Global Business Environment

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Company background
Tang Dynasty Hong Kong (Holdings) Limited (“Tang Dynasty”) is a well-known traditional Chinese dessert and sweets company with numbers of stores in HK and China. Tang Dynasty opened its first shop in Centre Street, Sheung Wan District in 1885, over 100 years of history. Tang Dynasty is recognized and renowned as traditional, home-style healthy desserts stores. Over the past few decades, Tang Dynasty has developed into renowned dessert chain stores, providing healthy homemade style Chinese herbs desserts to local customers as well as foreign tourists. All local customers, no matter elderly or youngster, fell in love with Tang Dynasty’s desserts. All desserts in Tang Dynasty are good to human health and made by secret recipes of the ancestor of Tangs. Each dessert addresses to different kind of functions and could help in improving human’s health in Traditional Chinese Medicine’s aspect as all desserts are made by Chinese herbs. After years of efforts and developments, Tang Dynasty has positioned them as a Leader of Traditional Chinese dessert and has won the respect and appreciation from the domestic customers and foreign tourists. Over the years, Tang Dynasty has insisted in providing fresh and top-quality desserts to its customer every day. All desserts are made daily in its own central food production workshops and to deliver to each store every morning by its logistics and transport teams. Tang Dynasty has been widely recognised as an “100 years old store” with a notable reputation in catering industry, but to continue in achieving sustainable competences, Tang Dynasty has been developing new products, seeking innovation and to explore new markets among the world. Introduction:

Undoubtedly, international expansion is the key factor to business success. Tang Dynasty aims in expanding its chain stores to overseas market – London, UK. Whether or not the selected market (i.e. London) would be a good choice and when will be the best time to enter it, a company analysis and understanding of the selected market segments are very important. The report below provides an insightful detail regarding the external environmental factors of the selected market and a detailed analysis of Tang Dynasty in line with the expansion in international business operations.

PEST Analysis

Political (Legal) Factors

This is the important part of expanding business internationally as law and regulations will directly affect the viability of a company’s operations. Political risk assessment is an analysis of the political risks the company might face in its selected market. Tang Dynasty should acquire basic knowledge of the political structures of UK in order to control the company’s political risks (Ricky W. Griffin, International Business).

UK is a parliamentary democracy country with a very long history. There will not be any objection to say that UK is one of the attractive markets for businesses and/or investors. As its political and legal system are both healthy and it is a free market where government does not really hinder the foreign firm from entering into the United Kingdom. Also, Tang Dynasty is a Chinese desserts store and focusing in public market, as mentioned, UK is a free competition market; competitors from the domestic and foreign are great for sure, however, it is still optimistic as UK government might not favour the domestic sectors.

However, numbers of political risks that Tang Dynasty should be well aware of as these might cause a great loss. Everyone should know the tax in the UK is the highest among the top- countries in the world, whether or not to enter into this market, profit tax should be well considered as well as the relevant law and regulations of Minimum Wage adjusted every year due to the inflation of the country. Many people are of the view that London, UK should be a safe place for people to live, however, from the recent riots happened in the North...
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