Customer center

We are a boutique essay service, not a mass production custom writing factory. Let us create a perfect paper for you today!

Example research essay topic: Business Analysis Of Ford In China - 1,795 words

NOTE: Free essay sample provided on this page should be used for references or sample purposes only. The sample essay is available to anyone, so any direct quoting without mentioning the source will be considered plagiarism by schools, colleges and universities that use plagiarism detection software. To get a completely brand-new, plagiarism-free essay, please use our essay writing service.
One click instant price quote

Ford Motor Company is looking forward to celebrating its 100 th anniversary. In the past nearly 100 years, Ford has developed with the progress of car industry and become 2 nd largest car manufacturer in the world. Today, the American & European car industry faces problems of over-capacity and oversupply. This causes the intense competition in this industry. The world car industry is encountering its biggest changes in history. Globalization is the most remarkable among those changes.

We believe that the worldwide market competition causes the accelerating of globalization. This tendency makes the business environment more competitive and attractive. Ford should take the chance of globalization to enter other markets outside US. Some opportunities clearly exist. China has a huge family car market.

Ford should take this opportunity to enter the Chinese market. In this report, the PEST analysis is carried out on the Chinese business environment so that the following questions could be addressed: i. Whether the political, economical and legal system in China is favorable for our investment or not? ii. Whether the Chinese car market is big enough or not?

Will it keep on growing? iii. Whether Chinese consumers will accept our products or not? iv.

Whether the human resources in China is suitable or not? v. What are the benefits, costs and risks of producing family car in China? In conclusion, the report suggests that Ford should invest in China to establish a family car factory. Recommendations on this project are given.

BUSINESS ENVIRONMENT IN CHINA 1. POLITICAL ANALYSIS 1. 1 General China is in a state of transition now. Being a socialist country, China has carefully changed its political system in recent years, while dramatic changes have taken place in its economic system. In 1979, China started its open policy and economic reform.

The Chinese government persisted on carrying out the political guideline of developing economy and enriching Chinese people. In these years, although the leadership of this country had been handed over from Mr. Deng Xiaopin to Mr. Jiang Zeming and the world political environment had changed rapidly, the Chinese economy survived and kept going after the major world turbulence's such as the collapse of Soviet Union and Eastern Communist countries, the Tiananmen massacre in its own country in 1989 and the 1997 - 1998 financial crisis in Southeast Asia. Being the largest developing country in the world, China has achieved an average annual GDP growth of nearly 8 % in recent years. The living standard of Chinese people has been improving steadily.

Now there is a remarkable shift away from command economic system toward mixed economic system in China. Such a transformation has also affected the current state policy related to car industry. 1. 2 The Impact of Chinas Entry into WTO on Car Industry China has promised to break the tariff barrier on car-imported and spare parts after join WTO. First, there will be a drastic reduction in customs duties on imported cars from the current 100 % to 25 % by 2006. Second, the tariff on car parts will be reduced gradually down to 10 % in 2006. Third, the import quota system will be abolished in 2005. These measures will lower the costs of the car-imported.

Its no doubt that the reduction of tariffs will intensify the competition among the foreign and domestic motor companies in the future automobile market. Chinas entry into WTO will lead to a significant reduction on the cost of selling cars manufactured overseas. It may be a problem that we should take into careful consideration before we make a investment decision. However, the tariff reduction is in a gradual procedure stepped through five years, we should have time to occupy enough market share and gain reputation on our products in the first two years.

We can also make the price of our products very competitive even the car tariffs would slash to 25 %, because we can benefit from the relatively low labor cost and cheap spare parts in China. Generally, we tend to believe that WTO will not pose significant problem for our investment in China. China is successful in attracting foreign investment. The Chinese government has given some tax reduction policies for foreign owned companies.

These policies include income tax exemption in the first 3 years and another 2 years with half of income tax. On the other hand, the Chinese car industry has been protected by special policies that limit foreign investment, some examples are the local content requirement (40 %), the minimum share percentage (50 %) held by Chinese partners, etc. These policies might be unfavorable factors to our investment in China, but we can expect taking a turn for the better after China enters WTO. 1. 3 The Impact of Chinese Governments 10 th Five-Year Plan for National Economic and Social Development The Chinese government has declared its 10 th Five-Year Plan for National Economic and Social Development. Accordingly the Chinese National Economic and Social Committee announced the tenth Five-Year Plan for car industry and stated three principles in this document. These principles are self-development, fair play and openness. According to these principles, we can know that the Chinese government has the intention to introduce overseas capital and technology to develop its car industry.

The government is also keen on attracting and utilizing Foreign Direct Investment. 2. LEGAL ANALYSIS Legal system also plays a very important role in the international business. In order to establish a well-functioned market economy, the Chinese government has emphasized on drawing up laws. These laws include The Law of the P.

R. C. on Joint Ventures Using Chinese and Foreign Investment, Company Law of P. R. C. , etc.

China has a stable government, the protection of private property is adequate. China also has laws protecting intellectual property, but these laws are not well enforced by the authorities. The property rights (specially intellectual property rights) are routinely violated. Regarding the car industry, we think that also China has enough laws to protect our investment, it maybe not so easy to execute those laws. 3. ECONOMICAL ANALYSIS 3. 1 Macroeconomic Twenty years ago, China was among the worlds poorest countries, with 80 % of the population having incomes of less than US$ 1 a day.

However, since economy reformation, the living standard of Chinese people has changed a lot and most people are able to earn more and more money than ever before. From 1979, Chinas gross national income (GNI) per capita has increased rapidly (see graph 1), gross domestic product (GDP) has reached US$ 1. 1 trillion in 2000, and the foreign exchange reserve is also significant and has increased to US$ 190. 05 billion at the end of August 2001, which is the second largest country of the world. Meanwhile, the exchange rate of RMB has been keeping stable. All of these show the strong domestic and foreign confidence in current Chinas economy.

From 1997, the economy of almost all the countries in Asia had been influenced by the financial crisis, including China. Since then, China entered deflation. In order to stimulate economy and encourage consumption, the authorities adopted a series of financial and monetary policies. One of these policies is to reduce the interest rate. For instance, the average deposit rate per year decreased from 7. 47 % in 1996 to 2. 25 % in 1999, and the loan interest rate (over 5 years) from 12. 42 % in 1996 to 6. 21 % in 1999 (see table 1).

Accordingly, the deflation has been controlled. 3. 2 Microeconomics of Car Industry Nowadays, the consumer market of cars in the world trends to be saturated, and the overproduction of cars is about 20 million, while China has great potentialities of the cars market. From 1978, the number of cars in China has been increased by 12 % every year, which is a little bit higher than the rise of Chinas GDP. In addition, the growth rate of Chinas total car output in 2000 was 11 %, which was 7. 8 % higher than that of the world and ranked the ninth of the world (see table 2). The policy of reducing interest rate not only changed the consuming habit of Chinese people, who used to prefer saving money rather than spending them, but also improved the consuming environment. According to the survey made by China Consumers Association, except buying a house, peoples first choice to spend their money is to own a cars. This is phenomenon is good news for the constantly declined car industry.

GNI per capita of China Variation of Interest Rate of China from 1996 (Unit: annual rate %). 23 / 08 / 1996 23 / 10 / 1997 25 / 03 / 1998 01 / 07 / 1998 01 / 06 / 1999 Average deposit rate per year 7. 47 5. 67 5. 22 4. 77 2. 25 Loan interest rate (over 5 years) 12. 42 10. 53 10. 35 8. 01 6. 21 Table 1 (Source from China Central Bank) Car Output of the World and Top- 10 Countries in 2000 Ranking Country Output in 2000 Output in 1999 Growth rate % 1 United States 12, 810, 140 13, 024, 978 - 2 2 Japan 10, 144, 847 9, 895, 476 3 3 Germany 5, 197, 685 5, 237, 906 - 1 4 France 3, 351, 929 3, 180, 513 5 5 South Korea 3, 114, 998 2, 843, 114 10 6 Spain 3, 032, 874 2, 852, 389 6 7 Canada 2, 345, 882 2, 737, 454 - 14 8 China 2, 008, 500 1, 804, 500 11 9 Mexico 1, 918, 807 1, 518, 054 26 10 United Kingdom 1, 817, 059 1, 973, 028 - 8 The total output of the world 57, 539, 713 55, 742, 856 3. 2 Table 2 (Source from National Bureau of Statistics of China) Most of the world famous car-makers (including Ford) invested China since 1998. All their plants started production and sales within 1 - 2 years. The following chart (Chart 1) shows the car production in 1999 and the forecast for 2003 and 2005. As we can see from the chart, our major competitors are GM, Volkswagen and Toyota.

Although competing with these established market leaders is going to be very difficult, Ford should be confident to gain the market share and achieve good profit. Chart 1. (Source web) 4. SOCIAL AND CULTURE ENVIRONMENT ANALYSIS The survey of the basic condition of 150, 000 urban citizens in China that is made by National Bureau of Statistics of China shows every 10, 000 urban citizens just have 114 cars. Furthermore, a new research made by Roland-Berger predicts that the car sales in Chinese market will reach to 1, 000, 000 in 2005, and 2...


Free research essays on topics related to: spare parts, five year plan, car industry, chinese government, foreign investment

Research essay sample on Business Analysis Of Ford In China

Writing service prices per page

  • $18.85 - in 14 days
  • $19.95 - in 3 days
  • $23.95 - within 48 hours
  • $26.95 - within 24 hours
  • $29.95 - within 12 hours
  • $34.95 - within 6 hours
  • $39.95 - within 3 hours
  • Calculate total price

Our guarantee

  • 100% money back guarantee
  • plagiarism-free authentic works
  • completely confidential service
  • timely revisions until completely satisfied
  • 24/7 customer support
  • payments protected by PayPal

Secure payment

With EssayChief you get

  • Strict plagiarism detection regulations
  • 300+ words per page
  • Times New Roman font 12 pts, double-spaced
  • FREE abstract, outline, bibliography
  • Money back guarantee for missed deadline
  • Round-the-clock customer support
  • Complete anonymity of all our clients
  • Custom essays
  • Writing service

EssayChief can handle your

  • essays, term papers
  • book and movie reports
  • Power Point presentations
  • annotated bibliographies
  • theses, dissertations
  • exam preparations
  • editing and proofreading of your texts
  • academic ghostwriting of any kind

Free essay samples

Browse essays by topic:

Stay with EssayChief! We offer 10% discount to all our return customers. Once you place your order you will receive an email with the password. You can use this password for unlimited period and you can share it with your friends!

Academic ghostwriting

About us

© 2002-2024 EssayChief.com