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).

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

a. What are some key factors for successful market entry according to the article or other sources you choose to use? To look at China as a number of distinct opportunities rather than as a whole market. This would allow any entering firms to identify clear goals that reflect the different lifestyles and the variation in economic growth and per capita income. Also, treat different countries as almost different regions and negotiate separate partnerships in each area of operation.

To understand China as a whole and its regional differences. Entering firms should investigate about the different type of consumers in each region, as well as know the differences

in purchasing power, economic growth, and income. Good

b. What are some of the challenges to entering the Chinese market? How might one overcome these challenges? Entering the Chinese market too quickly with the idea that a firm "has to be in China" is a challenge. For China to respond positively a firm has to set out to create a stable, long-term market for consumer goods. Also, any firm planning a long-term presence in China has to consider how they will expand into the less-developed regions of that country. In addition, any firm entering into the Chinese market will encounter regional differences, trade barriers, and local protectionism that will either make or break a firm'[s success. Yes

Some of the challenges to enter the Chincese market are, to understand the regional disparities in economic development, market infrastructure and consumer purchasing power. In order to overcome this, entering firms need to enhance the value to local consumers, finding a balance between global orientation and local conditions so they can maximize market coverage and minimize their risks. c. How do the regions tend to differ? Is there a common “China” thread throughout regions? There are significant regional differences in China which include the coastal provinces and the interior. No region is technically the same so there really isn't a common "China" thread because it depends on which region. The further one goes toward the coast the more difficult it is to get around. Also, The long-term stability of China requires that the authorities begin to redress this imbalance through encouraging investment in the less developed regions.

Regions in China have significant areas in which they differ. Starting with the coastal and inner areas, the first ones are more developed and major cities, while the inner areas are mostly rural and depend on agriculture. Also, the regions differ in population, urbanization, income, lifestyles, consumer's purchasing power, etc. Therefore, there is no China thread throughout the regions.