Essays on Jet Star Expansion into Chinese Market Case Study

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The paper "Jet Star Expansion into Chinese Market" is a good example of a marketing case study.   Economic advancements of Australia are taking a global perspective as major companies form mergers internationally. This is aimed at the exploitation of the global market after exhaustion of the local market coupled with the fact that there is high competition within a localized market. In a bid to open economies, governments have resorted to mutually reduce barriers of international trade and even agree on suitable customs measurers that support trade. This analysis uses recent articles as evidence of the globalization of the Australian economy.

It focuses on the different aspects of globalization and the factors that favor and those that hinder globalization. Jet star expansion into the Chinese market The Australian carrier Jet Star has recently expanded its services to Hong Kong that is according to The Herald Sun on March 27. This is in a bid to capitalize on the immense Chinese market. This news rose up the shares in the parent company, Qantas, as the shareholders became more optimistic about the new strategy of market expansion.

The move will create a co-ownership structure between Qantas and Eastern China Airlines in which both companies will contribute significantly to the startup capital. This is viewed by analysts as a very potent step for Jet Star to venture into the booming Chinese market and is noted to be a historic opportunity for continual expansion. China eastern airlines will also benefit from the development of cheaper flights which supplement its economic strategy of increasing exports. Development of expanded market by local Australian airlines is a constructive move for the government in opening up Australia as a destination for businesses and tourism.

This move will amount to increased Gross Domestic Product (G. D.P. ) for the government as indicated by analysis of the connectivity that is derived from the air transport network. In the European Union nations, it is estimated that the air connectivity increased by 10% and consequential increase of 1.1% was noticed in the GDP. This is evidence of the relationship between the increased interconnectivity to increases in GDP. Local businesses stand to gain by the significant value attached to the convenience of the interconnected air transport network.

In a study of the successes and failures of businesses by Cowen and Crampton (2003), nearly 80% of firms indicated that access to major national air travel hubs is vital to business success while 14% say it is important for market expansion. The interconnection of China and Australia with a low-cost carrier enables businesses to save money on air travel. Otherwise, it takes up to 23 % higher fare to make a non-networked journey, transferring between airports. Local businesses will have easy outsourcing for raw materials and other inputs from the most cost-effective suppliers.

The delivery of supplies by Chinese suppliers will become more efficient and timely, reducing the need to hold expensive inventories. They will also be able to exploit economies of scale by serving a bigger potential market. The move will also facilitate the spread of new production techniques and the attraction of high-quality employees from a broader pool of talent (Stokey, 1991). Air transport plays a significant role in creating sales by broadening markets for locally manufactured goods. Freight services link directly the movement of goods to new markets in China but more important is the passenger services which will allow the management to gain a greater understanding of market conditions across the two countries.

International companies will improve the efficiency of production and reduce costs. Averagely 80% of firms report that air services significantly aid in the improvement of efficiency in production. 70% of firms report that the larger markets created by the interconnectivity of air transport enable exploitation of economies of scale and reduction of costs by international suppliers (Gary, 1994).

The future prospects of air travels are only brighter making the move a more futuristic advancement in international trade. Half of the businesses surveyed in China indicated that they had expectations of substantial dependence on air transport services over the next 10 years. This contrasts with only 12% of corporations which projected diminishing reliance (Gary, 1994).


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