The Successful Entry of Chinese Household Electric Appliance Enterprises into the UK Market - Dissertation Example

In order for international companies to stay successful in today’s quickly changing and increasingly global business community, it is important to constantly be innovating and looking for viable expansion opportunities when they present themselves. The People’s Republic of China has countless small and medium-sized companies that are well situated to move into global markets.

Many of the industries are firmly rooted in the manufacture and sale of household appliances. A growing market for such appliances has been realized in the region of the United Kingdom. Expansion into the United Kingdom does not come without perceived risks. This study first looks at the market conditions that need to be evident before a Chinese firm can realistically explore moving into the United Kingdom. The project also examines the unique nature of business in the UK and how those differences need to be accommodated by the Chinese company looking to expand.

In the end, the study looks at the three main entry modes into a new international market, highlight the positive and negative aspects of each, in an effort to determine which might be best suited to the small and medium-sized Chinese appliance company. The theory of cultural distance is also explored to determine how Chinese companies can best minimize the great divide that currently exists between the two companies. Since we know that cultural distance increases risk, an analysis is needed to determine just how much risk a given firm is willing to accept.

In addition, various options for entry need to first be explored in order to narrow the cultural distance currently in existence. In the end, a primary objective of this project was to conduct actual field research by contacting various Chinese firms either interested in the UK market or they are already conducting business there. Advice and insight were solicited about how small and medium-sized Chinese appliance companies should best explore future expansion into the United Kingdom. What follows is a synopsis of these findings. 1. Introduction International business, by its very nature, is a complex and difficult landscape to navigate.

Various legalities exist that certainly provide a barrier to entry into many markets. While it is certainly feasible, many companies struggle to justify the time, expense, and expertise to successfully enter into a new market and to be financially prudent at the same time. China is obviously an international manufacturing powerhouse, making nearly every type of conceivable product available on the market today. Domestic consumption alone, however, can only carry an economy the size of China so far.

It is prudent to explore international markets and to make a successful entry into various product categories and often and seamlessly as possible. China has long been known for its household appliance industry.  They have successfully created some of the top-selling appliances of all time, but manufacturers are finding themselves facing increasingly perilous times due to decreased domestic consumption and increasing international competition.