3. China Market Analysis3
3.3Competitors in the market6
3.3.1 indirect competitors7
3.3.2 direct competitors7
3.4 Barriers to entry- Porters Five Forces Analysis8
4. USP of chemical products logistics9
5. Marketing plan9
5.7 physical evidence12
8 .Reference list15
1. Executive Summary
This report assesses the feasibility of launching chemical products logistics, a transport service related to dangerous goods in China. In order to evaluate the viability of this proposition from a comprehensive view, an in-depth investigation has been done to analyze the target market and competitors,through to the application of some business tools like PESTEL, Porters 5 Forces and 7 Ps, to make the research more professional and reliable. Consequently, it has been determined that despite the fact that competitive rivalry in the existing road freight sector is relatively high, the chemicals logistics are more likely to be succeed since it focuses on a segmental market with specialist knowledge, helping to earn competitive edge over other competitors.
Considering that although having been affected by euro economic crisis, China still maintains a high increasing growth rate compared to others countries. By launching a business in a country which I am familiar with, and with a stable economic environment is a considered decision. A transport service was selected because I had the access to such line of business in my childhood and have gained sufficient experience related to logistics to date. Besides, China is a country with vast territory and abundant resources, but the distribution of resources is fragmented, which means that the transport services are and will continue to be a promising industry with a huge demand. Logistics, especially for chemicals, is a high risk service and immature business which has relatively few existing competitors and, most important, has large room to be improved as well as the considerable profits. Customers of chemical industries and chemicals retailers, are able to enjoy the service by getting in contact with companies through telephone, fax or ordering on Internet. In order to provide a reliable and effective logistics service, suitable storage premises should be arranged for protecting the security of chemicals. Besides, the packaging of these chemicals should be strictly checked before loading them on trucks. Furthermore,during the delivery process, the status of chemicals and the position of goods should be reported to the customers regularly, ensuring that the customers can track their goods at any time and place. The most important thing is that staff should be strictly trained to be qualified in chemicals delivery.
3. China Market Analysis
Table 1: China road freight sector value: $ billion, 2007–11(e) (datamonitor 360, 2012)
Figure 1: China road freight sector value: $ billion, 2007–11(e)(datamonitor 360, 2012)
Datamonitor 360(2012) indicates that although there is a decrease in the year 2010 due to the banking crisis, the growth of Chinese road freight sector has still increased dramatically in recent years. Specifically, the total revenue of Chinese road freight was$313.5 billion in 2011, "representing a compound annual growth rate (CAGR) of 10.4% between 2007 and 2011"(ibid). Therefore, we can conclude that the economic environment in road logistics is satisfying, the transport industry is expected to have a high development rate in the next few years, which means that this is a favorable time to enter the market. Fu et.al (2011)state that "China’s logistics infrastructure has improved significantly during implementation of the country’s eleventh Five-Year Plan (2006-2010)". With the positive support from the...