Essay About Chinese Marketproblem Statementi Use Pestle And Sheep Meat Activities

Anzco Foods Limited: Pursuing the Chinese Market
Case study analysesThi Anh Tho Dang Master of Agricommerce, Massey University, Palmerston North CampusStudent ID: 19028803Course name and number: 112747 International Food and Agribusiness Strategies May 11th, 2019ANZCO Foods Limited: Pursuing the Chinese MarketProblem statementI use PESTLE (which stands for Political, Economic, Social, Technological, Legal, and Environmental) technique to analyse sheep meat activities of importing, distributing and consuming in Chinese market. Table 1 illustrates key factors of PESTLE tools.Table 1: Using PESTLE tool to analyse sheep meat activities in ChinaPolitics-New Zealand is allowed to supply China with beef and lamb, along with Argentina, Australia, Brazil and Uruguay.-Under New Zealand’s Free Trade Agreement with China, tariffs on sheep meat were eliminated in 2016.-New Zealand is the main supplier of sheep meat to China, together with Australia and Uruguay having increased the amount of sheep meat exported to China since 2007.Economy-New Zealand only produces 6% of the world’s sheep meat, but contributes to 38% of the global trade. 90% of the sheep meat produced is exported.-New Zealand sheep meat depends on exporting, exposed to exchange rate risk and fluctuation in international commodity prices.-The price of sheep meat traded is set in US dollar so constant variation and volatility on the exchange rate alters export price signals in New Zealand dollar terms. -value adding initiatives and fixed price contracts with suppliers to minimize the risk and optimize the greatest return.Social-Noteworthy trend in the Chinese economy: increased urbanization, higher income and higher living standards.-If China’s GDP growth continues, by 2025 approximately 485 million people (59%) will be upper middle class.-Chinese consumers with higher incomes are demanding better quality products and are willing to pay for it.-They are spending more on better cuts of meat: 37% was spent on pork, 22% on aquatic products, 19% on poultry, 12% on beef and 10% on sheep meat. -Chinese hotels are pushed to buy more imported produce from developed countries because it is considered to be higher quality.-90% of Chinese consumers are worried about food safety. -Chinese consumers are interested in more convenience foods because they have less time to prepare meals.-Spending more money eating out. -When eating at home, prefers cooked, semi-prepared and packaged foods. Frozen processed foods are becoming more popular. -90% of all quick frozen food products are purchased through retail distribution.-Supermarkets, hypermarkets, convenient stores and boutiques stores were fast replacing wet markets in big cities, amongst affluent shoppers.- Private food labels have one percent of the market but their role is growing because consumers believe that branded products are superior. -There is a difference in consumption in the Northwest and the East and between urban and rural areas.Technology-Requiring implementing food safety systems at farm level.-90% of the meat products were shipped without cold chain facilities.-China’s fragmented logistics industry has hindered cold-chain development for high-value, temperature sensitive products. -The quick-frozen products industry had developed rapidly in China due to improvements in the cold chain infrastructure and rising domestic refrigerator ownership. -Country-of-origin branding tended to be lost when imported raw materials were incorporated into further processed products.-Most hypermarkets have a reputation for offering high quality products, greater convenience and better quality control and traceability.Legal-Chinese government had introduced new environment laws and regulations that limit chemical inputs and set minimum levels for soil air and water pollutants.Environment-Chinese consumers are more aware of the environment.-The majority of Chinese consumers are not willing to pay a premium for green products or are willing to shoulder the cost for certified traceable food.Source: Author’s own demonstration