It Industry Into China

Topics: Apple Inc., Apple Store, Steve Jobs Pages: 21 (8025 words) Published: July 14, 2013
1. Introduction
With the economic globalization, More and more multinational enterprises expanded their business abroad by using different market entry strategy. As Lechner and Boli (2012) claimed that the world-economic trends and cycles of the past two decades have made it increasingly apparent that the production and distribution of goods take place in complex global networks that tie together groups, organizations, and regions. In this paper, we focus on the IT Industry which is more and more popular in China, and then analyzed four giant IT guys: Apple, IBM, Dell and Samsung. They entered Chinese market during the different period. Even though some of their businesses are similar, their growth path and the strategies they used are totally different. 1.1 Trends in the China Information Technology (IT) Industry The reason why we choose this specific industry in China because as we all know China has the most largest population in the world, it’s consider to be the biggest market size. Throughout China's reform era, the IT industry has often been a forerunner of broader trends in the industrial economy, and this continues to be true today. The IT industry has stepped into the starring role in a long-running drama, that of China's transformation into an industrial economy. Both Chinese domestic factors and international economic trends have contributed to the rapid restructuring of the Chinese IT industry into a highly dynamic, flexible, and open structure (Ernst & Naughton, 2008). 1.2 Research Question

Therefore, based on the reasons we listed before, Our research will focus on two main topics: Firstly What`s the strength, weakness, opportunity and Threat of the giant IT companies when they entered into Chinese market? Secondly, What kinds of market entry modes did they use?

2. Literature Review
Globalization is no longer an abstraction but a stark reality that virtually all firms, large and a small, face. Firms that want to survive in the 21st century must confront this all-encompassing force that pervades every aspect of business (Craig & Douglas, 1996). In general, if a company wants to expand their business, they will analyze the target market and find out in what way that they can successfully entering that market. And there are many different ways to enter foreign market like Non-equity-Based Modes of Entry, which include: Export, Indirect, Direct, Subcontracting, Countertrade, Licensing, Franchising, Contract manufacturing, Management contract, Contract manufacturing. And also Equity-Based Modes of Entry, which include: Wholly owned subsidiary, Joint venture, Strategic alliance, Merger and acquisition. (Ball, Geringer, Minor & McNett, 2010). From the perspective of the IT sector, we see a fairly successful transition toward a capitalist market economy for China. In the overall industrial economy state ownership is still significant, but it is now concentrated primarily in natural resource sectors and utilities. State-owned firms, while present, play a secondary role in the IT sector, where technical innovation is critical. In fact, China has muddled through to a highly flexible, internationally open, and entrepreneurial solution in sectors such as IT hardware and software. (Ernst & Naughton, 2008). We argue that the IT industry has played a crucial role both in transforming China's industrial economy and in forging a peculiar Chinese model of developing a vibrant high-tech industry. A hybrid mixture of ownership and corporate governance patterns has been combined with aggressive policies to foster alliances with global leaders in industry and research. This has enabled Chinese IT firms to accelerate the development of management and innovation capabilities. (Ernst & Naughton, 2008). Consideration of market entry barriers (MEBs) is especially significant in entering foreign markets since MEBs often present unusual constraints to management. Yet, entry into the Chinese market remains...
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