Strategies to entry China manufacturing market

Essay by cherylchenUniversity, Master's December 2004

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1.0 Introduction

In this essay, I will represent some of the strategies for a manufactured products company in Malaysia to penetrate new markets abroad, especially the huge market of China. On top of that, I will also recommend some of the fall-back positions for the company to deal with in case of the recommend strategies fail.

According to David Pollard (n.d.), the motivation for companies going international are from both reactive and proactive point of view: the reactive motivations are - "increasing international competition, increasing trade barriers, host-country rules, and customer demands"; the proactive ones are - "seeking economies of scale and new markets, increased resource access, cost savings and local incentives". Like what Czinkota, et al (2005, P. 4-5) said,

Since the 1950s, the growth of international trade and investment has been substantially larger than the growth of domestic economies. Technology continues to increase the reach and eased of conducting international business, pointing to even larger growth potential in the future.

A combination of domestic and international business, therefore, presents more opportunities for expansion, growth, and income than does domestic business alone.

As globalization, internationalism has become the new trend for business in today's world, for companies to survive and to succeed, they need to cope up with the new trend to look for opportunities in the international market.

2.0 An Understanding of Business Internationalisation

International business "consists of business transactions between parties from more than one country." (Griffin & Pustay, 2005, P. 5) It has become a trend and is very common to involve in people's daily life. For example, as normal as the clothing we bought, the raw material could be from China or India, the separate parts could made in Taiwan, Indonesia, or Vietnam, and it was assembled in Singapore with workers from Sri Lanka, Cambodia,