Entry into Chinese Market - Case Study Example

Comments (0) Cite this document
Summary
Entry into China Organizations in any sector to survive and succeed have to expand its geographical and economic limits, without remaining “inert”. Organizations including retail firms cannot always depend on its domestic market to optimize its growth, and instead has to enter new territories or countries to tap good opportunities there…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.1% of users find it useful
Entry into Chinese Market
Read TextPreview

Extract of sample "Entry into Chinese Market"

Download file to see previous pages When they decide to enter newer countries, firms have to analyze both the opportunities as well as challenges, so that those challenges can be effectively managed. The first aspect they will have to analyze is the entry mode, so they can pick the best entry mode which has minimal risks, and this applicable to retail firms as well. In addition, they have to focus on the economic and legal aspects that could aid as well as impede them. China is one country, which has optimal opportunities for all firms including the retail firms like the fictional firm of Pesco. This paper will discuss the advantages as well as the disadvantages of entering China by the firm Pesco, focusing on the feasible entry modes, and how Pesco can or have to manage the economic and legal aspects. With the onset of globalization and the opening of the Chinese markets in 1990s, foreign firms particularly retail firms are more than eager to enter to tap the large prospective customer base. China being a country which runs on Communist principles, for most part of the 20th century, China raised an “Iron Curtain” and restricted the foreign firms’ entry, thereby protecting the indigenous firms. However, with globalization providing more opportunities to firms, and with its entry into WTO, Chinese government started to allow foreign firms into its territory. “Indeed, if we can identify a single moment when the ­Western-­dominated Globalization 2.0 gave way to Globalization 3.0, it may have been when China acceded to WTO membership on December 11, 2001” (Walker, n. d). Due to these developments, China particularly started lessening its trade restrictions particularly in the retail sector. The foreign firms for their part are enticed by the huge population of China and how they can be tapped as a huge customer base. “Most of the world’s major global retail firms are desperate to grab a slice of the world’s largest and most rapidly growing emerging market” (Gamble, 2006). In addition, the sizable sections of this population have high purchasing power. As the Chinese economy as a whole, is improving optimally, it has resulted in the accentuation of its citizens’ purchasing power, and for the retail firms including Pesco, this can be huge advantage. Because of this favorable business environment in China, Pesco can open its retail outlets. When it comes to the entry mode, Pesco can enter in the form of wholly owned subsidiaries. This entry mode can provide many advantages for Pesco, including in the economic and legal sphere. However, there are risks as well, when this mode is adopted. The first advantage Pesco can garner if it uses the wholly owned subsidiary option and not the joint venture option is the benefits from the new tax regime. The main feature of this new tax regime is that foreign firms as well as foreign firms having joint ventures with Chinese entities have to pay land-use taxes, which is equal and even more than the indigenous Chinese companies and foreign firms’ subsidiaries. That is, in under the earlier favorable tax regimes, the foreign firms including joint ventures were given exemptions from the land-use tax, and were also given permission to construct infrastructures on non-taxed lands and function in them. However, in the new tax structure, foreign firms’ tax payments have been even tripled from the old rate. That is, “in large cities the annual property tax rate will range from 1.5 ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Entry into Chinese Market Case Study Example | Topics and Well Written Essays - 1250 words”, n.d.)
Retrieved from https://studentshare.org/business/1444725-advantages-and-opportunities-for-a-specific
(Entry into Chinese Market Case Study Example | Topics and Well Written Essays - 1250 Words)
https://studentshare.org/business/1444725-advantages-and-opportunities-for-a-specific.
“Entry into Chinese Market Case Study Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/business/1444725-advantages-and-opportunities-for-a-specific.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Entry into Chinese Market

How service firms enter the Chinese market: Study of entry strategy of hotel and restaurant industries for Chinese market

...of market entry were studied in detail. From the knowledge gained through these, efforts were made to highlight special areas and in depth research of key areas were performed. Documents relating to the entry methods of organization running in China in hospitality and restaurant sector were studied and provided a great deal of knowledge. Case studies relating to the entry of hotels like Hilton and Marriot; and restaurants like KFC and McDonald’s were studied in details. Information for study of the market condition in China was collected from reputed and authentic websites. The future of the Chinese market in future...
44 Pages(11000 words)Dissertation

Feasibility Study for Salfordias Entry to Chinese Construction Market

...?Feasibility Study for Salfordia’s Entry to Chinese Construction Market Introduction The current economic climate is characterised by volatility as aresult of the fast-changing economic and business trends. The information and communications technology as well as the shifting of labour, work, and other forces have led to the need for many businesses to re-consider their established work and business practises. Despite local independence of many businesses from external forces as Salfordia’s case, the time already came when options such as outsourcing, importing, and exporting became inevitable. It is with this premise that this paper will explore the Chinese construction...
26 Pages(6500 words)Essay

Understanding the effective entry strategy into the Chinese market: a case study of Wal-Mart

...? ******************* Business School Understanding the effective entry strategy into the Chinese market: a case study of Wal-Mart No: Supervisor: Submission Date: Ethics Number: Final Word Count: ABSTRACT The retail sector has grown exponentially at the global level due to globalization and trade liberalization. A combination of push and pull factors have urged the retailers to look for opportunities beyond the national boundaries. However, many retailers have had to retreat because of different reasons. One of the strong and pertinent reasons could be the choice of initial entry mode into a foreign market about which the retailer has little knowledge....
49 Pages(12250 words)Dissertation

Select a chinese domestic brand of your choice and design a marketing strategy for entry into a foreign market

...? Marketing Strategy of Lenovo (Chinese Brand) for entry in Foreign Market Introduction to Strategic marketing Strategic marketing is one of the most significant elements in business. It helps to outperform the competitors and helps in making marketing decisions for expansion in marketing operations to increase profitability. According to Mintzberg’s phenomenological approach he defines strategy as a “plan, ploy, pattern, position and perspective” (Prevos, 2005, p.2). This definition define strategic planning phenomenon completely and helps to understand its importance in marketing. Every...
20 Pages(5000 words)Essay

International Marketing Strategy (Entry Mode) for Chinese Household Electric Appliance Enterprises into the UK Market

...? International Marketing Strategy: The Successful Entry of Chinese Household Electric Appliance Enterprises into the UK Market Acknowledgements Table of Contents Summary 4 Chapter 1: Introduction 6 Statement of the Problem 7 Purpose of the Study 8 Summary 8 Chapter 2: Review of the Literature 9 Export Entry Mode 9 Licensing Entry Mode 12 Investment Entry Mode 17 Summary 18 Chapter 3: Methodlogy 19 Research Method and Design Appropriateness 20 Research Questions 21 Population 22 Sampling Frame 23 Informed Consent 25 Confidentiality 26 Geographic Location 27 Data Collection 27 Data Collection Procedures 28 Instrumentation...
50 Pages(12500 words)Dissertation

Market Entry Strategies

.... 2010. The Dynamics of Market Entry and Expansion Strategy in Emerging Markets: The Case of Wal-Mart in Latin America. Sheffield Business School. Ozge, T & Elie, O. 2012. Innovation Strategy and Entry Deterrence. Journal of Economics & Management Strategy, Vol. 21 Issue 3, p583-631. Su, N. 2013. Internationalization Strategies of Chinese IT Service Suppliers. MIS Quarterly, Vol. 37 Issue 1, p175-200. Ulrike, M. 2004. International Market Entry: Does the Home Country Affect Entry Mode Decisions? Journal of International Marketing.  Vol. 12 Issue 4, p71-96. Veronika, P. 2007. When, How,...
10 Pages(2500 words)Essay

Chinese market

...in comparison with their situation a few decades ago. The potential of the market is the objective of this study. This thesis analyzes the Chinese market and provides solutions based on various scientific methods on how companies can take advantage of the Chinese market. China used to be a very hard place to access since there were many barriers to entry in the past. It is still not an easy place to penetrate, but it is much easier now to for companies to find their ways into China. A market that represents close to 20% of the human capital in the world is a very lucrative place to realize business. In order to...
27 Pages(6750 words)Essay

Produce a Market Entry Proposal of of Xiaomi (a fast growing Chinese smartphone company) in A specific country

...Market Entry Proposal for Xiaomi Market Entry Proposal for Xiaomi Executive Summary Brief Synopsis of the Issue Xiaomi is one ofthe leading smart phone companies in China which overtook Apple’s market share in its region in 2013. The company focuses on changing the hardware rather than the software of smart phones (Olson, 2013). Hence it is having a successful business performance. This has subsequently motivated the organization to extend its business into the global markets. this paper aims to present a comprehensive proposal for Xiaomi’s market entry into Singapore. Market...
8 Pages(2000 words)Essay

Poem

1 Pages(250 words)Research Paper

Market Entry Stratagies

...and to set its entry into the international markets. The articles refer to it as zou chuqu, which means “go global”. It highlights how Chinese companies have ventured into the international market in various capacities and categories. The countries companies found a competitive edge with regards to getting business contracts, and the articles notes of the Sony and sum sang setting up a state whereby some of their subsequent products would be coming from China. Meanwhile, the article on market Expansion Strategies, highlights on the impacts of the prevailing or business environment in the foreign country. The article asserts that companies with...
3 Pages(750 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic Entry into Chinese Market for FREE!

Contact Us