Foreign company in china
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Foreign Companies in China
Agusto Fabilo IUP201103Abdul Rahman Butt IUP201104Anastasia Jeanice IUP201110Stevano Otto IUP201118
Best Buy in China
History Opened its first store in Shanghai in
2003 Spent 8 years expanding to big cities In 2011, shut down all nine stores in
China
Why it failed ?
Sticking to AmericanBusiness model
Differing marketphilosophy: Best Buypromoting high-endvalue to low-end consumers
Always playing by the rules and morals
What Best buy can learn from succesful companies
Walmart adapted to Chinese market philosophy
KFC matched consumer’s taste & preferences
2002 - Entering China by acquiring EachNet, a chinese consumer auction site
The largest e-commerce play in China 2003 – competitor (taobao) 2005 – failed to attract chinese
consumers 2006 – joint venture with TOM Online Inc 2006 – Shutting Down
Strategy Bringing in US-based technology to
China Global platform
Centralized decison making Complexity of Ebay’s global platform
affected the speed of decision makin in China’s operation
Ebay vs TaobaoEBAY TAOBAO
Advertising on busses, subway platform
Advertising on TV channels
Fees for quality service Free services
40% for auction Majority are for sales, 10% for auction
Online Auction Market in China
Why Ebay Failed ? Failed to understand the Chinese market No adaption Lack of customer focus
Home Depot US based home improvement retailor founded in 1979 Its second largest American retail store In 2006, announced its acquisition in Chinese market as
‘The Home Way’, present in 6 cities with total of 12 store In 2009, they closed 5 of their stores, and announced to
introduce in e-marketplace soon In 2012, they closed all remaining of 7 big box stores
from China Home Depot adapted wait-and-see policy in Chinese
marketplace Home Depot lack of success is frequently attributed to
its business ethos
What failed Home Depot Do-It-Yourself (DIY):
A model that wasn’t meeting the needs of Chinese consumers
The market trend says it is more of a Have-it-done-by-others culture (HIDBO)
Young Chinese look to acquire Western lifestyles. Home ownership 15 years ago was non-existent. Now, Chinese prefer small apartments
The quality of service was also not appreciatable
IKEA Strategy IKEA is also a furniture,
home improvement,and do-it-yourself company,but it providesassemble-for-you policy
Its setup and stores are what Chineselook forward to
End product information helps Chinese to make up their mind
A furniture store or a colorful theme park? Whatever! as long as there are customers
A furniture store or a colorful theme park?
Lessons to be learned Chinese consumers need to be educated as they have no
role models. They are eager to learn but they need guidance. Companies that invest in educating the market can expect to reap handsome rewards.
Pay attention to local customers’ preferences. For example, the kitchen is usually small and considered secondary in a Chinese home. Chinese cooking usually blackens the kitchen with soot and grease and is the domain of an ayi, or household helper, who cooks for the family.
Most Chinese homeowners live in condominiums rather single family homes. They do not have a garage that can store tools and ladders. A more appealing package would be pre-designed interiors with installation included.
Volkswagen Group in China
Automotive Competition in China
Volkswagen Group China Achievement
the sales forecast for 2010 was 900,000 units, VW China sold more than twice that amount at 1, 971,000 vehicles.
In 2009, as part of a global VW strategy, VW China announced a growth plan called “Strategy 2018” with goals in four business areas: Sales and customers:
Improve customer satisfaction and brandimage through enhanced dealer networksand upgraded service.
Products and technology:Combine VW’s most environment-friendlytechnologies with local R&D to generate productsthat perfectly meet customers’ needs.
Production and supply:Contribute to China’s automobile industry.
Responsibility and Partnership:Strive to be an excellent corporate citizenand create a long-lasting partnership throughthe integration of European andChinese cultures
Volkswagen Group Strategy
In March 2011 – VW Chinaopened a sales and service academy in Beijing, where trainers will be trained to instruct serviceand management staff
VW the number onemanufacturer of fuel-efficient vehicles in China. Volkswagen is successful in developing fuel Efficient cars which is the future of automotive industries.
Adapting Chinese consumer needs, Volkswagen makes their vehicle more spacious.
Volkswagen Sales in 2012
Conclusion..!!!
THANK YOU FOR YOUR ATTENTION