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Essay / Research Paper Abstract
A 5 page paper discussing the potential business opportunities in China. Specifically, a tobacco company is reviewing evidence to determine if they should set up operations in China. The advantages and problems of doing business in China are discussed. Bibliography lists 6 sources.
5 pages (~225 words per page)
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which to open a business. Whether or not to do that is a question Jackson Tobacco company is facing at this time. There are many reasons for Jackson to expand
operations to China, such as: * The laws regarding the sales and marketing of cigarettes in the United States have become increasingly more restrictive, thus the company needs new markets.
* There is a strong, open potential market in China and other countries in Asia. The Chinese population represents 20% of the Worlds population but it accounts for one-third (33.3%)
of the worlds smokers (Frankel and Mufson, 1996) * Currently only 4% of the Chinese cigarette market is held by foreign brands (Frankel and Mufson, 1996) * _ Jackson cigarettes
can sell for $1.50 per pack in China which is three times the price of national brands. * _ China reduced tariffs on imported cigarettes in 1993 (Frankel and Mufson, 1996).
* _ Although the government in the Republic of China has issued statements opposing smoking, tobacco and cigarette manufacturing at their government-owned plant represent 10 - 12% of their gross
income for the country (Frankel and Mufson A01; Nando 1). They are faced with a dilemma between the profits made and their concern regarding the health of their citizens which
they will not resolve in the near future. They cannot simply give up the massive amount of money the tobacco industry provides them. (Nando, 1997) The potential market is attractive
but there has been recent conflicting discussion in major financial publications that need to be considered. Basically, there are two primary theories regarding conducting business in China: the Economic Continent
thesis which supports the premise that companies do need to establish a presence in China and the Pacific Rim thesis which supports the thesis that the powers-that-be in China, despite