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Question

Students are to present an international marketing research report for architect service Exports into China for the firm 'Australian Architects Limited'. You are the International marketing manager and must evaluate the country market settings and assess the potential viability of international growth into China. Be aware of the changing environment and the impact on marketing activities in the international market such as 'the client experience'. Students are to draw upon the literature to highlight key areas where change is altering the international marketing activities and performance of the firm. Further, the impact of the Internet on international marketing performance indicators such as sales from international customers has become clearer in recent years and should also be a focus (Mathews, Healy and Wickramasekera, 2012; Mathews, S., Bianchi, C., Perks, K.J., Healy, M., and Wickramasekera, R. 2016).

Criteria reference assessment (CRA) is available through Blackboard.

Scenario: A well-established Australian company 'Australian Architects Limited' recently received some tender opportunities from international clients from China. The company is a medium to large sized company employing 200 staff. You, the international marketing manager believes that China may be a potential market for the firm. Further, the CEO believes the Internet may also enhance the firm's ability to generate profits now and in the future, but is unsure how. Can you help analyse and evaluate the potential for this country market? Further, can you also assess how the Internet might assist the firm in their international marketing activities of their product into China?

Research Question: Who would your customer be in China (eg businesses and or government)? How might these environmental elements influence the marketing activities and performance of the firm in China? What strategy might be most appropriate? How has the Internet influenced international client behaviour and/or business culture in China?

Solution

Analysis of Chinese Market for Architecture Products of Australia

Main Opportunities for the Firm in China

With the rapid growing urbanisation in China, the demands of foreign architects are increasing. Chinese cities like Nanjing, Shanghai, and Beijing are wealthy enough, and the government is also stressing on development at a rapid rate (Shira, 2015). The demand for infrastructure is real in China as nearly 400 million people are still to be moved to new houses and the required infrastructure that goes with it. Architects from foreign countries have various opportunities in categories such as cultural centers, retail/commercial, hospitals, education premises, urban transformation, hospitals, and old-age care facilities, warehousing, waterfront and marina development, resorts and leisure centers (travelchinaguide.com, 2016).

Formation of WOFE

The Australian Architecture limited can establish a Wholly Foreign Owned Enterprise (WOFE) on architectural design as a consultancy firm. All drawings and official documents which include permission drawings for the official tender drawings, local authorities, and execution drawings have to get stamped by a Local Design Institute (LDI) for approval (Lau, 2015). It is not necessary to keep a joint venture or cooperation with different LDI’s on a project basis.

China is the largest construction market in the world. China, India, and the US contribute 57 percent of all global growth of engineering and construction, which can add more than US$4.5 trillion to construction growth (Shira, 2015). China will only contribute US$2.1 trillion towards output and represent almost one-fourth of the construction activity worldwide, which is little more than its present levels (Song, et al., 2014).