Organisation Background

Company is a leading high-end smoothie and health food eating establishment that strives
to provide healthy and natural food products. Company mission is to be recognized as a
fun and healthy alternative for people on-the-go, creating a unique dining experience for
each customer. Company service friendly and inviting employees welcome customers with
warm smiles and positive attitudes while focusing on satisfying the needs of the guests that
walk through the door. All products are made fresh daily from high-quality, natural
ingredients.

All of the current company restaurants are located in the Malaysia; however, after
conducting and evaluating extensive research, company is primed for success at an
international level. I plan to take the first step in this endeavor by opening an overseas
market in Shanghai, China. The company primary target market is the health conscious
upper-middle to upper class 16-28 year old demographic. We are mainly targeting that fact
that most of these people are very accepting of “Malaysia” brands and trends, such as
healthy eating.

Introduction
Company product is a leading smoothie and health food establishment that focuses on
providing healthy options made from natural ingredients. Company mission is to offer
consumers great-tasting and better-for-you products. With over 70 locations across the
Malaysia, company product is recognised as a fun and healthy alternative for people on-
the-go. This product is not just an average smoothie shop – it also offers a variety of
nutritious wraps, sandwiches, and salads. Customers can indulge in a guilt-free snack, and
offers consumers the option to add a Boost to personalize their drink, giving them an
energized feeling. There is certainly something for everyone.

Based on my research, I have determined that there is no better location to establish this
product than the People’s Republic of China (here after referred to as “China”). Chinese
culture is becoming increasingly accepting of foreign markets, specifically those found to
be “hip” or “trendy” in the United States. It is widely known that “As Shanghai goes, so
goes the rest of China.” Shanghai, the most heavily populated city in the world, has a
population of 18,552,309 and is rapidly growing, which makes locating our store within
the city extremely important. Shanghai sets the precedent for popular culture in China but
still encompasses traditional Chinese culture.

When looking for an appropriate location, I searched the city for the area with consumers
who would be most accepting of company progressive brand. The Super Brand Mall is
located across the Huangpujiang River from Shanghai’s largest tourist attraction, The Bund.
This will provide a large variety of customers for company first product location. Super
Brand Mall is recognised as the epicenter of shopping, dining, and entertainment in
Shanghai with an emphasis on foreign brands. My proposed location is the perfect
foundation to expand company product throughout China and make the company brand
internationally known.

I plan on opening the international Jamba Juice branch on June 1, 2018. Opening at the
beginning of summer will give the new store the maximum amount of traffic since summer
is the season that Shanghai has the most tourists. Summer is also the hottest time of year;
therefore more people will be looking for a refreshing smoothie to cool down from the heat.

China has been a member of the World Trade Organization (WTO) since 2001. The WTO
is the only global international organisation dealing with the rules of trade between nations.
The WTO agreements are negotiated and signed by the bulk of the world’s trading nations
and ratified by their parliaments. Their goal is to assist the producers of goods and services
and to help exporters and importers conduct their business. China’s participation in the
organisation is one of the main reasons the Chinese people have become accepting of
unique foreign brands. One existing trade barrier is China’s Foreign Trade Law. This law
states that trading rights are to be automatically available through a registration process for
all domestic and foreign entities and individuals. China now allows any domestic or foreign
enterprise or individual to trade steel, natural rubber, wools, acrylic, and plywood. In
September of 2008, China announced that it had delegated authority for foreign retail outlet
approvals to the government. This is a very positive move in streamlining and facilitating
approvals for foreign retail outlets, which will greatly ease the introduction of our store in
Shanghai.
Analysis of the International Business Situation

Economic, political, and legal analysis of the trading country

The country’s economic system

Chinese leaders call their style of governing “market socialism.” The Chinese economy is
unique in a couple of ways. It is one of only five Communist nations in the world, and it is
the only one which has a relatively large GDP. China has managed this by combining a
market-driven economy with supposedly socialistic ideals. As of right now, the Chinese
government is not exactly focused on improving the lives of its people, but the government
claims that by helping a small portion of the population initially, it will eventually improve
the lives of all people. This policy has allowed the Chinese government to be by far the
most successful of any one-party style of government. The Chinese economy of today has
come a long way from being 100% publicly owned and self-sufficient.

Economic information
The Chinese people have grown tired of their low standard of living, and their government
has begun to respond. They have started to show signs of allowing the Yuan to appreciate
which would significantly increase the purchasing power and the general wealth of the
Chinese consumer. This increase in the disposable income of the people will create a
stronger desire and ability to shop at the Super Brand Mall. Besides the increase in foot
traffic, customers will also be more willing to stop in to our Jamba Juice and grab a snack.
With a little extra money to spend, we believe shoppers won’t just spend their money on
lunch but will also want to purchase a smoothie to go with it.

The trading country’s governmental structure and stability

China is currently growing at an unstable rate. China’s GDP growth is by far the largest of
the world powers and is only rivaled by newly developing Middle Eastern and African
nations. Such great growth is hard to maintain for a country with a generally weak
infrastructure and a population of 1.3 billion people. Despite these seemingly daunting
facts, Chinese leaders have the situation under control. China has some of the top economic
minds in the world and together they’ve realized what they must do to not only accomplish
their goal of providing decent lives for all Chinese, but also to stabilize their rapidly-
growing economy. With the current worldwide economic struggles, China is beginning to
realize it can no longer rely strictly on foreign demand to drive its colossal economy. China
has recognised that the domestic demand for their products needs to increase in order to
stabilize the economy. For this demand to increase, a rise in the disposable income of the
people must occur. One way the Chinese plan to accomplish this is by allowing the Yuan
to appreciate in the future.

Commodity prices, especially food, have gone up due to recent increases in consumer
demand and the government’s attempts to curb inflation. This increase in the price of food
could potentially pose some problems for the pricing of the products. However, these
increases will not be problematic for me as they will be short lived. China imposed these
controls on food in order to keep the prices under control. According to a top economic
planning agency in China, the National Development and Reform Commission, “The
country's commodity futures prices had declined since the government stepped up
measures to battle inflation.” China is also self-sufficient in most food production and
carries a large trade surplus. Together, this makes the country well prepared to deal with
the danger of rising world commodity prices.

Laws and/or governmental agencies

China recently set in place a new law regarding food. The Food Safety Law (FSL) was
brought into effect in June 2009. This law is a great improvement over the old complex
legal measures that China used to have in place. The FSL is very important because it
requires businesses in the food industry to limit their use of pesticides and food additives.

In 1978 China implemented the “Opening to the Outside World” policies, and since then
the Chinese gross domestic product (GDP) has grown over 9% annually. These policies
make it much easier for a foreign brand to open and prosper in China.

While my store will be privately owned and operated, it will be important to keep in mind
that some of China’s businesses are run by the state, and many are at least somewhat
influenced by a controlling hand. Although this fact may not be critical, it is worth noting,
simply because other businesses and consumers have a different political mindset than
what people from the Malaysia are used to.
Trade and cultural analysis

Geographic and demographic information

China is located in Southeast Asia along the coastline of the Pacific Ocean. It is the fourth
largest country measuring 9.6 million square kilometers with 18,000 kilometers of
coastline. China is bordered by fourteen other countries as well. China contains countless
plateaus, plains, basins, foothills and mountains, and has the longest river in Asia, the
Yangtze. Shanghai, specifically, is located on the east end of the Yangtze River Delta. It is
bordered by the estuary of the Yangtze River to the north, the Jiangsu and Zhejiang
Provinces on the west, Hangzhou Bay is to the south, and on the east by the East China
Sea. The city of Shanghai is composed of a sprawling 6000 square kilometers. Shanghai
experiences all four seasons, summer being the peak time for tourism.

The indirect competition of the store will have in the Super Brand Mall is Starbucks and
McDonald’s. Starbucks is known for their coffee and espresso drinks. While our store
offers coffee to customers, it is not the company’s main product. Unlike our product,
McDonald’s is known for their fast but fatty food. Even though McDonald’s has just
recently launched a new campaign which offers McCafe items such as cappuccinos,
frappes, and smoothies, our product focuses more on the health food aspect of their offered
products, especially the wide variety of smoothies. Therefore we will have a more
competitive edge when it comes to customers who are looking for a healthy and refreshing
alternative. With proper advertising and the opening of a new “Malaysia” store, is sure to
attract customers who are interested in new and upcoming health trends. Since our
company is widely known for their healthy food and drink options, it will have an
advantage over Starbucks and McDonald’s because like most people, the Chinese are very
health conscious and will want to choose healthy dining as a first option.

Market segment analysis target market

China has the largest population if all countries in the world at 1,330,141,295 people as of
November 2010. Shanghai is the largest city in China with a population of 18,552,309 as
of December 2010. The average age in Shanghai is 32. The vast majority of the Chinese
population is young adult to middle-aged. This fits perfectly with our target age group
which ranges from seventeen to mid-forties.
Our primary target market is ages 16-28, and our secondary market is 29-45. This target
market also includes the people in that age demographic that are upper-middle to upper
class. Our store will also use the fact the young-adults of our target group are very
interested in healthy-living trends. They are also prone to purchase “Malaysian” foods and
fashions.

The members of our primary target market are known for wanting to be “hip” and “trendy”.
As our store opening in Shanghai would serve as a new “hangout” in the Super Brand Mall
that serves exactly what these people want. Low calorie, healthy beverages and meal
choices are just what these people are looking for, and that’s just what we serve.

Analysis of the potential location

The potential location for opening would be in the food court of the Super Brand Mall
located in Shanghai. This mall is the most influential business and financial center in the
city and is known for its international style and urban shopping center. The mall consists
of thirteen floors and offers an area of 250,000 square feet. The Super Brand Mall has an
average weekday traffic of 180,000 persons and weekend traffic as high as 300,000
consumers.

Our store promises consumers daily freshness in all products. As a result of the 2008 food
crisis and the hard-hitting recession in bordering countries, China has begun to increase
their agricultural production of fresh fruits and vegetables to lead towards self-sufficiency.
Therefore instead of going through all the complex legalities and safety of importing fruit
and vegetables into the country, our store will buy them fresh, as needed, from local organic
farmers in the surrounding area.

Planned Operation of the Proposed Business

Proposed organisation

The opening of our store in Shanghai will be the first international company location. For
this reason, our Shanghai store will be owned by the parent company whose headquarters
is located in Kuala Lumpur, Malaysia. The company has been looking to expand into
international locations, and the opening in Shanghai will be the first of many to come. An
International Operations Representative will travel to Shanghai to complete the hiring
process, conduct interviews, and specifically select employees with the greatest knowledge
and skills necessary for each member’s team position. This representative will finalise
employee choices and inform and train the selected employees in each of their specific
areas, most important of which is the manager position.

The store takes great pride in having friendly, outgoing employees who are eager to assist
customers and are passionate about the company brand. We focuses on creating a unique
and memorable dining experience for each of the customers that walk through our doors.
There are four positions necessary for the smooth operation of each individual store
location. These include the Manager, shift leader, cook, and cashier. A fully trained and
certified Management Employee must train each of these regular employees to the
company’s satisfaction prior to the opening of the Store.

Managers are responsible for the overall operation of the restaurant including contacting
and interacting with the suppliers that have been selected. These employees must be
effective team leaders and assist in the training, development, and discipline of fellow team
members. They manage the business of the individual restaurant while offering outstanding
customer service, community involvement, and operational excellence. Managers must
have a minimum of five years of supervisory experience within a food company, and
college degrees are preferred. The members shall ensure that the operation of the store is
under the direct control of a manager at all times. The ideal manager will be a local citizen
of Shanghai with extensive knowledge of the culture and language.

As a shift leader, responsibilities include opening and closing the restaurant, hiring and
training new employees, and creating the schedule for operating hours, including individual
employee shifts. As with all the team member positions, shift leaders must maintain
positive relationships with customers, and a college degree is preferred.

Proposed product/service

Details of the products/services to be provided

The will offers a wide variety of smoothies, drinks, salads, and sandwiches. In the Chinese
culture, peaches, symbolizing longevity, and bananas, which symbolize education and
brilliance in work or school, are very popular fruits. Jamba Juice recognizes these benefits
and provides products with these fruits. Customers also have the option of adding a Boost
to their smoothie. These Boosts do everything from giving customers a little extra energy
to providing them with their daily vitamins.

My goal is to provide our customers with fresh, high-quality ingredients. I plan to do this
by using suppliers in the provinces surrounding Shanghai including the Jiangsu, Shanxi,
Zhejiang, Shandong, Guangdong, and Hebei provinces. They will provide the company
with a wide variety of fruits such as apples, pears, peaches, strawberries, oranges,
pineapples, bananas, and melons.

Transportation to/from the home country

The store relies heavily on their suppliers, especially those of their fruit and dairy. Their
goal is to consistently provide high quality products. In order to do this, the store will have
their fruits and dairy shipped in refrigerated truck to the Super Brand Mall location from
various farms in the provinces surrounding Shanghai. Transporting the goods by trucks is
the most practical option for the store. We will use the local transportation company which
will deliver our products directly to store.

The benefits that this would pose are immense, especially since I want our products to

spend as little time in transit as possible. By reducing the time that our goods spend in

trucks, I can ensure that we have the freshest ingredients possible. Costs involved with

using the local trucking system are relatively low, especially when compared to the costs

of transport by air. Not only are the costs significantly less expensive, but the time

associated with a trucking system is not much more than using air transportation. Using

the local trucking system will only take a few hours longer than transporting goods by air.

Proposed Strategies

Proposed pricing policies

The store locations prices for menu items are the same across the board. Our store will
accept payment in the form of the Yuan (China’s currency). Therefore we will price a
Sixteen at ¥23.06CNY, an Original at ¥29.65CNY, and a Power at ¥34.92CNY. (These
prices are all subjective to the current value of the Chinese Yuan compared to the
Malaysian dollar.)

Compared to the competition, Starbucks and McDonald’s, our store prices are relatively
higher than McDonald’s and only slightly more expensive than Starbucks, which is why I
will be using a competitive pricing policy. A medium smoothie at McDonald’s costs
around $2.50USD which is less than at our store. I do not foresee this as a problem because
of the difference in quality between our product smoothie and a McDonald’s smoothie. For
health conscious, calorie counting Chinese in our target market, the difference in nutritional
value between a Wild Berry smoothie at McDonalds and a Berry Fulfilling smoothie at our
store is staggering. As our target market is highly aware of their well-being, they are much
more likely to purchase a drink with fewer calories and fat even at a higher cost. The
impressive nutritional value of our menu along with the more elegant atmosphere will
attract consumers in our target market to come to our location and purchase our products.

Proposed promotional program

As the store name will not yet be widely known in the Shanghai area, we have created a
marketing strategy to promote awareness of the store name and logo to attract customers.
Our store Juice can easily comply with these laws as none of our advertising will defy any
of these standards.

Part of our promotional mix will include advertising within the Shanghai Metro in which
the station is less than a ten minute walk to the Super Brand Mall and is the closet stop. It
is a main source of transportation for our potential customers. Therefore advertising on this
area will help make the store name and logo recognizable and will create an impetus for
customers in our target market to try out this new brand. To help with organising,
negotiating, and implementing our advertisements, I have come to the consensus that hiring
an advertising agency is the most effective way to do so.
Another portion of our promotional mix is to advertise on a larger scale through television
advertisements. The Chinese government says that they have 1.2 billion viewers. This is a
huge number of people to whom we could expose the store name and logo. Specifically, I
will run an advertisement on the local Shanghai channels to reach our target audience. The
costs of running a television advertisement will vary based on time of day, how often, and
how long the time-slot is during which we run the commercial.

The store not only sells delicious food and drinks, but they also sell apparel. By selling
apparel such as tee shirts, hooded sweatshirts, and sweatpants bearing the store name and
swirl logo, the store will be gaining free publicity. In fact, as customers purchase the
clothing, the store is profiting fiscally as well as profiting from the additional benefits of
other potential customers seeing the name and logo.

The last portion of my promotional mix will be personal selling. Our well-qualified
employees will be in charge of offering additional products for customers to purchase at
checkout such as clothing, water bottles, upgrading in product size, or adding a boost. Our
employees must also have positive attitudes towards the store products as well as the
business in general.

Conclusion
In order to succeed in the new markets I also recommend the company to invest more on
research and development (R&D). I believe that if they can make their products have a
more futuristic design they will be able to conquer a larger share of the China market. I
also recommend the company to work on making their products more accessible to
households, so consumers can have store products in their homes and not only at shopping
malls. The company could achieve this through the use of social media like Facebook and
Twitter, as well as Skype and last generation gadgets like smartphones and tablets. Also, I
recommended that the company develop its website by focusing more on company product
details so that they could sell product to its customers directly through the website itself to
save more on costs. After careful analysis all the factors. I believe that China should be the
best options for future expansion for their open market, above average income and highly
potential customers.
The company does have a very bright future if the company is successful in the China
markets and gain lot of revenues, it has a great opportunity to expand and capture other
new markets which it as always dreamt of. By further diversifying its products and product
lines, the company could experience international expansions. Capturing other markets
successfully would allow the company to develop sheer goodwill and make the company
famous around the globe.