Mecitefendi Company in China - Literature review Example

Business Contents Contents 2 Literature Review of Mecitefendi Company in China 3 Introduction 3 Company Opportunity 3 Difficulties in the form of Language Barrier 4 Opportunities related to Ethics 6 Conclusion 8 Reference List 10 Zahra, S. A. and George, G., 2002. International entrepreneurship: the current status of the field and future research agenda. Strategic entrepreneurship: Creating a new mindset, pp.255-288. 11 Literature Review of Mecitefendi Company in China Introduction International entrepreneurship can be described as a process where an entrepreneur conducts business activities across national boundaries. It may consist of opening a new office, licensing, and exporting. Mecitefendi is a Turkish company established in the year 1994 with the headquarters in China. This company is involved in the production of primarily herbal juices and oil. In a very short period of time Mecitefendi has broadened the range of products and acquired large number of customer portfolios within Turkey owing to the quality of products offered by it. Mecitefendi wants to expand the business in China (Zahra, 2005). The reliability, standardised quality and price of the products can help the company to get an easy access to the markets of China. The internationalisation process can enable the company to be accepted globally. The company with the quality products, technological up-gradation, sound working conditions and effective fulfilment of the corporate social activities (CSR) can become a global leader. There are a number of opportunities for the company in terms of ethics, but language barrier can act as an obstacle in starting the business in China. The literature review in a detailed manner explains the opportunities and hazards that the company might face on extending business in China. Company Opportunity International Entrepreneurship can enable the company to take advantage of the growing market of China. As the scope for herbal cosmetic products has declined significantly in the domestic market, it would be fruitful for the company to sell the products in China, where the demand is high (Zahra, 2005). The company can experience vast opportunities in China (Dumitrescu and Vinerean, 2010). The Turkish company might face certain setbacks in terms of entry barriers while expanding business in China (Yiu, Lau and Bruton, 2007). China follows very stringent trade rules and regulations. Hence, being a foreign based company, Mecitefendi might fail to easily enter in the Chinese herbal cosmetic products industry. The low cost of the products, reliability and the already high rate of import in China might facilitate easy entrance therein and in the industry (Zahra and Garvis, 2000). Then again, the Chinese industry of herbal drugs is rapidly progressing, unlike that of the cosmetic. Therefore, in order to boost this industry, Mecitefendi might have a suitable opportunity (Zahra, Korri and Yu, 2005). The products offered by Mecitefendi are priced reasonably and boast of a standardised quality. These are the unique selling points of the company (Thomas and Mueller, 2000). The company avoids using any unethical ways while producing the products, which is why it can attract a large number of consumers through superior standards and consistency of the products. In the recent times, the industry for Turkish herbal based products has increased significantly in China (Tian and Borges, 2011). Mecitefendi experiences a large number of online orders from China for the products offered. The company through proper promotions and marketing can easily increase the level of prospect in the Chinese herbal industry as it has immense opportunities to be explored. Mecitefendi can also employ inexpensive labour and technology in China, thereby adding to the profit margin. The Turkish labour force is more educated and very costly and hence, using the Chinese sources of labour can effectively lower the cost of production and increase revenue (Zahra and George, 2002). Such advantages can also lead to the generation of employment opportunities and improvement in the standard of living for the Chinese people. The company at the same time can export the products to Turkey and other parts of the country at least cost (McDougall and Oviatt, 2005). Outsourcing can increase the revenue earned in the host country and balance it off with the loss incurred in the home country. Besides that, manufacturing cost can be reduced, while increasing the sales and profit. So, opening a business branch in China will add to prospect of the company, help to internationalise the products, increase the turnover significantly and become globally accepted. The company also needs to minimise the language and trade barriers so as to increase business opportunity in China (Eklinder-Frick, Eriksson and Hallen, 2011). Difficulties in the form of Language Barrier Irritations, misunderstandings, a feeling of inferiority and exclusion are associated with the inability to communicate in a known language. This is a daily challenge for all those who are interested to expand business globally. Therefore, global organisations enable employees to be more adjustable and fluent in the intercultural language and different communication styles. There are certain opportunities as well as limitations for Mecitefendi in China. The Turkish company might face certain hazards in terms of language while expanding in China. As a result, Mecitefendi can recruit a large number of local employees, workers and managerial staff from China so as to interact and connect with the consumers more easily. Besides that, such a measure can also help the business to flourish with fresh knowledge (Knight, 2001). The company needs to market the products in Chinese colloquial languages for easily communicating with the mass. At the same time, Mecitefendi should train the top level management and few Turkish staff present in the Chinese wing of the company in the local language of the country so that they can handle the business effectively (Shane, 2000). Entrepreneurs of Mecitefendi, therefore, can hire multi-lingual and motivated employees and gain greater knowledge about foreign markets (Jones, 2011). In order to overcome and transform the language barriers into a business competency, the company can hire the local people who can generate new ideas and connect with the masses more competently and proficiently. The language barrier must be eliminated for welfare and sustenance of the company in the Chinese herbal cosmetic products market. Mecitefendi can overcome the language barrier by following few steps. These can be discussed as follows: 1. Addition of major foreign languages in their websites – Mecitefendi can add summary pages to the website in Chinese, Russian, French and Japanese language. This can help it to reach the customers of the market targeted by it. Hiring of professional translators and spending a reasonable amount of fund can help it to overcome major language barrier. It can benefit Mecitefendi with increased enquires and sales. 2. Recruitment of employees with language skills – Although there are large number of companies which succeed to export without having employees who are skilled in various languages yet those who have them are always in a more advantageous position. Thus employees with language skills should be hired by Mecitefendi to gain a competitive advantage in the target market like China. 3. Mastering of new languages – Mecitefendi to fulfil the global aspirations must make sure that the employees and executives master new languages. In this way it can greet international visitors and callers more easily, answer simple question and receive basic message more easily. This can create an advantage over the competitors. 4. Recruit translators – Mecitefendi can also recruit a native speaker so that they can understand messages accurately, conveniently and help the company carry business communications more swiftly in the global market. Therefore, the language barriers in China can be overcome by Mecitefendi if it efficiently and effectively follows all the major steps as explained above. The business of the company can grow extensively in China if it makes an honest effort to overcome the language barriers and be competitive in the international market. Opportunities related to Ethics Corporate social responsibilities and ethical behaviour in a business can benefit it in the long run and increase its reputation and appeal towards the shareholders. Thus it can also be helpful for Mecitefendi to maintain ethics in their business. The benefits of maintaining proper ethics in the international business can be jotted down as follows: 1. It can help the company to attract more consumers towards the product of the firm. 2. It can motivate the employees to stay in this company and decrease the rate of turnover and increase the productivity of the business. 3. It can lead to reduction in recruitment cost and enable it to get talented employees. 4. It can attract more investors and keep the share price of the company high and protect it from takeovers. The advantages of maintaining ethics for carrying out international entrepreneurship can be further explained in a detailed manner. Mecitefendi can experience and take advantages of the opportunities in terms of ethics. China has an unfavourable business ethic, which is greatly subjected to criticism (Katila and Wahlbeck, 2011). There are many Chinese companies that provide unfavourable working conditions, overcrowded dormitories and force labours to work without a proper wage structure (Shane, 2000). However, it would be wrong to characterize the country as disinterested in corporate social responsibility (CSR) and business ethics. Such aspects are developing steadily and have a long way to reach completion (McDougall and Oviatt, 2000). Thus, the Turkish company can take advantage of undisciplined industrial situation of the Chinese industry (Zahra, Korri and Yu, 2005). As compared to Turkey, the labour and human rights preservation, quality and honesty in business for societal welfare is absent in China. These dimensions need to be enhanced so as to make the business culture more internationalised and acceptable worldwide (Jack, 2005). The Chinese businessmen are reportedly using substances that are artificial, in their herbal creams, oils, juices, shampoos and soaps. Such illegal actions lead to allergies and infections among product users and forced them to import the products from Turkey. The companies failed to perform the corporate social responsibilities efficiently. Besides that, the businessmen in Chinese herbal cosmetic product market also charged very high prices for their products (Ghemawat, 2001). Consequently, it is fruitful for Mecitefendi to internationalise the business and meet the existing gap in demand for the pure herbal cosmetic products in China. The Turkish based company can easily take over the Chinese industry by supplying high quality products that are globally accepted (Kirk, 2011). Mecitefendi can produce and maintain quality of the products as per expectations of the foreign customers not only in the national, but also in the international market (Zahra and Garvis, 2000). Such considerations can, thus, help the company to cultivate the positive habit of Customer Relation Management (CRM) by drawing faith of the customers towards products offered. Global expansion will enable the entrepreneur to be more sensitive towards domestic customers and adapt a respectful attitude for the foreign clientele and habits associated (Rauch and Trindade, 2002). The technologies used for production of these cosmetic products are the latest and most advanced (Ghemawat, 2001). Such facilities will allow the company to produce more and as per the industry standards without harming the society. The company has immense opportunity to attain the standard of international entrepreneurship. The expansion process, after ensuring appropriate business operations and work culture ethics, can allow the company to become globally accepted and beat the industry competition (Kontinen and Ojala, 2011). Conclusion The literature review of Mecitefendi shows that international entrepreneurship of the company can help in catering to needs of the global market efficiently. China has a gap in demand and supply of the herbal cosmetic products, which can be fulfilled by the Turkish based company. Expanding business in the Chinese market can add to the organisational profit, increasing the sales. The company can take advantage of the low manufacturing cost and cheap labour force. It can also benefit from low manufacturing cost of the host country as it is more costly to carry on the production process in Turkey. As demand for the products are declining in the local market, selling them in the foreign market can prove advantageous. The company can utilize the business opportunities present in China and hire Chinese labourers on a large scale. Outsourcing the cheap labour can benefit Mecitefendi in the long run. The labourers of China are least costly as it is experiencing a trade deficit and has low cost labourers for a long time. The growth margin can, thus, increase significantly with proper utilisation of the managerial opportunities and cheap labour force. In the absence of a talented workforce, Mecitefendi can hire employees of the host country and utilise the expatriated employees to enhance business growth effectively. The growth opportunities can increase significantly with expansion of the business in China. International business can help to achieve various objectives. The language barriers can be mitigated by hiring of managers, employees and workers from the same country. The Chinese businessmen are also not loyal who produce the products in an unethical manner by adding foreign substances to the herbal cosmetics like, essential oils, soaps, shampoos and juices. They lack ethics in business, which can rightfully help the company to gain considerable market share. Mecitefendi can benefit from the talented workforce and also gain more business knowledge. It should take advantage of the lack of ethics present in the Chinese companies. The entrepreneurs should provide the best quality of products and price them reasonably so as to capture the Chinese markets. The right quality of herbal cosmetic products, without any artificial ingredients, can attract a large number of customers towards Mecitefendi, thereby facilitating a successful international entrepreneurship status. Nonetheless, the workplace environment in China must be suitable for the work force. The labourers need to be paid reasonably as per the industry standards. Such positive measures can create greater business opportunity for Mecitefendi. Therefore, it is inferred that Mecitefendi can satisfactorily carry on with the international entrepreneurship in China owing to the presence of vast opportunities, besides certain barriers that can be easily eliminated. Reference List Dumitrescu, L. and Vinerean, S., 2010. The global strategy of global brands. Studies in Business and Economics. 5 (3), pp.147-155. Eklinder-Frick, J., Eriksson L. and Hallen, L., 2011. Bridging and bonding forms of social capital in a regional strategic network. Industrial Marketing Management. 40 (6), pp.994-1003. Ghemawat, P.2001. Distance still matters: the hard reality of global expansion. Harvard Business Review. 79 (8), pp.137-147. Jack, S. 2005. The role, use and activation of strong and weak network ties: a quantitative analysis. Journal of Management Studies. 42 (6), pp.1233-1259. Jones, V.C., 2011. Trade Preferences: Economic issues and policy option. 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