Entering China was the best decision that was made by the sun life financial. This company had two major entries to the market of China, though the second entry, the one made in the year 1999 when the Chinese government gave the company the permission to apply for a trading licence. The entry to Chinese market was a masterpiece because it had a lot of opportunities that presented itself. Using the PEST and porter’s market analysis, there we many opportunities that were attached t it. Considering the political, economic, sociological a well as the technical opportunities that present themselves in the Chinese market (BA resources, n.p).
The four factors being considered in the case that include the political situation in a country, the economic situation, the sociological state as well as the technological advancements, each poses other subgroups that have to be taken into consideration. The entry of Sun Life Financial into the Chinese markets had a lot of advantages considering that China was centrally located, it had a large geographical position, being ranked the fourth largest country in the world with a 9.6 million square kilometers, which boasted of 23 provinces.
The land was also having a large population of 1.3 billion people, with the highest percentage being able to work. This was an excellent business opportunity which needed to be considered.With all these, Sun life was also faced with the real business dangers. The Chinese economy was under the influence of the strict communism economic effects.It meant that it posed a real danger to the entry of new business to the economy. The other problem was that not all the people presented in the economy were able to afford the services being offered by the Sun Life Financial.Another challenge was the problem of making huge losses in a country, far from home. This would further be worsened by the fact that the partner, Everbright might be tempted to indulge in corruption cases, considering its connections to the political people in the country.
With all these challenges that present themselves to the company, Sun Life Financial has the potential to overcome these challenges and make profits in this country. This is in consideration for its many years of service as well as the amount of financial muscles it has. The company has been able to amass vast levels of wealth that it can use to improve its terms and conditions of trading with the Chinese companies. There are various strategies that businesses can use to enter China.Some include their financial status, their political connections as well as their level of partnerships with other firms.
Sun Life Financial chose the Everbright company as a trading partner for various reasons.These reasons include the political connections of the company and the central government, the high levels of wealth the company has as well as the understanding between the company, the central and the local governments. Shanghai is one of the most populated cities in China.It also has a vastly growing number of amenities such as universities and other institutions.It also has the proximity to major airports and other traveling terminals ( Institute of Export,n.p).So, given the chance, I would choose Shanghai over Guangzhou. There are various strategies that can be used to determine which city is most appropriate for business. This can be through direct research; government reports as well as conducting research on the businesses.
Works cited
B.A Resources, Pest Analysis, Web 21 Feb. 2016 (http://ba-resources.co.uk/strategic-analysis-and-implementation.php).
