China: Market and Opportunity Analysis

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China:
Country Environment &
Marketing Opportunity Analysis

Aaron Golik, Jake Guldner,
Genny Guthrie, Emily Hales,
& Matheus de Paula Pereira

International Marketing
Dr. Dharma DeSilva
15 April 2013

Table of Contents

* Service Export…………………………………………………………………….....Page 3 * Demographic, Economic, and Trade Conditions…………………………………....Page 6 * Demographics……………………………………………...……………….……....Page 7 * Economics…………………………………………………………..……….Page 8 * Trade……………………………………………………....................…….Page 11 * Development Level and the Infrastructure……………………………….......…….Page 12 * Regulatory Market Entry Considerations……………………………………..…....Page 13 * Legal Considerations……………………………………………………………….Page 16 * Government Assistance…………………………………………………………….Page 17 * Sino-American relations………………………………………………..…..Page 20 * Target Market, Marketing Mix and Marketing Strategy……………………….......Page 22 * Marketing Plan…………………………………………………………………......Page 25 * Pro Forma Financial Statements (Budgeted Projections)……………….…Page 25 * Conclusion………………………………………………………………………….Page 27 * Works Cited…………………………………………………………......................Page 28

In recent years, China has emerged as the world’s fastest growing economy. Everyday multinational companies (MNC’s) are looking to, in some way or another, expand into the Chinese market; whether it is through product expansion, joint ventures, or acquisitions, it seems every MNC is trying to enter into China. Recently, Cessna Aircraft Company is one of those that have made the leap into China. By establishing two joint ventures, Cessna has expanded its reach and product line into the Chinese markets, and it is through this already established relationship that we see an obvious opportunity. Through the procurement of a partnership with Cessna and by utilizing their already established expertise in China, pursuing the opportunity to open and establish a Flight Training School within China is an endeavor that has the potential to capitalize on a growing need within the country’s borders. Service Export

On November 27th, 2012 Cessna Aircraft Company announced that they have entered into a joint venture relationship with China Aviation Industry General Aircraft Co. to assemble and sell their popular Caravan Turbo Prop aircraft (McMillin). Earlier in November Cessna also announced its plans to assemble and sell the popular Citation XLS business jet within China (McMillin). Aviation within China is booming and there is an extreme need for pilots. Due to China’s current lack of pilots and flight training schools, the country is being forced to look outside the county for established/certified pilots to fill the void (IAPA).

The Chinese government expects an annual increase in the nation’s civil aviation fleet of 11 percent each year through 2015 (IAPA). With that, the National Business Aviation Administration estimates that approximately 15,000 new professional pilots will be required within China by 2015 (NBAA). It is with this growing need for pilots, that China is currently relying on foreign pilots to meet their demand. With many companies within the domestic aviation industry experiencing layoffs and cutbacks, many pilots have to look anywhere they can to find work, and many are finding that work in China. According to the Civil Aviation Administration of China (CAAC), foreign pilots account for up to 6 percent of all commercially licensed pilots, and at some airlines 20 percent of captains come from other countries (IAPA). Roger Whyte, a resident Asia business aviation expert and special counsel to NBAA states, “The Chinese have an interest in building the [business aviation] infrastructure and in getting it right, there is no formal training program or career path that exists in China to develop pilots for business aviation” (NBAA).

Understanding the growing need for new pilots within China and how the country is currently...
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