Many of the larger environmental factors facing Li Ning are primarily social in the sense that as the population of china becomes wealthier there will be a trend away from brands which are perceived as local to those that are Global brands. Thus the move will be from Li Nig (which is considered a powerful player in the Chinese local market) to companies like Nike and Adidas. This will destroy the profitable domestic core of the business over the next 10 years and destroy the cash pool that is now enabling them to expand abroad. Political issues will also influence Li Ning’s development into a Global Brand. The Chinese structure of business is a major environmental factor in their development. As a communist country (also looking at the red annual report in the shape of China) it is clear that there are cultural issues, tied to their representation of China, which will present challenges when the company must compete with western brands that are not so politically bound. This culture is reflected also in the board of directors and their drive to promote from within. Looking at the company leadership there is only one board member who is not Chinese. This is a major challenge in their global brand movement. Another possible political issue revolves around bias perceptions of labor conditions. Internationally China is known as a sweat shop country. This could be an issue as Li Ning enters the global marketplace
The brand name, Li Ning, which represents 95% of the company revenue, is also an issue because the global environment and the perception of “Chinese made” as a moniker for “low quality product.” Li Ning is clearly a Chinese brand so some re-branding may be in order to avoid the association and address the global branding issue raised in the first paragraph. High tariffs on Chinese textiles are another component of this global image problem. In china anti-dumping export tariffs on textiles are 12cents a unit, 400% more than three years...