Mice Industry Analysis of Shenzhen China free essay sample

Purpose The purpose of this report is to analyze the MICE industry in a new develop area. The author have chosenShen Zhen, China to be the area where need to deeply analyzed. The analysis will include market share for surrounding areas and the characteristic in relation with both general and tourism development. There is also going to be an analysis discovering why investors would like to choose this particular area as their future MICE development. Apart from that, the author will also clearly state which type of MICE fits the best in this area for both current and future developments. Last, the author will evaluate the destination with PEST analysis in order to have a clear vision what are pros and cons of this area as MICE destination. The author will be gathering information from government data base online, in order to generates useful figures that can be analyze. The author will also do a site visit to Shen Zhen to discover more about this area in order to have more clear vision on the development of the city. 1. Background Information The city of Shen Zhen also known as â€Å"City of Peng† is a modern international city which also being foreseen as the next important economic city after Shanghai and Hong Kong. Apart from economic and the size of the city, the city Shen Zhen also coherent as the garden city, many plants and flowers surround the city. (Chinese National Geography 2012) On 26th Aug 1980 follow by the announcement of China state council; the city is then officially becoming one of the major cities among China. Its swift development has not only amazed China but also the world. Today’s Shen Zhen is a major technological development center, the fourth biggest terminal for both airplane and container ships. It is also a good tourist destination due to its good geographical location; the city is adjacent with Hong Kong. Many tourist travel from Hong Kong to main land by pass this city. The economic, business and tourism growth allowing Shen Zhen to become a pivotal position in China (Shen Zhen Gov 2011). The city of Shenzhen is located in the east coast of the Pearl River Delta, under the jurisdiction of Guangdong Province; it is adjacent to Hong Kong. The citys average altitude is 70-120 meters. The city area is 1,991. 64 m2, a subtropical maritime climate zone, warm seasons, plenty of sunshine and rich in fruits. By end of 2011, the city has 1046. 74 million of residence population and out of which 13. 22 million were migrate populations. The GDP of Shen Zhen is ranked 4th among China, the GDP growth rate is 10% and the average GDP per person is 18. 000 USD (CEINET 2011). The history of Shen Zhen is fairly short only 30 years of time, but there are some major changes amongthese 30 yrs. f time. However according to anthropology the movement history of mankind on this land can be traced back to 6700 yrs. ago. At dynasty of Song, the city of Shen Zhen has already become a major port for domestic transportation; it was the main pivot for transporting daily goods. Due to the loss of the war, the Shen Zhen have to be break in to a part and some of them were under control by the GB. The city then starting to be separate into two parts. One falls under the manipulate by the government of Hong Kong, and the other one belongs to China. Due to the transportation issues, a rail way that link between Guang zhonu and Kowloon is established and the rail bypass this city allowing it to be more of economic growth. Follow by the further development, on 2004, the city of Shen Zhen becomes first china’s no rural area city and its position same as the first line city. And maybe in the future it will be promote as municipality city like Shanghai, Beijing, etc (Shen Zhen Devp 2011). 1. 3 Reason The reason why author have chosen city as their MICE destination to analyze is because this city has being the next major center for both culture, social and economical development. Due to the location of the city, the tourism industry can be forseen as an important destination. Many of the development and growth will allowing this area to become a good MICE destination. And these development can bring large market segment. And which allowing the city to have swift growth in both tourism and events industries. 2. Findings and Analysis 2. 1 Cooperate market 2. 1. 1 Economic Zone The establishment of the Shenzhen Special Economic Zone has come into the golden age, the Shenzhen hotel industry as well as its international reputation development is now being steady and fast forward. In particular, the past 10 years, the development of Shenzhens star is bright constantly, matures, gradually from unity to the personalized features of diversified development, rich format makes the Shenzhen star hotel full access to the golden period. By the end of 2010, Shenzhen has been constructed over 55 five-star hotel, a total of 153 starred properties. The average occupancy rate in 2010 is 62. 44%, the Shenzhen hotel industry has involved more than 10 million people, with the annual revenue of over ten billion Yuan. In 2011, there were in total 8 senior standards properties grand opening taking place in Shenzhen , a total of 2,680 new rooms (sets) has come into service. During this time, the biggest highlight of the tourism market in Shenzhen is the start of the construction of a large number of luxury hotels. There are even more striking highlights in Shenzhens tourism market are being progressed. 2. 1. 2 Hotel Market People believe that the emergence of the super-star hotel is one of the remarkable symbols of prosperity within a region. It will dress up the city to a certain extent; improve the visibility of the city. More importantly, the emergence of the super-star hotel, will meet the needs of Shenzhen, an increasing number of high-end international business travelers. On the other hand, the government has just released the 15-year tourism development plan, and also to encourage the building more four-star plus hotels in the upcoming years. For Shenzhen hotel market, their main customer base is constituted with business individuals, FIT, groups and MICE (large-scale conferences and exhibitions). These tourists mainly come from the domestic individuals, because the development of international market are still in downturn. The main reason for this phenomenon is caused by the current business model of the hotel itself. Shenzhen as a special economic zone in China has been pursuing the development model of opening up to the outside world. However, the hotel industry started quite late. The main impetus of Shenzhen Special Economic Zone has been relied on domestic investment to attract foreign capital, after the past three decades of urban development. The best timing of hospitality industry development has finally come. The government plan is as follows. Firstly, to lay the foundation for their own domestic market, during this time, gradually attracting tourists from overseas in the development process. Which the construction of super five-star hotel is the hotel industry in Shenzhens efforts in order to attract overseas visitors. Secondly, to build the reputation around the world by taking opportunities of attending international fairs. Lastly, to comprehensively open the foreign market and seek for the best suited target market. 2. 2 Industries and Cooperation As the most successful Special Economic Zone(SEZ), Shenzhen has differentiated itself from many other mainland cities, for its predetermined positioning is not focused on natural tourism nor large-scale industry, but high-tech and financial industries, and these has promoted Shenzhen to be competitive and qualified to enter the globalization and to attract foreign investments. Consequently, due to the corporation of numerous world leading brands leaguing, convention and exhibition industry as well as modern design industry are developing rapidly, in 2008, Shenzhen was titled as World Design Capital (WDC) by UNESCO. . 2. 1 High-tech industry The excellent ability of creativity, expedient supporting environment and favorable established policies have dedicated the development of Shenzhens advanced technology industry. The production value, and Ramp;D investment are both ranked in top places in China, it has also achieved many laurels and nominations around the world. The mature fields of technology are communication, computeramp; Software, and pharmaceutical industry. ed by the Shenzhen High-tech Industrial Park(SHIP), there are various research institutes located in the high-tech zone, owing to the neighborhood integration with Hong Kong, the outpouring talents keep gathering together and contributing to the industry. 2. 2. 2Financial industry Along with Shanghai, Shenzhen is one of the two stock exchanges of China, the financial industry has always been the leading industry of Shenzhen, by the end of 2010, and the Global Financial Centers Index of London announced Shenzhen the 9th banking center in the world. The GDP percentage of Financial industry is increasing annually and stabilized in 2011. Besides, Followed by the opening of the branch of Nan yang commercial Bank in 1982, Shenzhen has attracted many Hong Kong owned international banks, by the end of 2006, there were 38 foreign financial institutions introduced in Shenzhen. 2. 2. 3 Convention and exhibition industry Shenzhen is one of the top MICE destination in mainland China, the Shenzhen Watch Fair has ascended to the third best exhibition around the world, besides, the development of jewelry and furniture exhibitions are also a representative success. In 2011, there were 102 exhibitions took place in Shenzhens Convention and Exhibition Centre. Apart from the great success in China, there were up to 9 exhibition brands (High-tech Fair, ICCIE, CPSE, and CIOE. etc. ) which achieved international certifications granted by Union of International Fairs (UFI). The Convention amp; Exhibition Centre is located in the downtown and covers an area of 220K square meters, equipped with multi-functions which can accommodate and host all kinds of business activities and shows. 2. 2. 4 Interested for investment in the location. SWOT analysis: S: 1). Well-educated professionals can provide any services in need. 2). The superior reputation has promoted Shenzhen to be international branding destination. 3). The geographic superiority is easy to be accessed by different means of transportation. W: 1). The city was first developed in the late 70’s; therefore the local culture and civilization are not strong and clear. 2). Local citizens do not speak many foreign languages, even English. 3). The limited capacity is not competitive compare to Beijing, Shanghai and Guangzhou. O: 1). Favorable policies established by central government which stimulated the development of the urbanization. ). The financial industry can easily attract foreign investments and the tertiary industry is green and stabilized, which generates enormous GDP. 3). The integration with Hong Kong has built a reliable strategic partnership, which results in many positive impacts. T: 1). The Financial industry is directly influenced by the global economy; Shenzhens economy can be shocked easily by any existing economic crisis i n the world. 2). The ever-increasing crime rate is hitting the reputation really bad. 3). Road transport is getting more crowed as well as the overpopulation. In summary of the SWOT analysis, the best-interested industry in Shenzhen is technology industry; the fabulous atmosphere and the outpouring elites are the driving force of Shenzhens tertiary industry. With the support of flowing capital, the development of the industry keeps growing steadily. The neighborhood relationship with Hong Kong has implemented Shenzhen to transform into a more similar projection, it helps Shenzhen to imitate and inherit its existing financial and technology industry. The location of Shenzhen is in the utmost condition, close to the sea but without many direct impacts caused by natural disasters. 2. MICE Type Due to the accomplishment of Shenzhen Convention and Exhibition center, Shenzhen is now capable for holding all kind MICE activities and enabled itself to attract international firms to place their head quarters here. There are many big public projects such like commercial and international trade center are currently in progress and hopefully to be esta blished in the close future, most of the projects are aiming to construct skyscrapers in order to maximize and enlarge spaces for conference center. As one of the largest commercial cities in south China, Shenzhen has close relationship in business with Hong-Kong. The convenient location also enables people from Hong-Kong to be engaged in business affairs in Shenzhen, language skills is also a plus since the residents in Shenzhen speak both Mandarin Chinese and Cantonese. 2. 3. 1 Meeting: Shenzhen is suitable for business projects as well as MICE since the market positioning is focused on welcoming foreign investments, therefore, the number of demands for meeting in Shenzhen city is growing up steadily. In order to adapt the huge demand, an increasing number of conference centers are being established. 2. 3. Incentive: The Incentive opportunities in Shenzhen city are quite limited. Because the capacity of Shenzhen is not competitive with other incentive destinations in China, even though there are many facilities and chambers can be relied on holding team buildings, there are not so many outdoor natural sights available in Shenzhen. This difficulty prevents Shenzhen from holding business incentives. 2. 3. 3 Conference: There are small quantity of conferences in Shenzhen city nowadays due to the limited size of businesses and available size of Mice facility. However, with the rapid speed of growing in business and Mice facilities, in the close future, this business door would be open widely to the world. 2. 3. 4 Exhibition: As mentioned before, Shenzhen is convenient for international and national companies to locate their head quarters. Since there are plenty of brand new exhibitors are imminently eager to present their products as well as making branding effect, one of the most favorable and common method to adapt all of these demands is exhibition. Therefore, the city has large demand from these companies. To conclude this part, the most suitable MICE for Shenzhen city at the moment are meeting and exhibitions due to the mentioned reasons. However, the city still has promising chances to develop other MICE in the future. 2. 3. 5 Marketing Tool The markets, a destination’s website are an important marketing tool for interest, understanding and substitute estimate. Thus, Shenzhen attracts for the business people as well as individuals because there are more industries established currently. Social media is becoming more important as tools for all steps of the consumption sequence in Shenzhen. There is some marketing tools are following ways: web presence, social media, direct marketing and advertising etc. however, the marketing tools that the journalists select for Shenzhen are social media promotion and advertising. Furthermore, the target market of Shenzhen is especially for businessmen, which are from different countries of commercial industries. Such as Tinton Sportswear, Kokma Industrial limited, Shenzhen Huayao Power limited and Shenzhen Himatch Technology Co. , Ltd etc. In Shenzhen will invest more in conferences and meeting as two segments in the future generation and it is more possible but no so popular in the field. Moreover, Shenzhen is the finest destination as the tourists and business industry and in the future they have more offer projects to establish. The media and advertising in Shenzhen is served by variety of daily newspapers, including the daily. 2. 4 PEST Analysis 2. 4. 1 Politic Shenzhen is the first Special Economic Zone in China. It is the first city to implement the policy of reform and opening up, it’s published two guideline documents indicating a shift towards reform of the political system recently. â€Å"The Shenzhen city government website published a draft document outlining a 19-point reform program for Shenzhen. The first 8 points focused on political, governmental and administrative reforms and the remaining 11 points dealt with the economy, society, education, health, and culture. †(Yujia, 2008). However, Shenzhen is attract foreign tourist and business in a global city of economics. In Shenzhen, the officials are promoted if they develop the local economy. Proposing political reform is a risky business with no certain benefits. (Yujia, 2008). The city of Shenzhen has their own economy in the city, which will not affect by other city in China. 2. 4. 2 Economic Shenzhen is located and in the south of Guangdong province in Hong Kong. It is the contact between mainland of china and Hong Kong. Shenzhen is the lead of high-technology development, financial service city in China. It is consisted special Economic Zone with a floor space of 2020 square kilometers and a population of 1. 9 million. Under economic liberalization policies of the 1980s, it’s carried out by reformist leader Deng Xiaoping, the city became China’s first and ultimately the most successful Special Economic Zone (SEZ). The economy in Shenzhen is growing faster and faster. It is one of the fastest growing cities in the world. Thirty years ago, Shenzhens total economic output was only 0. 3 percent of Hong Kongs, but now the proportion is 57 percent and in the next 5 to 10 years, Shenzhen will catch up with Hong Kong in a certain year. †(Peoples Daily Online, 2010). In the year of 2011, the GDP grows by 10. 0 percent to 1. 15. The total average annual economic growth of Shenzhen has reached 25. 8 percent, it is turning from a small town to a largest city in China. According the information, it shows the Shenzhen city economic is very stable and it is growing rapidly. Shenzhen placed second in global rankings of economic strength compiled by the U. K. Economist Intelligence Unit in March 2012. (Shenzhen Municipal E-government Resources Center, 2012). 2. 4. 3 Social Although Shenzhen is a small city and little visit by international tourists. However, it is famous for architecture, shopping, travel, restaurant and bars. Nowadays in Shenzhen city, the social enterprise is organized that applies to the commercial strategies in order to maximize the improvement in human and environmental. The city of Shenzhen has increased and build up by Shenzhen’s famous architecture, amusement park, museums and galleries, such as window of the world, splendid China Chinese Folk Culture Village, Happy Valley Theme Park, Minsk World, OCT East. Shenzhen is growing up rapidly from a fishing village to a small city and It is one of the city that attract international tourist in China. 2. 4. 4 Technology Since 1997, Shenzhen has grown into a period of speedy development, in which new economic records have been made every year. Shenzhen Hanging Electronic Technology Co. Ltd. It was established in February 1994 by Shenzhen Gas Group Co. Ltd and Hong Kong Guangmin Industry Ltd. (Shenzhen Hanguang Electronic Technology Co. Ltd, 2007). It is the first company, which approves international quality guarantee system, and the products have received various honors awarded from the customers and in the national. Shenzhen is the largest electronics manufacturers city that is located in China. Most of the products such as: Apple, HP, Samsung and Nokia among the companies are in Shenzhen. As most of the products and companies produce in Shenzhen. It is the largest and most influential exhibition of high technologies in China. 3. Conclusion Analyzing of all the information, the author have clearly conduct the feasibility study for implement the MICE market in to city Shen Zhen. The report also archive all the relevant analysis from the perspective of the market all the way till the MICE development type. Through out the studies of secondary data and information, and giving critical analysis and evaluations, the indication of proving that Shen Zhen has the capability to become the potential MICE destination. The city of Shen Zhen has the ability to host many of various types of MICE in cooperative market with other industries. The infrastructure of the city clearly stand out that this city is ready for a large income of visitors for MICE purposes. And the swift development of economy would boom the city growth in to another high peak point. On the other hand, the government also takes close attention towards Shen Zhen. Just after the new election of the Chinese State council, Chairman Xi has chosen Shen Zhen to be the first city to visit among the whole China. Clearly statement has also been noticed that the Chinese government would bring the city Shen Zhen in level with Shanghai and Guangzhou. Yet, Shen Zhen does not host big major meetings or having large input of MICE industry coming in. however the analysis have made its point, that the city Shen Zhen are ready to become one of the MICE destination in Asia. Lastly, the PEST analysis of Shen Zhen evaluates once again the city of its capability to become a MICE destination. The result present that this city is ready for MICE. Current Shen Zhen has already become the special economic zone for China and many of the high tech industry.