Sweet Osmanthus Sauce Case Study

Submitted By chenyh629
Words: 2880
Pages: 12

Sweet Osmanthus Sauce
Osmanthus fragrans is a native species of Asia, distribute from southern China to Taiwan and Japan, and also includes Indonesia and Thailand. The flowers are white and yellow with a strong fragrance. Sweet Osmanthus Sauce is made from the fresh flower with honey and a dash of salt. It is widely using in Chinese traditional food making, such as rice cake and biscuits. Osmanthus fragrans also have medicinal value, the aromatic substances contained in it could relieve cough and asthma role. Sweet-scented osmanthus fragrant can eliminate mouth odor and efficiently kill bacteria, is a diet good for patient with halitosis (Chin Food).
Oversea market selected
We selected to bring sweet osmanthus sauce entering Perth. Perth is the main city of Western Australia which means more abortion and facilities, including supermarkets and retail stores. Our sauce will have more opportunities to expose and sale. Also Perth has many Chinese immigrates & people on working holiday. People on working holiday are mainly from China, Hong Kong and Taiwan. They will have higher adoption toward our sauce because they may try it before or they are regular users. And Australia is famous in honey making, sweet osmanthus sauce will have an opportunity to cross-manufacturing with a local honey brand. It can increase the sauce quality by using a better honey. Moreover, Western Australia is the second high earning state in 2012 (Figure 1). People in WA will have more disposable income and higher ability to buy relatively.

Company background
HuaQiao is a Chinese brand with 50 years’ experience of producing sauces. They are producing soya, spicy, vinegar and sweet osmanthus sauces etc. all around China. HuaQiao’s products manufacturing at Guangxi, Guilin. Osmanthus fragrans are abound in Guilin because of the weather and geographic location.
Mission Statement – to be an international sauces brand
There are no clear mission statement of HuaQiao. In the feasibility report, we set “to be an international sauces brand” as the mission statement of the company.
Corporate Goals
To devote at least 10% of gross profit between 2016 and 2018 towards feasibility studies, resulting in entry into Western Australia, Perth by the end of 2018
To have 5% growth in market share of Western Australia sauce’s industry between 2015 to 2017

PESTEL analysis
Australia – China Free Trade Agreement
The key interests and benefits of the agreement:
The removal or reduction of the tariff and non-tariff barriers affecting bilateral trade in goods, which could, in particular, reduce transaction costs and improve efficiency.
Reduction or removal of regulatory barriers which restrict services in order to support improved trade flows across goods and services of interest to both economies.
Implementation of measures to encourage more foreign investment between Australia and China, providing a firm foundation for the future economic relationship.
(DFAT, 2014)
Because of the benefits that agreement provided, there will be more and more Chinese brand entering Australian market, therefore the competition is keen.
Guilin agricultural subsidize
Picking & manufacturing osmanthus fragrans is in the agricultural industry, China Government will support and give subsides to company promote agricultural in Guilin. HuaQiao will have government funding in local primary manufacturing. Therefore, we will have larger capability investing in Perth’s business operating.
The value of AUD is increasing constantly, there are pros and cons of running business in Western Australia. If company directly import product to WA and sold it will gain the greatest profit in term of RMB. However, the logistic/ labor/ manufacturing cost in WA is higher in term of RMB. Company need more capability to foreign direct investment in WA, Perth.
Also the different economic condition in China and Australia, HuaQiao will has an advantage of producing primary product which is picking