M5 (KP) Follow Up Response

NEED RESPONSE:

ORIGINAL TOPIC:

Assignment 1: Discussion—Doing Business 

Abroad

Nancy Baxter and several other small business owners joined a trade mission to China to explore market opportunities there. The group learned that China has a population of 1.3 billion and is the third fastest growing export market for small- and medium-sized US firms.

In any given year, the Chinese software market grows by 30% and the number of Internet users quadruples. Furthermore, the demand for management consulting services is increasing, especially information technology consulting.

Members of the group were surprised by the number of people who had cell phones and regularly surfed the Internet, especially in large, urban centers. On the downside, they found that counterfeit goods (from clothing and leather goods to software and CDs) were available at a fraction of the cost of legitimate merchandise. In addition, the members found that local merchants expressed an interest in doing business only with vendors with whom they had established relationships.

In this assignment, you will review different concepts discussed in the course and critically evaluate how the business venture you are proposing could be successful in a different business culture, such as China.

Tasks:

Using the Internet or the Argosy University online library resources, research how people do business in China and how the Chinese culture can affect your traditional business thinking.

Now, respond to the following questions:

• What types of businesses would prosper in China? Why?
• What are the challenges and risks associated with doing business in China?
• What steps should Baxter take to address these challenges and risks in order to increase a chance of success in the market?

STUDENT RESPONSE:

China offers the opportunity for new business ventures as the market continues to grow, but with opportunity comes challenge. I think there are a few challenges when it comes to doing business in China. I think a challenge is that China is often slow in creating new business partnerships with new companies. They typically want to establish a strong relationship and meet multiple times before closing business deals. I think another challenge is the cost of doing business in China. More companies have moved operations processes overseas which is causing the cost to become more expensive.  China’s purchasing power is become more powerful in the world’s economy and this is causing an increase in salaries and more companies having presence in China.

I think a business that would do well in China is clothing. Chinese consumers tend to want items that appear valuable that would help enhance their social status. They are willing to pay more money for items that have status value like shopping at brands like Michael Kors, Gucci, Louis Vuitton rather than stores like Walmart, Target, etc.

In order to overcome the challenges of doing business in China, I think Nancy must take the time to gain an in-depth understand of the Chinese business market that she is looking to enter and adapt accordingly. She must learn about the consumer shopping habits and preferences. She must also be patient and understand that Chinese business owners and managers take their time in forming new business relationships. So she will need to attend meetings and ensure that she is creating a positive business relationship from the start. This will help to build a positive reputation for her company which will gain their trust.

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