You're not tied to anything after your purchase.
