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PESTEL of China
Economical
Market structures of Chinese market is shown as perfectly competitive and
monopolistic.
Anti-monopoly law aids these structures which usher the shift of the economy to
be market
oriented economy" which is stated in UK Essays (2013) that shows the
concentration of
government control. "Anti-Monopoly Law of China: Forbid market monopolistic
conducts and curb administrative monopolies" (Fan,2010)
China was change to investment-led character when economy shift to market
oriented economy. These drives the citizens to be investors rather than consumers
that determines the relatively high domestic savings rate especially during the
period of 1997 to 2007 (Hill. Et al., 2013). Consumptions rate is considerably lower
than spending.
The beginning of export-led growth increase the GDP (HiIl.et.al.2013), and
potentials of joint
venturing and franchising which assists "the growth of manufacturing sector "as
stated by
UK Essays (2013). Direct exporting is recommended for it can equalise the risk and
demand
of international entry strategies which is therefore conducive to become partner in
China.
Sales offices, strategic alliances and licensing which is difficult for foreign investors
can be
diminish by direct exporting.
"China's long term plan for economic planning known as Five-Year Plan which
conducted for
future development orientation since 1953 repeating every five
years"( China.Orq,2014)
helps the economic growth of China.
Investments lead to economic prosperity of the country but due to high domestic
savings, it
is hard for foreign retailers like Breaktalk to fit in.

Political
China market is competitive due to its large foreign and domestic investors trying to
gain
Chinese market share.
"Liberalisation for retail market started around 2004 beginning with Hong Kong and
ASEAN
countries". (Swift,2011) which impact Best Buy to hastened their decision to enter
the China
Market with their fast food products. The culture discord between US and China
which is Individualism and collectivism differences can lead to high entry barrier for
foreign investors and causes failures in merger and acquisition as well. However,
there do not seem to have problem for BreakTalk as the culture is similar to China in
many ways.
"Compulsion of the domestic partners reduces the entry barrier" (UK Essays,203),
enables
the accessions of the foreign investors to enter the China market for globaIisaton
and
expansion. Preferences between BreakTalk was different from China political
systems which
leads to failures in their globalisation.
Changing trend of spending attitudes is increasing in China as Joyce (2014) a
Australian
agriculture minister said to produce a product that works side by side with the
increased
consumption requirements of this part of the world, where people are marching by
their tens
of millions and hundreds of millions into the middle class in ABC news on 16
September 2014. As
people are being educated, the attitudes of spending also changes as they advance
their
way to middle class group.
Legal
Tax refunding program rebate and modified rebate program of China are given to
the

citizens in order to upgrade living standards of the rural populations. Internet

shopping
allows the consumers to void the tax payment. E-commerce has been developing so
online
retailers like Amazon can fit in easily.
High tax on both citizens and investors are collected every year especially on the
luxury
goods. According to LVMH, a French luxury conglomerate, a Louis Vuitton handbag
costs
30% more in Beijing than in Paris" (The Economist.2014).

"Firstly, Registration, certification and licensing requirements are taken seriously."

(Blackwell,2010) as they are foreign investor it is more difficult. According to many
cases reported in news company enlisting globally can take certain amount of time.
If any business should be delayed due to lagging registration or other requirements,
can effect the business to bankrupt or closure. As they are taken more seriously, the
timing also differ variously.
"Secondly, business scope differences." (Blackwell, 2010) China retail market is
competitive and have numerous competitors. Scope of business differ also due to
culture differences and economy variations. Foreign investors may face deduction in
profits due to currency exchange rates. It is also difficult to charge the low end
customers with high price because of the difference in economy in the rural and
urban areas.
"Finally, particularly" the US companies" (Blackwell, 2010) are to be aware of the
legaI differences in as much to the strategies, employing locals and product and
price differences as it can lead to closure of the business. Western strategies could
not be implemented because of wide and numerous current markets and
competitors. Inexpensive imitation of food products are problematic for food
retailers like BreakTalk.

Social
As the Exhibit - shows that substantial growth in middle income sector due to the
numbers of rural cities corresponding the "increase in middle income group"
(UKEssays, 2013). The targeted urban populations have considerable consumptions
rate as they are willing to spend which reinforce the trend of spending against the
culture of saving. Their altitude of spending on food products are change socially.
As "the income of newly educated class increases "(UK Essays, 2013) population of
working young adult
and their affluence to spending also increases. This gives BreakTalk abundant
opportunities to target the age group 15-39. Attitudes is one attribute of the social
factor, socially aware young adults may consider products that gives them balance
between the conjunction of life and technology.
Changing trend of spending attitudes is increasing in China as Joyce (2014) an
Australian agriculture minister said to produce a product that works side by side
with the increased consumption requirements of this part of the world, where
people are marching by their tens of millions and hundreds of millions into the
middle class in ABC news on 16 September 2014. As people are being educated, the
attitudes of spending also changes as they advance their way to middle class group.

Technological
Advancements in information technology were being made ever since 2006
coinciding with
BreakTalk entry to China market that favours their food products. In April 2006 the
Science and Technology Agreement was extended by a 5-year agreement was
signed. The agreement encompasses cooperation between U.S. and China in variety
fields like marine conservation, renewable energy, and health.' (UK Essays, 2013) It
prelude the continuous development of technology in China.
It was stated in UK Essays (2013) that "no law is endorsed on the intellectual
property rights (IPR)", particularly there will be more restriction in the copyrights
and registration issues which is why products imitation will be limited and favours
the food retailer like BreakTalk. Innovative products server the young people
because of the 'improved technology spit/over effect from the other multinational
corporations". (UK Essays 2013)