...Since China opened pathways for foreign markets in 1978, its economy has boomed and has today the fastest growing and the most dynamic economy in the world (The New York Times, 2012) Growth has been steered by heavy investment in areas such as infrastructure, manufacturing and exports. according to The Economist (2007), Modularization (breaking manufacturing of single products into separate units) and Outsourcing to cheaper options has allowed some Chines manufacturing companies to become more flexible and competitive, hence achieve global economic power. Teagarden and Cai (2009) however, investigated Chinese multinational’s overseas success and identified four different evolutionary phases: The Learning, Build-up, Internationalization and the Globalization phases. This essay will examine these phases and outline key factors that has enabled Chinese companies to succeed in foreign markets. Chinese companies belong to a diverse range of industries from being amongst the leaders in Telecommunication and consumer electronics, to accomplishing a tremendous position in the banking sector (Teagarden and Chai, 2009). These companies carry unconventional names like Lenova, Huawei,TCL and Haier however are the brains behind many of our household goods such as computers, televisions,phones and refrigerators. Common success factors between these companies outlined by Teagarden and Chai (2009) are the investment in Human Resource management and strategies...
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...Joint Ventures 6 Foreign enterprises 7 Corporate Level Strategy: 8 Business Level Strategy: 9 Conclusion: 10 References 11 Annexure 12 Executive Summary: This is a Case base scenario of Shanghai Automotive Industry Corporation (SAIC) and the General Motor Company (GM). The world’s largest automaker, traces its roots back to 1908. With its global headquarters in Detroit, GM does business in some 120 countries. The General Motors-China relationship dates back more than eight decades. GM China’s vision is together with its partners to be the best automotive group in China The joint venture between General Motors (GM) and Shanghai Automotive Industry Corp. (SAIC) in 1997 was regarded as the largest single foreign investment ever made in China. The joint venture was considered by many as a high-risk investment for GM at that time. Eight years after signing the joint venture, GM proved to the world that its investment in China was justified, with its growing market shares and successful partnership with SAIC. Attempts to understand the strategic alliance between GM and SAIC and how the relationship contributes to the success and rapid growth of GM in China. Also analyzes the strategies adopted by GM and the potential threats and challenges imposed on foreign automobile companies in China. Sheds light on devising viable strategies for foreign companies to enter emerging markets. Shanghai General Motors Co., Ltd. manufactures and markets...
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...transportation, technologies, communication as well as genetics have made the world a smaller place. Anna Lindh quoted that “Globalisation has made us more vulnerable. It creates a world without borders, and makes us painfully aware of the limitations of our present instruments, and of politics, to meet its challenges.” Initially, globalization is commenced merely for transfer of goods. However, nowadays, services have also been transferred worldwide. As a result, we are capable of traveling to other country within hours which initially took days even months. Besides that, computer networking and fax have allowed business to conduct negotiation and money transaction within few minutes. According to Allen Hammond, globalization also brought about the spread of democracy as well as the decline in military conflict. With respect to the advantages, for consumers, indeed, globalization is capable of adding value to society. In producer point of view, globalization also assists business overseas expansion by providing information as well as easing its performance through the advancement of the technologies and communication. However, although full information is provided, business expansion is not as simple as we think. Research’s statistics have shown that % of new business going global failed, and % are faced with extremely hard time in global market penetration. Therefore, before expanding business overseas, company should really take into account the importance of strategies...
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...across the world have different preferences with regard to new and existing products. In this regard, this paper seeks to analyze different cultural perspectives portrayed by consumers. It will address the manner in which the Japanese market reacted to the introduction of Apple’s IPhone which was considered as genius products in some parts of the world. On the same note, the paper will focus on how Hong Kong consumers received the conservative shark’s fin soup. IPhone in Japan While introducing the product (IPhone) to the Japanese market, Apple, the company banked on the success stories of other products that had performed relatively well in that country. These were IPods and computers. Furthermore, projections had placed the sales at more than a million products. However, that did not happen. The products were not positively received in the country despite good features that manufacturer thought would suit the Japanese market (Kane, 2008). One of the biggest mistakes made by Apple was the reliance on the 3G platform that the product had. Japan conventionally had been accustomed to phones that offer 3G internet. This meant that all other phones in the market had been installed with the 3G internet and IPhone did not amuse them. Another flop was evident in the touch screen concept installed in the IPhone. According to Japanese consumers, that feature was cumbersome to use. The reality within the Japanese market was that most of the phones sold in the market had some of the most...
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...prices, China was still the ideal location for Wal MartWal-Mart to continue to thrive within the foreign market. Wal MartWal-Mart quickly started gaining the trust of the local government and local officials in order to expand quickly. By using local venture partners, Wal MartWal-Mart was able to bypass the government’s opposition to foreign businesses opening. Wal MartWal-Mart further was able to gain the trust of the local government byut allowing the All China Federation of Trade Unions (ACFTU) to operate within it’s stores in the countryover there, something that here within the United States Wal MartWal-Mart does not allow. Being able to offer China’s exports within its it’s own country, Wal MartWal-Mart is able to save money from the exporting and importing fees that are normally associated with its’s super centersupercenters, t. Thus creating a substantial gain in its earnings. Comparing China to the United States, the per capita is allowing Wal MartWal-Mart to draw the conclusion that it will be as equal to the United States when it comes to the success that it hopes achieves. II. Questions & Answers 1. What were some of the reasons behind Wal-Mart’s entry into the Chinese retail market? 2. Answer. The company needed to grow. With the huge success Wal-Mart had within the United States, they knew if they wanted to continue to grow, they would have to expand internationally. The United States only has approximately four percent of the worlds’...
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...Personal Computer Division of IBM, the company that invented the PC industry in 1981. Today, Lenovo is a $21 billion personal technology company and the world's second-largest PC vendor, with more than 26,000 employees serving customers in more than 160 countries The choice of this company prompted me my recent visit to one of the factories Lenovo, in Shenzhen, and a huge impression on me that this visit was exerted. This well-organized corporation attaches great importance to the planning of its development and is very determined in its objectives. Position that the company has achieved on very difficult market of personal computers proves accurate transformation strategy from local leader into a powerful global player. Lenovo's position in any part of it is not the work of chance. The following sections concentrate on the discussion of Lenovo’s core competence and its globalisation strategy. Lenovo was originally called Legend Beijing, and was founded in 1984 by Liu Chuanzhi along with ten colleagues at the Computer Technology Institute of the Chinese Academy of Sciences (CAS). With an initial investment of 200,000 Yuan, the company was established with the aim of commercializing the research and development activities conducted at CAS. In 1990, Lenovo manufactured its first PC and within a decade it grew to become the leading PC manufacturer in China. By the end of 2003, Lenovo captured a 27 per cent market share of the PC market in China. In the fiscal 2003, Lenovo manufactured...
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...Finance How to be Competitive in Chinese Automobile Industry Jianhan Zhao Shanghai University of Finance&Economics, Finance Engineering Shanghai, 200433, China E-mail: dorazhaojh@hotmail.com Lei Gao Liaoning Shihua University, School of Mechanical Engineering Abstract Chinese market has a great demand for foreign cars, and a great many foreign automobile companies are competing for their market shares here. The most representative ones are Volkswagen and Honda, they adoped different market strategies and they both suffered some success and failures With so many competitions, the future of Chinese automobile industry is hard to predict. Keywords: Market structure, Industry structure, External challenges, Three joys, Source and supply chain 1. History background After the reform and open policy, China’s economy has been increased rapidly, and there was a great demand for cars. But the domestic automobile industry was not that developed at that time and could not meet with such a great demand. So in the 1980s, Chinese automobile industry started to join hands with the foreign companies and improve the technology. Among all the foreign companies, the most typical and successful ones are Volkswagen and Honda. The Volkswagen Company started to enter the Chinese market in 1984 with production base in Shanghai. It is one of the earliest manufactures set up business in China. And it set up another joint venture in Changchun in 1990. Until today , the company owns...
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...Study Objective----------------------------------------------------------1 1.2 Current Study-------------------------------------------------------------------------------------1 2. Localization----------- ---------------------------------------------------------------------------------3 2.1 The Definition of Localization ----------------------------------------------------------------3 2.2 The Importance of Localization Strategy to Transnational Retailing---------------------3 2.3 Three Layers of Localization for Transnational Retailing----------------------------------4 3. Retail Transnational in China------------------------------------------------------------------------7 3.1 The Status Quo of Chinese Retail Environment --------------------------------------------7 3.2 Opportunity and Threat Analysis --------------------------------------------------------------8 4. Localizing Strategies in China Based on 3 Layers-----------------------------------------------12 4.1 Localizing the Strength -----------------------------------------------------------------------13 4.2 Localizing Marketing Mix (4Ps)...
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...Student Shanghai University Marketing Report Example of Wal-Mart Summary I.The Chinese Retail Market A. Analysis of the Chinese Retail Market B. A picture of China’s Retail Market : facts & figures II. Wal-Mart in China III. Wal-Mart suggested business model in China A. General Analysis B. Suggestions I. The Chinese Retail Market China is first of all a demographic power: 1 human being out of 5 is living there. It is a permanent member of the United Nations Security Council is in possession of the nuclear weapon and recently shoots down its own space satellites: this makes from it also a military power. As a matter of fact, China is replacing Japan as the diplomatic focus in Asia, and above all as the economic focus. Indeed, industrialized countries must take into account anew economic power and inevitable partner, all the more as it is a member of the World Trade Organization (WTO) since 2001. As a consequence, a good many foreign groups have decided to gain a foothold in the Chinese market, which is not an easy thing. We will firstly mention the opportunities and the obstacles which feature the Chinese retailing market. Secondly, we will try to establish a picture of this market, with its main current facts and figures. A. Analysis of the Chinese retail market China is today part of the WTO, entailing progressive liberalization of the market. Nevertheless, this does not mean that it has become easy to set up in China. There are...
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...Possible topic : How Joint Venture has acted as a successful navigation in China <All about GM> * General Motors Company, commonly known as GM, is an American multinational corporation headquartered in Detroit, Michigan, that designs, manufactures, markets and distributes vehicles and vehicle parts and sells financial services. , * General Motors acts in most countries outside the U.S. via wholly owned subsidiaries, but operates in China through 10 joint ventures, including Shanghai GM, SAIC-GM-Wuling and FAW-GM. * The company manufactures most of its China market vehicles locally. Shanghai GM, a joint venture with the Chinese company SAIC Motor, was created on March 25, 1997. The Shanghai GM plant was officially opened on December 15, 1998, when the first Chinese-built Buick came off the assembly line. The SAIC-GM-Wuling Automobile joint-venture is also successfully selling microvans under the Wuling brand (34 percent owned by GM). Much of General Motors' recent growth has been in the People's Republic of China, where its sales rose 66.9 percent in 2009, selling 1,830,000 vehicles and accounting for 13.4 percent of the market. (This is what a microvan looks like) * * Buick is strong in China, being led by the Buick Excelle subcompact. The last emperor of China owned a Buick.The Cadillac brand was introduced in China in 2004, starting with exports to China. GM pushed the marketing of the Chevrolet brand in China in 2005 as well, transferring Buick...
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...FDI strategy vs. gaining competitive advantage in foreign markets- the case of Lenovo FDI in theory FDI is one of the options companies have while considering doing business abroad. The other possibilities are exporting and licensing. Licensing allows the company to use the property of the licensor in a foreign market. It’s intangible kind of intellectual property e.g., trademarks, patents, and production techniques. The owner of the license is charged a fee in order to receive rights to use the intangible property with possible technical assistance. Many time licensing allows companies yield high returns. The main threat for the investors using this mode is loss of potential returns from marketing activities and manufacturing Exporting stands for the marketing and direct sale of domestically produced goods abroad. It’s one of the most traditional ways of reaching foreign countries. This mode does not require production of goods in the foreign market, so no cost of foreign production facilities is needed. Most of the investments demanded in the exporting procedure have the form of marketing and logistic expenses, these cost are most of the time higher than those in the domestic market, since the exporter has to get foreign sales data and also know-how of marketing customs in target market Doing business in a foreign country calls for additional activities which incur additional monetary and human costs. Additional tasks are among logistics of co-ordinating operations across...
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...IBM Business Consulting Services IBM Institute for Business Value Strategy and Change Going global Prospects and challenges for Chinese companies on the world stage In association with IBM Institute for Business Value IBM Business Consulting Services, through the IBM Institute for Business Value, develops factbased strategic insights for senior business executives around critical industry-specific and crossindustry issues. This executive brief is based on an in-depth study by the Institute’s research team. It is part of an ongoing commitment by IBM Business Consulting Services to provide analysis and viewpoints that help companies realize business value. You may contact the authors or send an e-mail to iibv@us.ibm.com for more information. School of Management at Fudan University Fudan University was the first institution of higher learning in China to set up a department of business education, and was also the first in the country to resume its business education program after the reform and open-door was implemented in China. Over the past two decades, the School of Management at Fudan University has developed into an internationally well respected business school. This joint project with the IBM Institute for Business Value fulfills our mission to analyze business operations and national economic activities using advanced management theories, systematic methods, mathematics models and information technology. It is part of our commitment of timely research...
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...Foreign Direct Investments: Volkswagen’s Entry Strategy in China’s Car Market 21/1/2013 Content Page Table of Contents Abstract 1 Introduction 1 Literature review 2 Volkswagen rational for China – Dunning’s Eclectic Paradigm. 4 Conclusion 6 References 7 Abstract China is one of the most attractive destinations for Foreign Direct Investments in the world. It is first destination for Inward FDI among developing countries (WTO, 2012). China has developed second world’s largest car market after U.S.A. and has been the largest car producer in the world since 2008. German company Volkswagen (hereafter VW) is the world’s second largest motor vehicle manufacturer after Toyota Motor (CNN, 2012) and the biggest manufacturer in Europe. VW is one of the earliest investors and the biggest foreign car maker in China with 15% of market shares. This report, by applying relevant theories, such as Dunning’s eclectic paradigm or Hymer’s internationalization theory, will explain why VW Company decided to invest in China through joint venture rather than acquisition or Greenfield investment. Introduction Chinese car industry, as well as many other branches, is very young, although dynamic and fast growing. In 1978 Chinese government introduced policy of open doors which allowed foreign companies to invest and operate in China. Since then car sector has developed rapidly from an infant to a mature industry. Moreover, Chinese government provides various...
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...China’s pattern of exports 4. What role does foreign investment and foreign purchasing play? 5. So who makes the money on China’s export? 6. Identify the goods in which China is uncompetitive in world markets? 7. Does China succeed in all industries? Why of why not? 8. Are Chinese provinces involved in trade the same extent? 9. Can China succeed in all industries? Q1 Nowadays China is one of the world's top exporting counties and is attracting record amounts of investment from overseas. In fact, it is investing billions of dollars abroad. The collapse in international export markets that accompanied the global financial crisis of 2009 initially hit China hard, but its economy was among the first in the world to rebound, quickly returning to growth. The following export product groups represent the highest dollar value in Chinese global shipments during 2012. Also shown is the percentage share each export category represents in terms of China’s overall exports. 1. Electronic equipment: (25.4% of total exports) 2. Machinery: (17.3%) 3. Knit or crochet clothing and accessories: (4.4%) 4. Furniture, lighting, signs and prefabricated buildings: (3.9%) 5. Optical, technical and medical apparatus: (3.4%) 6. Non-knit and non-crochet clothing and accessories: (3.1%) 7. Plastics: (2.8%) 8. Vehicles excluding trains and streetcars: (2.7%) 9. Iron or steel articles: (2.6%) 10. Footwear: (2.3%) Some of the industries supporting these exports...
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...were renowned for their broad spectrum of consumers on a global basis. McDonald’s spearheaded global expansion with its first overseas outlet in Canada in 1967 and entering Japan in 1971. McDonald’s outlets experienced tremendous success in Japan with record breaking daily sales and speed of expansion in the initial stage. KFC similarly started global expansion early with its first overseas outlet in England in 1964 and entered Japan in 1970. However KFC was not as successful as McDonald’s and did not experience profit until six years after entry. KFC opened outlets in Hong Kong in 1973 which all were closed within two years. The company would eventually gain the confidence of Hong Kong customers ten years after its entry. There was a completely different experience in China for KFC. They were recognized as the leader in foreign QSR as well as a significant player in the Chinese restaurant industry as a whole, contributing 1% in the country’s total food and beverage revenues in 2005. In 2005 KFC outlets in China recorded an average on 1.2 million in annual sales per store, compared to just 900,000 for similar stores in the US. In contrast McDonald’s presence in China was less than half of KFC’s with a significantly lower estimated profit margin. Chinese consumers’ spending on eating out had increased tremendously along with the country’s economic boom in the past decade. Retail revenues of the restaurant industry increased from 5.2% in 1991 to 14% in 2007 as a portion of total...
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