MGMT 3P98 International marketing

Pestle Analysis

China

In the last three decades, China has made a remarkable transformation from a peasant agriculturally oriented economy to a technological and manufacturing economy second only to the U.S. It has endeavoured with some success to incorporate its economy to that of the world. The Chinese market comes with three key benefits its size, which covers deserts and rain forests, and its population of over 1.3 billion China has more people than any other country in the world. . The vast amounts of people has enabled its market enjoy relatively low cost of labour, In addition, for the past 20 years its economy has been growing at more than 10% per annum and still has room for growth (Hamilton, 2008).

Political factors

The Chinese government practices Communism with its current head being Hu Jintao. It has a legislative arm that is unicameral in nature and contains 2,987 members from the provincial, regional and municipal levels. The country contains over twenty provinces, 4 municipalities and 5 regions that are considered autonomous. The country is governed by the Chinese Communist party, which controls all aspects and sectors of the country including several small licensed parties. While most nations view communism as a negative system, that stifles political, social and economic freedom and growth the Chinese Communist party has disapproved those sentiments by creating an enabling environment that has allowed its economy to grow at a high speed. Apart from few isolated cases, it has successfully created an enabling atmosphere where businesses thrive.

Economic Factors

In the last five years, the Chinese economy has achieved significant economic growth, and most analysts suggest that if its economy continues at the same rate it would soon surpass that of the United States. The most important attributes of its economy include abundant, cheap and skilled workforce. While it has the most cities with a population of 10 million and above it still has a high potential for urban growth. Its economy has a high rate of savings compared to its peers. It has a large and growing middle class with a big appetite for the western goods and lifestyle.

Social factors

One in every five people on earth resides in China. With an estimated population of over one billion and three hundred thousand China is by far the most heavily populated nation on the universe. The Chinese community is an asset; it has attracted big companies such as Apple that have set up their manufacturing component in the country. With a low minimum wage, abundant and cheap workforce, China would be an ideal to set up a business that needs a large workforce (Ghauri, 2014).

Brazil

Political factors

With a population of more than one hundred and ninety million Brazil is among the heavily crowded nations in the planet. It ranks number one in South America in terms of its size and population. In the world, it is fifth place while considering its of size and seventh place while considering its population. It has a secure and hands-on system of governance government with no indication of political unrest or instability (Miller et l. 2011).

Economic factors

Its economy is placed in number seven position with reference to its in GDP. In the resent past its economy has expanded and a phenomenal speed of over ten percent . The Brazilian government heavily depends on IMF’S monetary policy; it has a high inflation rate of more than 10%. Of the countries analysed it is the most unequal with almost a quarter of the barely being able to make ends meat. Nevertheless, it middle class is rapidly expanding and can be a target market when a business wants to enter the Brazilian economy.

Social factors

With a population of over one hundred and ninety million people living with its border, Brazil has huge population the second biggest in the Americas. Almost two thirds of  its population are categorised as urban. It is among the countries that are ethnically and racially diverse. It prides its self with a good and young workforce with more than half of the population being aged below thirty-five years (Uneke, 2007).

Technological factors

The country spends more than 1% of its budget on research and development, which has ensured a steady flow of technological advancements in all its sectors. It produces over 300,000 IT professionals each year, and it is connected increasingly remote areas with electricity and the Internet.

United Kingdom

Political factors

The Kingdom is among the more fruitful and well-heeled states on the planet. It is a permanent member of the United Nations Security Council and part of the European Union, which allows a business access markets of the other European Union members. Besides, it is also a member of the G8. The Prime Minister runs the day to day activities of the regime while the mainly a ceremonial post is the head of state

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Economic factors

The country’s economy is the sixth largest in the globe, and it has an AAA rating. Is economy includes those of Northern Ireland Wales, England, and Scotland. It has the third biggest supply of external and internal foreign direct investment in the globe. The sterling pound is in third position in terms of currency reserve after the Euro and the States dollar.

Social factors

The countries population is approximated to be more than 63 million with a very high density. It has a large literacy rate that is more than ninety nine percent. A majority of the population is white which comprises 92% while blacks are 1.2% while Southern Asians make up 4% of the population. The United Kingdom has an aging population. The country has a very social society comprised of people and workers from all over the world

Technological factors

The country is science oriented.  In addition, it is responsive to the latest technologies in the market. All the different features and segments of the country are integrated with the latest technologies.

An examination of states has revealed that they all have favourable conditions for investment. Each of the counties has its strong suit and flaws with China being its large population and cheap labour. The United Kingdom is it literacy levels, an open and social culture with very low poverty levels. While Brazil has a fast growing middle-income class and its immediacy to States. Although all the countries, a suitable for investment the best country that the company should invest in is China

Competitive advantage and weaknesses

Advantage

Unlike fast food chains, its outlets have reservation facilities that enable customers to book for their tables in advance. In a majority of its steakhouses, it offers both beverage and food on its menu, which allows its customers to enjoy their food with excellent wine. The company for the longest times has used gift cards to market its business. The cards are not only a useful marketing tool to attract and retain customers, and it also give a chance to individuals that others cannot afford its prices to enjoy the quality of food it offers. Another unusual element of the steakhouse is that most of its steakhouses have private dining rooms. The rooms offer customers privacy to dine with minimum or no disruptions. Another unique aspect of the company it provides the niche product. The restaurant is famous for its upscale fine dining that targets a particular clientele. Not many players in the industry offer a similar product especially in the international market. The niche product that it offers gives economies of scale more especially in a large market (Zou, 2011).

Weaknesses

More and more people, especially in newly industrialised countries, are embracing fast foods. Due to their busy work schedules, individuals are looking food that they can quickly grab on the go, and most fast food restaurants offer this option. Such restaurants may pose a challenge given the company does not have fast food on its menu. An increasing number of families with children avoid restaurants with beverages on their menu. Given that its restaurants have beverages and it being an upscale dining outfit deters most families with kids that may be seeking a place to have their dinner. With an increasing number of people, developing and succumbing to lifestyle diseases people have started to shift their focus to nutritious foods. This trend can have an adverse impact on its business strategy of offering prime medium or rare steaks with fine wine. A characteristic of the restaurant that is a major weakness is the fact that its outlets offer only dinner. To successfully penetrate the Chinese market, the company should consider offering both lunch and dinner. Although it has a strong presence especially in its core market, its brand recall is restricted due to low marketing and advertising exercise. This strategy should be reconsidered when the company is establishing new outlets, especially in the international market (McManus, 2007).

Recommendation

The Chinese would be the ideal country for Ruth’s Chris steak house to set up shop next. There are numerous reasons that make China the ideal target compared to the other countries. Ruth’s Chris Steakhouse already has knowledge of the market. Although semi-autonomous Hong Kong is in China and the steakhouse has two restaurants. With the experience in the Hong Kong, it would be easier for the business to transition into  China. The same suppliers of beef that currently uses in Hong Kong can be utilized on the Mainland. If it wants to open company-owned restaurants, It would be easier for it to train its staff due to is Hong Kong presences. At the same time, if it were to free franchise in the Mainland it can seek advice and assistance from the current franchises in Hong Kong. Apart from its existing experience in the market, the company would enjoy high skilled and relatively cheap labour.

China has the lowest minimum wage in the emerging market and with a population of more than a billion people the company would have a rich pool of talented and well-educated individuals to choose from as employees. Currently, China has fifty million millionaires more than any country in the world. The increasing amount of millionaires and an expanding middle class that now stands at more than half a billion people would be a big and ideal target market for the company. With its significant population, cheap labour, broad middle class and ever-expanding economy, the country has the potential to the company’s core market even surpassing the United States. The company should venture into the Chinese market with a mixture of company-owned and franchisee-owned outlets. Initially, it can concentrate on the four or five biggest cities but once it has established itself, it can spread to the smaller. Given the sheer population of the country the company can have a presence in more than ten cities (Glowik, 2011).