Sun Life Financial Case
SunLife Financial Case
Whyit was a good time for Sun Life Financial to Pursue China Market
Chinais a strategically important market. One of the reasons to supportthis claim is that the country is characterized by large market size.It is one of the most populous countries in the globe with many largecities. Besides, the purchasing power parity is strong which comessecond from the United States. Domestic consumption gives China ahigh potential to develop quickly. Lastly, with the new entrance ofnovel western products in the Chinese market, there is a huge marketpotential. Overall, entering the Chinese market guarantees a highprobability for growth and success of Sun Life Financial.
Thepotential opportunities for entering the Chinese market includestable government, friendly regulations, strong economic growth, lowgross domestic product per capital, high purchasing power parity,high unemployment rates, low inflation and strong infrastructure inkey cities. Nevertheless, there is high competition from both jointventures and domestic firms such as China Pacific and Ping An, highbureaucratic levels and business barriers and corruption.
SunLife Financial possesses the internal capability vital for takingadvantage of the opportunities and overcoming the threats. Thecompany has a good historical background and reputation. Itsexperience in the Chinese market and operations in difficult localesgives it ability to deal with the competitors. The financialbackground of Sun Life Financial is also favorable enough. Itencompasses public offering, investment, and revenues which wouldmake the company establish itself well and finance its operations upto the seventh year. The financial basis of the company would make ittake advantage of the infrastructure and technology, and employenough labor.
Ingeneral, the pros of entering China include: exploiting thestrategically positioned markets and wealth management due to itspartnership with Everbright. The cons encompass lack of a licence,unsteady environment due to modifying regulations, profits would onlybe obtained during the seventh year, and provision of all managementand technology required.
WhySun Life Financial choose Everbright Group to be their Partner
Jointpartnerships are one of the ways in which companies can enter newmarkets. For Sun Life Financial, entering into partnership withEverbright was based on various beneficial factors. To start with,Everbright Group is the leading brokerage firm in China. It meansthat the company has established itself well in the market. It is thesixth largest and one of the most respected and high-status firm inthe country. The advantage for this is that it has a high potentialin lobbying for licence from the government, which is a majorchallenge for international firms. Other factors include localexpertise and management, capital injection, and distributionsupport. All these factors are in favour of Sun Life Financial inentering China successfully.
TheAppropriate City to Choose
Thereare various factors which companies should consider while enteringnew markets. The fundamental criteria encompass purchasing potential,size of the market, and market growth among others. If I wereObannessian, I could choose Tianjin. The selection is founded on athree factor criteria, which include low competition, predictedgrowth, as well as low operating costs. Compared to Shanghai andGuangzhou, there is little competition in Tianjin as far as financialproducts are concerned. Although standard competition is deemed goodfor companies, high competition may be damaging. With littlecompetition, extensive advertising and promotion would not berequired, lowering the prices of products offered by Sun LifeFinancial. Tianjin is also characterized by low cost of operation. Itmeans little strain as less financial requirement would be needed.This would eventually lower the prices of products. Lastly, themarket growth rate is predicted to grow, and it would favour thecompany greatly.
MarkKen, Mitchell Jordan & Beamish, Paul W. SunLife Financial: Entering China.Ivey. 2005.