How Have Some Chinese Companies Achieved Success in Foreign Markets?
LI CHEN 100713315 How have some Chinese companies achieved success in foreign markets? With the rapid development of globalization, countries have become increasingly close. That reflects not only in economy, politics but also in culture. The globalization has promoted China to join the WTO. And Chinese companies have played an important role in foreign markets. So next this essay will explain how some Chinese companies achieve success in foreign markets. In addition, there are two main factors that make Chinese firms successfully in the fierce competition. Those are internal and external reasons.
For internal factors, firstly some Chinese companies have unique management strategies and mechanism. For example, Lenovo as a wonder in China’s information technology industry, it use people-oriented management to develop its company, and it focuses on improving employees’ working and living environment. That has motivated employees to work harder for their company (Teagarden and Cai, 2009). Secondly, in information era some Chinese firms develop their own company by using the strength of network. For instance, Hair has established a strong sales network and obtained various relationships with global market (Teagarden and Cai, 2009).
That has laid the foundation for occupying more market share in the future. Thirdly, some Chinese enterprises have courage to innovate. For example, TCL has obtained many international rewards because of its innovative designs. And TCL not only focuses on develop new brand but also has set up some overseas branches to develop new products. That has absorbed more cooperation with other countries (Teagarden and Cai, 2009). For external factors, initially, since China has a large number of populations LI CHEN 100713315 and the price of labor is relatively cheaper than other foreign countries.
So Chinese firms can provide more products with lower cost than foreign companies, and those competitors will find that is difficult to compete with Chinese firms (The Economist Intelligence Unit Limited, 2007). Subsequently, in 2001 China has joined WTO and it will enjoy the membership commitments (China Retail Report, 2010). Which means Chinese companies will have more incentives in the international markets. Ultimately, the Chinese government always gives more support and protection for the private companies, so these companies will have strong confidence to compete with competitors (China Retail Report, 2010).
To sum up, the combination with internal and external factors that has made some Chinese enterprises successfully in the foreign markets. However, Chinese firms also have some weaknesses and threats. For example foreign companies always complain about inadequate protection of intellectual property in China (China Retail Report, 2010). What’s more, since there are many Chinese firms have cooperation with foreign companies, the global economy will have great impact on Chinese firms especially for those clothing industry, and once the global recession, some companies may be bankruptcy (China Retail Report, 2010).
Therefore although some Chinese companies have achieved some success, while they must to analyze their weaknesses and threats timely, in this way these companies can take measures to overcome them and get long-term success. 2 LI CHEN Reference China Retail ReportQ3, (2010). SWOT Analysis. 2 (3), pp. 7-9. 100713315 Teagarden, M. & Cai. D. (2009). ‘Developmental lessons from China’s Global Companies’. Organizational Dynamics, 38(1), pp. 73-81. The Economist, (2007). ‘Disruptive Dragons’, pp. 5-6. 3