Market+Entry


 * Due for April 12th class**

Read the following article: “//Regional market segments of China: opportunities and barriers in a big emerging market//” (The article is available for download below) From this reading and other resources you have, **post** a response to these questions in collaboration with your team members (without repeating items).

a. What are some key factors for successful market entry according to the article or other sources you choose to use? b. What are some of the challenges to entering the Chinese market? How might one overcome these challenges? c. How do the regions tend to differ? Is there a common “China” thread throughout regions?

a. Any company entering China must first understand the overall market potential. It must also recognize the regional differences that exist in China while trying to decide location and business approaches. The new company must want to create a stable presence in China in order to sustaining their success, instead of being motivated by low labour costs beacuause these companies will one day have to move to elsewhere in Asia or in Africa for that particular opportunity. Good

b.China is a developing country and consists of multiple markets segmented by regional economic development and local culture. China is actually a conglomeration of markets divided by such factors as level of economic development, industrial priorities, and local cultures. One must understand the difference between the regions and cultures in order to find the area for their firm that would work the best when taking all the details into account. A firm cannot look at China as one big country that has the same traditions, customs, and culture throughout.

c. Southwest China has always been of interest to foreign companiescompanies, but because it is isolated from the rest of China, consumers have a slow pace of life and are less exposed to foreign goods. Northeast and Northwest China remain have barely been discovered by foreign companies. North China and East China lead the nation in attainment of college education. Northwest China is mountanous and very hard to navigate, but full of many poor people. In order to encourage development here, foreign investors have been access to industry sectors restricted in other regions. Consumers in North China, Central China, Southwest and Northeast are satisfied over 80 percent with their lives. However, only some 60 percent of people in South China and East China, which are the wealthiest regions, feel the same way.

You can see in the recent McKinsey report link below how they recommend "clustering" for the diverse Chinese market. (pp. 30-33)

2010 Annual Chinese Consumer Study, August 2010 https://solutions.mckinsey.com/insightschina/default/en-us/about/our_publications.aspx#aug2010