TABLE OF CONTENTS
CHAPTER I - ABSTRACT 3
CHAPTER II - INTRODUCTION 4
Aims & Objectives 5
Research Questions 5
CHAPTER III - LITERATURE REVIEW 7
Mode of Entry 7
Ownership & Control 12
Conclusion of the Literature Review in Entry Strategy 15
IKEA in China 16
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Coca-Cola goes back to China 18
CHAPTER IV - METHODOLOGY 21
CHAPTER V - RESULTS & DISCUSSION 23
The Franchise Mode of Entry (1979-84) 30
The Joint Venture (1985-1992) 32
Hybrid Mode of Entry (1993-Present) 34
CHAPTER VI - CONCLUSION 37
CHAPTER I - ABSTRACT
China’s vast market potential makes it attractive to foreign direct investors. However, there are many barriers and challenges that a multinational company is likely to encounter. An entry strategy is deemed necessary to overcome these barriers and challenges and to come out successful in its foray into the Chinese market. This paper will present two case studies of companies that have successfully entered China: Coca-Cola and IKEA. Empirical studies as well as other secondary data from various sources including textbooks, journals, news articles, and websites contributed to this research. Both these companies are top producers and marketers of their products, in China and as well as the rest of the world. Their entry into China was not without enormous challenges, specifically for Coca-Cola who has a long history of investment in China. Analyzing their entry strategies provides a deeper insight into how a multinational company can utilise appropriate entry strategies to expand its global operations, even in a country that poses many difficulties.
CHAPTER II - INTRODUCTION...
therefore decided to open its doors to trade liberalization and to invite Foreign Direct Investments (FDI) to boost its international trade and commerce, in order to improve its economy. Globalization offered China a welcome opportunity to open up its economy to free market operation. The objective was threefold; first to invite FDI into China with a motive to expand its manufacturing capability and provide employment opportunities for its vast and growing population; second to enable its industries to upgrade with new technologies and to regain economic balance; and lastly to again become an economic power in the world as it had been historically. IKEA and Coca-Cola are two of the multinational companies (MNCs) that went into business in China after it opened its economy to foreign corporations. The two took distinct tracks and had differing learning experiences. Coca-Cola bears more colours in its entry mode being the first one to establish an inroad into the vast Chinese market. The Coca-Cola affair is rich with data that can provide good learning on how China shifted from communist market control to that of a socialist-market economy. It shows the intricacies that Coke underwent and reveals how it was able to surmount the odds. IKEA came in later when restrictions had been eased and China has already taken initial lessons on how to handle foreign corporations. The more favourable environment coupled with IKEA’s dynamic entry approach provided for a smoother inroad than was experienced by Coca-Cola. Nevertheless, the experience of both MNCs provides a comparison and contrast to equate in a critical analysis of how foreign corporations got back into the Chinese economy. The stories are as interesting as they are entertaining. Aims & Objectives This paper aims to
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(“The Relevance of Entry Strategy in China: A Case Study of IKEA and Essay”, n.d.)
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(The Relevance of Entry Strategy in China: A Case Study of IKEA and Essay)
“The Relevance of Entry Strategy in China: A Case Study of IKEA and Essay”, n.d. https://studentshare.org/management/1390615-the-relevance-of-entry-strategy-in-china-a-study.
This report completed will attempt to findhow Coca-cola HBC (CCHBC) and its operations management practices enable it to achieve its strategic aims; initiating critical evaluation of CCHBC’s approach to capacity management involving production planning and control; to know the nature of relationship between CCHBC and its suppliers and some reasons why it was able to manage relationships with them the way it does;
We stay in one global country. This is said because there is free trade and commerce between all the countries. People staying in any country can use products of another country. Everyone is free to travel around the world with valid passport.
Multinational Strategy adopted by COCA COLA.
The international strategy of the multinational companies has occupied many researchers. However there are no widely accepted definitions of international business strategy. One approach adopted in the study of international business strategy is basically from the perspective of strategic focus.
About 30 years ago, the company was the sole maker of soft drinks worldwide although some small companies existed. However, the company’s competitive advantage has been greatly diminished with the advent of the Cola Wars in which Pepsi-Cola was involved.
Despite its attempt to popularize its products in China, Coca Cola Company faced a lot of challenges. The company had entered the new foreign market with very high expectations, but her methods of market approach and advertisement strategies failed to give the results expected In its effort to influence people and create awareness of its products, coca cola opted to use the traditional Medias that were commonly used by the local firms.
21). Coca Cola has extended its presence to nearly all parts of the globe. Precisely Coca Cola is a giant multinational the comprises of 300 constituent companies around the world. Coca Cola maintains an active trading presence in 200 countries. In terms of employees the company has over 1 million employees in its various branches on the international scene.
The global standardization strategy requires that all markets are considered the same and products are sold in each market using the same strategy. A global standardization strategy implies that the same product will be sold to all markets with the same pricing strategy.
Currently, Coke is the regarded as one of "world's most recognizable and widely sold commercial brands" as it ranks second in the international business arena.
This paper aims to answer three important questions regarding the business operations of Coca-Cola.
Deng Xiaoping's policy of opening China to foreign investors in 1979 generates a positive response from Coca-Cola. The company indicates its eagerness to capture China's large market as it was the first US business organization to express its desire to operate and distribute its products (Weisert, 2001).
The paper operates mainly based on research questions which can be stated as follows: What is the benefit to consumers of price increasing in hot weather? Price is being allowed to act as what role? The current prevailing system of machines having a fixed price has what effect on pricing (causes the fixed price to effectively act as a what)?
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