International Management Behavior

Mayfield Accilien

June 05, 2013

Capstone Project

Entering the Chinese Market.

With a population that exceeds 1.3 billion people and a land mass larger than the United States, China's sheer size and scale presents challenges uniquely distinct from any other market. The challenge of China market entry has become an increasingly important one of Western companies of all shapes and sizes. Despite a difficult economic climate in Europe and the United States, China’s economy has continued to grow by double-digit rates over the last couple of years. With the country poised to overtake the US as the second largest global economy by 2020 and destined to remain an engine of global growth for the next decade, understanding how to enter large and complex market has become critical to most companies in the B2B sphere.

Entry mode often depends on a number of factors, including industry landscape, the geographical size and scope of the market, whether the company plans to manufacture locally or import its products, and the level of on-the-ground sales and technical support required by customers. Breaking into the China market successfully can seem like an almost impossible task to foreign companies with limited or no experience of doing business here.

China as a huge potential market, where great opportunities lie and their accessibilities can be extremely challenging. China’s market is not uniform and /or Homogenous. It is politically unified, but has uneven rate of economic growth in different province. As shown on the graph below. There are many different regions in China at various levels of sophistication. Similarly, just as there is not only one market entry strategy in China, there is more than one type of buyer in China. Experienced and successful companies know that China is not one market, and they have learned to analyze and segment the various areas. To be successful, companies will need multiple point of entry and may need to combine various market entry...