Political
Political influence plays a vital role in the success of international trade. The agreement between China and Australia is a political and economic decision that is meant to boost the trade between the two countries. The signing of the agreement means that Parmalat will experience a simple process in entering the market. Political difference is one of the problems that hinder effective international trade, which have overcome the signing of the agreement.
Economic
China’s economy is among the fastest growing economies, a factor that makes it an ideal target for international businesses. However, the government has been criticized for promoting protectionist policies that creates a barrier for effective competition with the local brands. Therefore, to counter such barriers, multinational organizations are often required to work extra hard to effectively compete with the local companies (McLachlan 2013). Parmalat will not only have to engage in extensive promotion, but also reduce the cost of production in order to sell the dairy products that are relatively low priced in China.
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Start My OrderTechnology
Expanding in new market means that Parmalat Company will have to engage in higher rate of production to meet the market demand. Technology is important to achieve a high rate of production, promote efficiency. Additionally, technology such as the internet and social media can be a strategy for promoting the dairy products in China and reach potential clients as well as for conducting market research (Garay 2012).
Social
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China has a totally different culture from that of Australia, which may cause some challenges in the new market. Although the high populations means a bigger market for Parmalat products, the company will still require to use brand promotion techniques such as advertising and giving sample in order to attract many buyers in China. Additionally, the free-trade deal enables the two countries to form strong and long lasting relationships.
Legal
The signing of the trade deal means that Parmalat will not be faced with legal issues that are mostly geared towards creating barriers. The high population in China gives advantage to the company because it will enjoy cheap labor. However, Parmalat should adhere to all the laws of the land including the labor laws in order to maintain a positive image in addition to avoiding expensive ligation process.
Environmental factors
Although China has not fully embraced environmental measures, there is still need for Parmalat to be environmentally conscious in its production. Apart from being environmentally conscious in its production, the organization should also take an active role in countering the various environmental issues affecting the community, this will also contributing to product promotion.
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