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This paper examines the different types of entry modes available for companies wishing to expand their business to the Chines
Entry Modes into China
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Introduction
Research studies explain that China has steadily risen to become one of the major contributors of the global economy in the last few years. With a gross domestic product growth of an estimated 10%, the country is ranked position three with relation to the world’s largest economies. Economic forecasts predict that by the year 2050, China would have surpassed all industrialized nations with relation to purchasing power parity, and for that reason, will be the leader of the global economy (Fishman, 2005). Evidently, the country has been subject to a considerable amount of economic growth, and more companies are looking into the ways through which they can tap the Chinese market. Accordingly, China’s astounding economic renaissance has encouraged business organizations and investors to examine the different ways through which they can enter the Chinese market.
As researchers explain, it is crucial the organizations device new approaches regarding the entry and retention of the business into the Chinese market. Further research on the issue explains that by the year 2005, China had reached a economic high, as the country attracted a revenue of about $1 billion per week (Naughton, 2007). This goes to show how good of a market that China has become over the years. For that reason, business organizations have considered various modes of entry into the country so as to assure their companies of the best possible success in the international market. Most of the firms that have made it in China have looked into business strategy options such as the acquisition of resources and supplies, the diversification of the different sources of supply and low-cost business strategies for the Chinese Market (Fishman, 2005). An examination of the performance of these businesses and firms in the Chinese market, as well as, the market entry modes and the different factors for success is necessary to understand how firms can best survive doing business in China. Though most organizations are reluctant in revealing company information regarding this issue, various successful entry modes have been identified to help in understanding of the Chinese market and its significance to businesses and organizations.
This paper examines the different types of entry modes available for companies wishing to expand their business to the Chinese market. Fundamentally, the paper identifies home production, contractual market entry, and foreign production as the three key entry modes into China. The advantages and disadvantages of each mode will also be examined, and a discussion of the various ways in which the modes have changed overtime provided.
Entry Modes into China
The mode of entry into a new market is one of the most fundamental decisions that business organizations have to make at one point in their business cycle. As research studies explain, a company’s choice of entry into a new market influences the organization in various ways including an organization’s production and marketing strategies. Fundamentally, the choice of a business’s entry mode into a new market determines the how the company faces the various challenges it faces in the new market (Gielens & Dekimpe, 2007). There are as many as fifteen different modes of market entry options for firms wishing to enter a new market. However, these modes of entry vary according to the market, which the company aims to expand its business. More specifically, researchers and economists have identified three chief entry modes into China including, home production, contractual market entry and foreign production (Li, 1995). These three key modes of entry have been subdivided into other options, which companies have employed to ensure their success in the Chinese market.
Home production
Also referred to as the export strategy, the home production entry mode into China defines a market entry point whereby an organization produces goods and services at their respective home countries, and sells to China as their host nation. With an estimate 200 million consumers, China has paved the way for companies to export products and services to their market, thus making it a preferred entry strategy for most businesses and organizations (Gielens & Dekimpe, 2007). This entry mode has been identified as one of the best business strategies for entry into the Chinese market, especially since it avoids the costs related to setting up shop in China. This entry mode, however, cannot work without the use of private entities that help the business organization in selling their products or services in China (Li, 1995). Accordingly, home production, as a mode of entry into China can occur in two main ways including direct and indirect exporting.
Direct exporting
Direct exporting is a form of home production that companies entering China export directly to Chinese customers interested in the purchase of the company’s products and services (Li, 1995). With such an entry mode approach, the business organization handles all market research activities, as well as, the distribution methods that the company will take on for success in the Chinese market. However, the organization will be required to have a connection to the Chinese market, which may be in the form of foreign sales representatives or foreign distributors. If a company opts for the use of foreign sales representatives, they will be required to assign representatives in China to sell their products and services (Gielens & Dekimpe, 2007). The use of foreign distributors demands that companies assign distributors in China whose responsibility will be the distribution of company products and services to the Chinese market. Some of the advantages of this market entry approach is the potentiality to increase profit owing to the elimination of intermediaries, as well as, having full control over the company’s activities. The main disadvantage of this strategy is that it demands a considerable amount of people power, so as to, ensure that the business is successful in China.
Indirect exporting
Indirect exporting is the second approach when considering the option of home production as a market entry strategy into China. As research studies illustrate, companies that have used this entry mode as a strategy have been successful in acquiring Chinese customers especially since it demands the use of Chinese intermediaries to facilitate business activities. This market entry approach requires a company to sell their products and services to an intermediary, who in turn sells these products and services to Chinese consumers (Li, 1995). Accordingly, this market entry approach can be conducted in two main ways including the use of local agents and trading companies in the home country, which in this case is China. The main advantage of this market entry mode is the fact that it is a risk free strategy, that assures the company of almost immediate acceptance of their products and services into the market (Gielens & Dekimpe, 2007). It also frees the organization from various responsibilities, thus allowing the organization to focus on other important business activities.
Contractual Market Entry
Researchers have also identified contractual market entry as the second mode of entry for business organizations wishing to gain a market share in China. In definition, contractual market entry defines the use of contracts as a way of penetrating into a new market. Contractual trade in business involves two or more companies entering into a contract and agreeing to do business with each other. Research studies explain that contractual market entry has long been favored by companies when entering foreign markets (Gielens & Dekimpe, 2007). In most cases, the contractual agreements involve the main company contracting other local companies for the sale of their product and services. In essence, the entry mode requires that a formal permission be granted to local companies in a host nation for the use of the foreign company’s resources for payment. This can occur in two main ways including licensing and franchising.
Licensing
Licensing is a form of contractual market entry strategy whereby local companies are provided with licenses to operate with the main company’s resources and facilities (Li, 1995). Most companies that have succeeded in their market entry into China grant Chinese local companies the permission to conduct business activities using the various brands that the company has. The main advantage of franchising as a market entry mode is that it helps in building a company’s corporate image, and facilitates the development of marketable products and services (Gielens & Dekimpe, 2007). However, this strategy provides a lot of restriction for the companies being licensed, and if not, the licenser will not have control over the sale of the products or services.
Franchising
Franchising is another form of contractual market entry strategy, and it has also been widely used by companies entering into the Chinese market. It is a mode of entry that defines the use of a firm’s name or business model so as to conduct business operations in a particular place (Li, 1995). Franchising in China is commonly used as a business strategy for international companies in the food and beverage industry. Just like licensing, the main advantage of this entry mode is that it helps build a company’s corporate image. This entry mode also benefits companies in terms of staff training and development, as the local franchise companies are provided the opportunity to train their staff members to the standards of the franchising company.
Foreign Production
Also referred to as the equity strategy, foreign production refers to the a mode of entry, whereby a company carries out both production and sale activities in their local home, as well as, the host nation (Gielens & Dekimpe, 2007). Research studies illustrate that out of the three entry mode strategies into China, foreign production is the most widely used entry mode strategy by big companies such as Coca Cola.
Strategic Alliance
A strategic alliance refers to a hompe production approach to market entry whereby a business organization enters into an agreement or collaboration with another firm in the host nation. With this entry mode, the companies that are in alliance share responsibilities of the production and sale of goods and services (Li, 1995). This strategy is advantageous to companies wishing to gain a market share in China because it assures the foreign company of an already existing market. By obtaining an alliance with a company in the host nation, foreign companies benefit from the host company’s market share. However, this strategy can be disadvantageous because of the sharing of profit between companies.
Joint Ventures
The last identified mode of entry for organizations into china, joint ventures are an approach to foreign production whereby instead of sharing company duties and responsibilities, they share ownership of the company (Li, 1995). Accordingly, joint ventures allow shared ownership between the foreign company and a company in the host nation. The advantages and disadvantages of joint ventures are similar to those of strategic alliances.
References
Fishman, T. (2005). China*Inc., How The Rise of The Next Superpower Challenges America
and the World. New York: Simon and Schuster.
Gielens, K. & Dekimpe, M. G. (2007). The Entry Strategy of Retail Firms into Transition
Economies. Journal of Marketing, 71(2): 196-212.
Li, J. (1995). Foreign Entry and Survival: Effects of Strategic Choices on Performance In
International Markets. Strategic Management Journal, 16(1): 333-351.
Lou, Y. (2000). Multinational Corporations in China. Hendon, VA 20172-0605: Copenhagen
Business School Press.
Naughton, B. (2007). The Chinese Economy: Transitions and Growth. Cambridge
Massachusetts: The MIT Press.
This paper examines Gendered close relationships as a conceptual foundation in human relations.
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Gendered Close Relationships
Few of the relationships formed between individuals become personal in the end. The creation and sustainability of personal relationships and intimacy rely on communication. The term personal relationship defines those relationships where the people in the relationships depend on one another for a variety of things. With personal relationships, it is not easy to replace the other person in the relationship as a deep connection is established between the two people in the relationship. Researchers suggest that dissimilarity in feminine and masculine orientations, in one way or another, determine male and female approaches to a relationship. Texts on intimacy and romantic relationships suggest that heterosexual dating conforms to initiation of a relationship by men: as is the case for my current relationship. Arnold and I met two years ago during spring break, and though we were friends during the first few months, our friendship has developed into a more intimate and romantic relationship over the years. For the few years we have been together, Arnold and I have been closely dependent on each other for almost everything: ranging from material support to emotional affection. Whereas Arnold is more dynamic, spontaneous and a tad too sexual, I, one the other hand, am more sensible and believe that friendship is key to making the relationship work. It is obvious that our relationship is romantic as we both express deep emotional desires to connect with each other at all times. Our relationship, as a result, resembles a form of close-friend relationship but with an additional sexual element.
This paper examines Gendered close relationships as a conceptual foundation in human relations. The paper observes and analyzes gendered interaction patterns of communication in my current romantic relationship, showing how these patterns reflect the text on gendered lives.
Gendered Patterns
The gendered patterns identified in the texts concerning intimate relationships draw attention to expression of affection, needs for autonomy and connections, power, as well as responsibility for the maintenance of a relationship. Researchers argue that the distinctive concerns and mannerisms brought by masculine and feminine socialization influence the patterns of romantic relationships.
Expression of Affection
Research suggests that the masculine modes of affection differ from feminine modes of affection in various ways. Whereas, the mode of affection in men is primarily instrumental and activity focused, women are more emotionally expressive, and their mode of affection is talk focused. These patterns are similar to the relationship between me and my boyfriend Arnold. I personally feel that expressing my emotions enriches my relationship with my boyfriend but Arnold finds the idea of expressing his emotions somewhat objectionable. The only time he will express his feelings when a problem arises at we at logger heads with each other. I prefer expressing how I fell when if feel it as a way of showing my partner that I care for him. On the other hand, Arnold fancies showering me with gifts and doing things for me as a way of showing me that he still cares about me. Further research on intimate relationships also suggests that both men and women appreciate partners who are eager to engage in intimate confessions: those who are emotionally responsive, over and above being sensitive and compassionate. This is a true reflection of my relationship with Arnold because, much as he chooses not to express his emotions at all times, I welcome his intimate self-disclosures at all times. I feel that this is the best way to affirm his feeling towards me, and I know that he appreciates when I do the same.
Autonomy and Connections
According to the texts, romantic relationships display both connection and autonomy in varying degrees. Further studies illustrate that the degree of which an individual looks for connection and autonomy mainly depends on the gender socialization of the person. Whereas, men want more autonomy and less connection, women demand more connection and less autonomy. This then brings about friction in a relationship with either party choosing to withdraw from the relationship. In terms of autonomy and connection, my relationship with Arnold displays similar patterns as that illustrated in the books. This is due to the notable independent character of my partner. Even as, I prefer to connect emotionally with Arnold, he tends to shun extreme attachment and prefers to have a sense of freedom in the relationship. For this reason, we tend to disagree on what we should and should not do together, and whether or not we need to give each other some privacy.
Gendered Power
Researchers describe gendered power in a relationship as the ability of individuals to control various aspects of a relationship as well as the relationship itself. Studies claim that the distribution of labor in romantic relationships, more often than not, reflects the individual who is in power in the relationship. Studies also suggest that men have more power in a relationship than the women: this is because common culture supports that men are the breadwinners and, therefore, make more money than women. However, this is not the same in my relationship with Arnold; both of us work for a living which means that we both share equal labor distributions. Additionally, none of us can claim power over the other because we share responsibility for every aspect in the relationship including material possessions. Therefore, our behavior patterns in the context of gendered power differ from what the textbooks edify.
Gendered Responsibility
Studies on gendered close relationships show that in a heterosexual relationship, a woman automatically assumes the principal responsibility for a romantic relationship. However, it is almost impossible for one person to meet the responsibilities of a relationship alone. Therefore, researchers recommend that for both individuals in a relationship to assume responsibility for the relationship is they wish to attain satisfaction. True to what the texts teach about gendered responsibility, Arnold and I prefer to assume equal responsibility of our relationship has in turn led to high levels of satisfaction in the relationship. This is because of the obvious fact that, having either one of us solely taking responsibility for the relationship causes a burden and conflict in the relationship.
Conclusion
Based on the observations of my relationship with Arnold, I can confidently conclude that the patterns of interactions between me and my partner are similar to what is described in the books about Gendered close relationships. The relationship displays similar patterns in behavior with that of the texts in terms of responsibility, emotional expressions as well as self autonomy. However, the power dynamics in our relationship differs from what the books say about the issue. This, therefore, proves that distinctions in masculine and feminine orientations to romantic relationships correspond to male and female viewpoints of relationships.
This paper examines both accounts of the history of medieval Spain; as a site of tolerant; and as a space of violence and int
Introduction
Muslims Jews and Christians coexisted for more than seven centuries in a place called Al-Andalus in Spain. The degree to which Muslim rulers tolerated Jews and Christians is a widely contested subject among scholars. Some historians acknowledge that Muslims, Jews and Christians who lived within Al-Andalus interacted peacefully, with just a few instances of religious persecution and revolts. Other scholars argue that the interaction among the three groups led to the formation of medieval Iberia, a system that was characterized by religious, social and political intolerance and violence (O’Callaghan, 2002). This paper examines both accounts of the history of medieval Spain; as a site of tolerant; and as a space of violence and intercultural tension.
Discussion
In medieval Spain, Muslims comprised of three powerful groups: the Berbers, the Arabs and the Neo-Muslims, muwalladûn. All the three groups emigrated from other parts of the world formed a force that enabled them to conquer non-Muslims who used to live in Spain. Together they formed the majority of the population that lived in Al-Andalus and possessed relatively great social, economic and political power (Menocal, 2002). The non-Muslim minorities comprised of Jews and Christians and they also played significant social and economic roles in the area. According to Watt (1967), the three religious groups had peaceful relations between 736 and 1031, during the Andalusian Umayyad dynasty. The peaceful coexistence was facilitated by Amir Abd al-Rahman, a ruler who succeeded in puling together the three groups of Muslims to rule medieval Spain and interact peacefully with non-Muslims. According to Watt (1967), the relationship among the three major groups was characterized by social, ethnic and religious tolerance and inter-faith harmony between Jews, Christians and Muslims. Christians and Jews retained their freedom, provided that they followed certain instructions and rules. Although these instructions and rules would now not be considered as completely fair, they may not be regarded as very harsh or burdensome considering the standards of the time.
As Watt (1967) explains, the Muslims treated Christians and Jews much better than conquered people might have expected. The Christian and Jews were not forced to live in ghettos, were not forced to abandon their faith, were not slaves and were not banned from engaging in any economic activity. They were tolerated if they acknowledged superiority of Islam, avoided blasphemy, accepted Islamic power, paid tax to the Muslim rulers and complied with rules laid down by rulers. The rules included not to receive inheritance from a Muslim, not to carry weapons, not to build synagogues and building resembling mosques, not to wear the same garments as those that were worn by Muslims, not to own a Muslim slave, not to give a prize to a Muslim and not to give evidence in a Muslim court (Barton, 2009). Generally, the Muslims did not explicitly show intolerance to the Christians and Jews. One of the reasons why there was peaceful interaction between the Muslims and non-Muslims is that when combined together, non-Muslims outnumber the Muslims and thus, mass execution was not possible. Secondly, it could have been massively expensive to control the beliefs of the huge number of non-Muslims (Barton, 2009). Finally, including non-Muslims in administration made their followers loyal to the Muslim government and this had numerous political and economic benefits to the Muslim rulers.
As Novikoff (2005) assert, not all Muslim rulers were tolerant to the non-Muslims. Almanzor, who took over leadership from the middle of 11th century imposed strict restrictions on non-Muslims and rooted churches. Christians were not allowed to employ Muslims, were not allowed to build taller houses than Muslims, were not allowed to express their faith in the public or to carry a bible and were required to give way to Muslims in streets. There were numerous prosecutions and executions of Muslims. Another Muslim leader known as Yusuf bin Tashfin who to over leadership in 1086 continued with the same trend. According to Lane-Poole (1967), these rulers imposed restrictions on non-Muslims to minimize their political, social and economic influence and power. The situation continued to worsen until in the middle of 12th century when the Islamic empire declined and was replaced by Christianity. After taking over power, Christians started imposing restrictions on Muslims that were similar to those Muslim rulers had been imposing on them. The main reason for doing so was revenge. By the end of 15th Century, Muslims had lost all power to Christians (Fletcher, 1993). In the beginning of 16th century, Christian rulers started forcing Muslims to abandon their faith and convert to Christianity (Lowney, 2005). They imposed brutal restrictions on those who refused to change.
Conclusion
In conclusion, various scholars have shown that there was a period of tolerance in which Muslims and Non-Muslims interacted peacefully with others showing that conflict and intolerance was prevalent in Medieval Spain. However, the idea of tolerance and harmony is false and may lead a modern reader to wrongly believe that Muslims and Non-Muslims coexisted peacefully in Medieval Spain prior to the middle of 11th century. As noted in the essay, the Muslims conquered and ruled over the non-Muslims. This could not have happened peacefully. After taking over leadership, Muslims imposed rules on Christians and Jews. Though they may not seem to be much of a burden, these rules led non-Muslims to be treated like second-class citizens who had been denied some rights. The non-Muslims used to adhere to these rules only because they were less powerful. Thus, it would be worthy to argue that the perception of al-Andalus as a space of tolerance and harmony between Christians, Jews and Muslims has been too overstated.
References
Barton, S. (2009). A History of Spain. New York: Palgrave Macmillan.
Fletcher, R., (1993). Moorish Spain. Berkeley: University of California Pres
Lane-Poole, S., (1967). The Moors in Spain. Beirut: Khayats
Lowney, C., (2005). A Vanished World: Medieval Spain’s Golden Age of Enlightenment, New York: Free Press
Menocal, M. R. (2002), Ornament of the World: How Muslims, Jews and Christians Created a Culture of Tolerance in Medieval Spain. Boston, MA: Little and Brown.
Novikoff, A., (2005). ‘Between Tolerance and Intolerance in Medieval Spain: An Historiographic Enigma’, Medieval Encounters, 11: 7-36.
O’Callaghan, J. F., (2002). Reconquest and Crusade in Medieval Spain, Philadelphia: University
of Pennsylvania Press.
Watt, M., (1967). A History of Islamic Spain. Edinburgh: University Press.