Strategies for Competing in a Changed China

Entering an untapped international market can strengthen a business tremendously—but what if the costs outweigh the benefits for the market itself? China has long been an important player on the global stage, but recent advances in manufacturing, natural resources, and energy production have catapulted the expansive country to the forefront of international trade. Currently the world’s fastest growing major economy, China is set to eclipse the United States as the world’s largest economy by 2016. Among various domestic and international plays, one of China’s most fascinating uses of its

Naturally, when there are great gains to be had, there are great risks. A lack of understanding in cultural protocol is a commonly occurring pitfall for foreign, new to market business endeavors. Also, even positives such as China’s size, can commonly be a double edge sword. It is imperative for companies considering international expansion to create a solid entry to market strategy, which evaluates if the firm has any potential in achieve gains in a foreign marketplace.

China is the largest market in the world, and probably the hardest business environment. This narrative reflex China’s immense diversity, complexity, and its enormous competitive intensity is unrivalled versus the world.

Due to the large increase in globalization, many organizations relay on international business for competitive advantages. However, offshoring a business has never been easy especially if there are a lot of cultural, environmental and economical differences. China’s opening up to the world has not only made China’s economy stronger but it has also given many advantages to the outside world as well. Some of those advantages include cheap labor cost, risk sharing, economies of scale and less operational cost but to achieve these advantages it may takes plenty of time to observe new location, cultural training, and understanding of international business. As written in the article, “Red China, Red Tape: How to Start a Business There,” China

One example is that China’s one child policy has forced a generations of young adults to be sole providers for older family members, thus giving them less money to spend (Washington Post, 2015). To protect the market shares for domestic organizations, countries such as China, have attacked foreign multinationals. In one year, as many as thirty multinational organizations were placed under investigation. Thus, more and more multinationals are becoming cautious about their international affairs. In 2013, it was said that “at least 3,000 U.S. companies were victims of data theft and network disruptions” and many state-owned enterprises (SOEs) have gotten access to local contracts and markets which are unavailable to foreign firms (Washington Post, 2015). Due to such failures, companies are working to find the best international business model such as reshoring and localization. Therefore, according to the author of this article, “there’s money to be made for multinationals the world over, but they are going to have to rethink their strategies for making it” (Washington Post,

In fact, besides the three companies (Alibaba, Tencent, and Huawei) stated above, only Xiaomi, a smartphone developing company was able to go out of China in 2015. The lack of companies able to develop outside of China may imply a monopoly inside of China is at play as well as other countries are rejecting companies from China to enter to confront its policies. Even though the result of monopolies interfering the economy is minimized by the Chinese government because of price controlling is in the hands of the government, the cost of companies not being able to globalize impacts Chinese economy greatly. For example, as the market in China saturates, other countries’ markets become critical for companies to

China is reaching new levels making it a top choice for many global managers. China accounts for more than a third of global growth over the past seven years. (Legarde, 2015) The country has worked hard in creating economic growth and although it has been slow it has been successful. They are gaining on economic and financial stability. As a relocation specialist I would inform the global manager and his family what they can expect when relocating to China.

2016 is said to be “Record Breaking Year” for Chinese Investors. According to Forbes News, five major acquisitions of U.S companies and stakes totaled up to 28.16 Billion dollars. Yet, this was only a quarter of China’s entire outward investments in 2016. Many foreign firms suppose that China’s oversea merging and investing in next decade will reach tremendous amount, but it will not occur as they expected depending on Emma Johanningsmeier’s current event reports on Wall Street Journal about “New Chinese Regulations and wary foreign governments hamper M&A investors” in august 2017.

one are the days when companies looked at China as a monolithic land of 1 billion potential customers. Companies are now focusing on how to capture small segments of China’s giant market, and none of these segments is as attractive or as full of potential as the country’s rapidly growing—and multifaceted—middle class. As China’s economy continues to grow, more people will migrate to China’s booming metropolises to find better-paying jobs. These working consumers, once among the country’s poorest, will steadily climb

China's growing economy is not only gaining international prestige, but its confidence has soared as it continues to be the world's fastest growing economy for the past three decades. "China's rise as a manufacturing base is going to have the same kind of

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

2016 is said to be “Record Breaking Year” for Chinese Investors. According to Forbes News, five major acquisitions of U.S companies and stakes totaled up to 28.16 Billion dollars. Yet, this was only a quarter of China’s entire outward investments in 2016. Many foreign firms suppose that China’s oversea merging and investing in next decade will reach tremendous amount, but it will not occur as they expected depending on Emma Johanningsmeier’s current event reports on Wall Street Journal about “New Chinese Regulations and wary foreign governments hamper M&A investors” in august 2017.

China is becoming more westernised, particularly the ‘cosmopolitan’ city of Shanghai, where demand for Western products is increasing rapidly as disposable income rises in line with China’s strong economic growth. Michel’s wanted to establish a foothold in the market at an early stage to demonstrate a long-term commitment, which has been identified as essential to compete successfully in the Shanghai market (per Tim Harcourt, Austrade Chief Economist).

Fock, H K. Y. and Woo. K.S. (1998). The China Market: Strategic Implications of Guanxi. Business Strategy Review, 9(3):

Dr. Farok J. Contractor is a professor in the Management and Global Business department of Rutgers Business School, New Jersey. He has written hundreds of articles on the topic of international alliance and foreign direct investment. “Punching above their weight: the sources of competitive advantage for emerging-market multinationals” is one such article of global interest which has been declared of great value both for the public as well as for policy makers. The prime focus of this article is upon the phenomenon of emerging market multinationals which have swept the world by storm and introduced a whole new way of conducting global leadership and business. These emerging market multinationals are specifically discussed