Collective internationalization – a new take off route for SMEs from China

2013 ◽  
Vol 8 (1) ◽  
pp. 29-42 ◽  
Author(s):  
Susanne Sandberg ◽  
Hans Jansson
Keyword(s):  
Chinese Culture ◽  
Role Model ◽  
Economies Of Scale ◽  
Resource Constraints ◽  
Foreign Market ◽  
Global Market ◽  
Local Market ◽  
Retail Market ◽  
Chinese Market ◽  
Content Type

Purpose – The purpose of this paper is to investigate the establishments of Chinese wholesale and retail market platforms in China and Europe, which create a new take-off route for SMEs from China, and to theorize on this as a new collective route to internationalization. Design/methodology/approach – An exploratory case study has been undertaken covering four Chinese market platforms: the role model in Yiwu, China, and the establishments in Warsaw, Poland; Budapest, Hungary; and Kalmar, Sweden. Findings – A new collective internationalization route is identified, driven by the collectivistic Chinese culture. Here Chinese SMEs diverge from traditionally suggested paths of internationalization, taking off independently from the domestic business network but form a joint market platform in the foreign market. This collective behavior compensates for the resource constraints of internationally inexperienced Chinese SMEs. From the market platform, they plug into the local market network and are provided with economies of scale and scope, ultimately making them internationally competitive. This collective route offers the potential for joint learning and risk reduction when entering distant markets in the early internationalization stages. Research limitations/implications – For Chinese SMEs, co-location in a market platform in foreign market offers the advantages of lowering institutional distance and uncertainty as the firms collectively handle these matters. A limitation of the study concerns the generalizability, as few cases are studied. Still, being an unstudied phenomena there are important empirical contributions to be made. Originality/value – The paper reports on an overlooked empirical phenomenon, namely the establishment of Chinese wholesale and retail market platforms in China and Europe. Through this establishment a new collective route into the global market by Chinese SMEs is identified and theorized.

Strategic issues in supply chain management of Indian SMEs due to globalization: an empirical study

2020 ◽  
Vol 27 (3) ◽  
pp. 913-932 ◽  
Author(s):  
Rajesh Kumar Singh ◽  
Ravinder Kumar
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Resource Constraints ◽  
Small And Medium Enterprises ◽  
Survey Instrument ◽  
Global Market ◽  
Successful Implementation ◽  
Chain Management ◽  
Content Type ◽  
Strategic Issues

PurposeIn globalized market, organizations of all sizes are having huge opportunities for growth. However, due to various resource constraints, it has become challenging for small and medium enterprises (SMEs) of growing economies to survive in this global competition. Effective supply chain management (SCM) can be a major driving factor for success of Indian SMEs in dynamic world economy. SMEs face many operational challenges while implementing effective SCM. The purpose of this paper is to study different strategic issues for successful implementation of SCM in Indian SMEs.Design/methodology/approachA survey has been conducted in Indian SMEs of different sectors. Major constructs of survey instrument are motivations, hindrances, investment priorities, supply chain practices and performance. In total, 1,500 Indian SMEs have been approached for collecting response through survey instrument. 257 complete responses were finalized. Statistical analysis of data acquired from survey is performed by using SPSS software.FindingsIt is observed that managing customers, organization resources, and inventory are main SCM practices. Major investment areas are systems for developing quick response and quality management. Currently, human resource and knowledge management have been found to be less priority areas for SMEs. The major focus of Indian SMEs is on cost and lead time reduction by having effective SCM.Originality/valueNovelty of this study is that strategic issues for effective SCM in context to Indian SMEs have been analyzed. The findings of the study will help Indian SMEs in doing strategic planning for being competitive in the global market.

Retail banking in the Middle East will be subdued

2016 ◽  
Keyword(s):  
Middle East ◽  
Economic Integration ◽  
Economies Of Scale ◽  
Banking Sector ◽  
Oil Prices ◽  
Gulf Cooperation Council ◽  
Retail Banking ◽  
Retail Market ◽  
Content Type ◽  
The Future

Significance Low global oil prices are weighing heavily on the profitability of the Gulf Cooperation Council (GCC) banking sector. Moody's Investors Service in March downgraded 26 GCC banks. This raises questions about the future of retail banking in the region. Impacts GCC governments' commitment to developing financial hubs will support retail banking. However, lack of economic integration in the region will prevent regional Gulf banks from benefitting from economies of scale. Fragmentation in the retail market means that each country will be dominated increasingly by their largest banks.

The enigma of franchising in China

2019 ◽  
Vol 41 (5) ◽  
pp. 15-25
Author(s):  
Ilan Alon ◽  
Michael Alexander Kruesi
Keyword(s):  
International Markets ◽  
Primary Data ◽  
Local Market ◽  
Full Potential ◽  
Chinese Market ◽  
Content Type ◽  
Retail Outlets ◽  
The World ◽  
Food And Beverage ◽  
Ranking Countries

Purpose Although China is among the most populated and fastest growing markets in the world, the reason why China’s franchising scale and scope is so limited remains an enigma. The purpose of this paper is to shed light on franchising in China and offer strategies for practitioners to more effectively operate under a franchise model in the Chinese market. Design/methodology/approach This paper reviews both literature and practical sources providing some primary data from interviews conducted with franchise industry practitioners in China. Findings The findings of this paper are that foreign entrants to China must carefully consider if they should enter the Chinese market through franchising or if the market may be too difficult to navigate. Franchisors, whose brand is unknown in China or have operations that are too Western-centric, should probably seek international markets closer to home. Those with a high value proposition in the local market and the capabilities to adapt effectively to China’s peculiarities may, however, find a promising and profitable niche to operate in. Originality/value This paper focuses on the under examined realities of franchising in the Chinese market. Based on the previous experiences of franchisors in China, the paper raises seven practical strategies that practitioners can use to more successfully enter the Chinese market through franchising. Although China is among the most populated and fastest growing markets in the world, the reason why China’s franchising scale and scope is so limited remains an enigma. According to the International Franchise Association and International Trade Administration reports, China is among the top-ranking countries in terms of trade opportunities, with the top 100 franchisor sales estimated at ¥428bn (about US$66bn). China is the largest franchise market in the world, with over 4,500 franchise systems and some 400,000 franchised outlets in over 70 industries. However, considering China’s US$13.6tn (2018) economy, this is still far lower than its full potential. In addition, the scope of franchising is limited and is mostly centered in food and beverage and retail outlets, which consists of approximately 40 per cent of all franchisors.

Starbucks in China: What lessons can Starbucks learn from Luckin?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Heidi M.J. Bertels ◽  
David Desplaces
Keyword(s):  
Consumer Behavior ◽  
Business Model ◽  
Undergraduate Students ◽  
Business Strategy ◽  
Chinese Culture ◽  
Business Models ◽  
Corporate Entrepreneurship ◽  
Chinese Market ◽  
Content Type ◽  
Business Model Canvas

Theoretical basis The case integrates frameworks on business models, the business model canvas (BMC) and Porter’s generic strategies in the context of the coffee industry in China. The case enables students to construct a Business Model Canvas for competing companies, analyze the canvas to deduce the generic strategy they are pursuing, and formulate recommendations based on this analysis. Research methodology The case is derived from secondary sources, including publicly available reports and information about Starbucks and Luckin. Case overview/synopsis This case looks at Starbucks in China as it faces a fierce Chinese competitor and evolving consumer behavior. Luckin, a Chinese coffee store company, had seen explosive growth since its inception in Beijing in 2017. By late 2019, its number of brick-and-mortar locations surpassed the number of Starbucks’ coffee stores in China, which had entered the Chinese market two decades earlier in 1999. Luckin’s focused on convenience through leveraging technology and reducing costs by limiting physical stores. Although Luckin’s fortunes turned in March of 2020, after an accounting scandal came to light, Luckin’s success suggests that consumers were attracted to its positioning as a “fast coffee pickup and delivery” provider. The case describes Starbucks’ strategy in China, which it sees as an important long-term growth market. It also describes the strategic activities of fast-growing, Chinese coffee company Luckin and discusses Chinese culture and consumer behavior. Complexity academic level The case is written for undergraduate students enrolled in a business strategy or corporate entrepreneurship course. Given that the case centers on China, it could also be used in international entrepreneurship/business courses.

An exploratory study of Western firms’ failure in the Chinese market: a network theory perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ricardo Godinho Bilro ◽  
João Fortes da Cunha
Keyword(s):  
Network Theory ◽  
Chinese Culture ◽  
Inductive Reasoning ◽  
External Factors ◽  
Business Failure ◽  
Chinese Society ◽  
Chinese Government ◽  
Chinese Market ◽  
Content Type ◽  
Network Failure

Purpose This paper aims to explore the external factors that lead Western firms to fail in the Chinese market, proposing to reveal the main challenges they face in this market, such as culture, guanxi or others. Based on network theory, the authors propose to group failure attributes and actions to predict business failure. Design/methodology/approach Qualitative research based on in-depth interviews is conducted, with a sample of 21 individuals, from former/current managers that did or are currently doing business in China and a person from the Chinese Government. This research resorts to inductive reasoning and to Atlas.ti software to perform the analysis. Findings The findings reveal that it is possible to cluster seven distinct categories of external factors. Additionally, Chinese culture, local partnerships and the “catching-up effect” by Chinese firms are also external factors to be considered. The role of guanxi in China is changing, taking another format, and international companies in the Chinese market must take this into account. Research limitations/implications Several limitations arise in this research, such as information availability and time constraints, sample size and the characteristics of Chinese society (i.e. type of government). This study also proposes further confirmatory research to test the seven clusters proposed. Practical implications Managers can understand patterns of business failures when targeting the Chinese market and use the seven clusters as a tool to address this market appropriately in the future. Originality/value This paper intends to shed light on Western firms’ business failure in the Chinese market. The authors argue that several external factors linked to network surroundings contribute to Western firms failing in this market and that network failure attribution is still an understudied topic.

scholarly journals Local horizontal network membership for accelerated global market reach

2019 ◽  
Vol 36 (1) ◽  
pp. 6-30 ◽  
Author(s):  
Paul Ryan ◽  
Natasha Evers ◽  
Adele Smith ◽  
Svante Andersson
Keyword(s):  
Secondary Data ◽  
International Market ◽  
Foreign Market ◽  
Global Market ◽  
Born Global ◽  
Market Knowledge ◽  
Content Type ◽  
The Rich ◽  
Horizontal Networks ◽  
Horizontal Network

Purpose The purpose of this paper is to explain how some born global firms can leverage the rich social capital in their local (home country) horizontal network for accelerated international market entry and growth. Horizontal networks warrant separate attention from their vertical counterparts, which, along with those focussed on external international contexts, dominate most network studies in the realm of born global research. Design/methodology/approach The study utilises a multi-level qualitative approach in the study of a multi-firm population of animators in Ireland that, due to the small domestic market for their product, needed to pursue global customers from inception. The case study domain was purposely selected as a critical exemplar of a local horizontal network operating in a highly globalised industry. The authors collected data through in-depth interviews with 16 company founders. This primary interview data were complemented by interviews with staff at the apposite industry association and triangulated with secondary data on the local and global industry conditions, members’ international successes and awards. Findings The results demonstrate how active membership of a local horizontal network can be leveraged for the acquisition of international market knowledge and customers for born global ventures. This arises from the sharing of collective market knowledge and communal global customer information within the network to mutual benefit. Originality/value Although limited by the specific conditions in this highly globalised, non-competitive industry context, this study is unique in that it finds that cooperative interpersonal and inter-firm relationships embedded in a local horizontal social network, and mediated in part by an institutional support actor, emerge as important levers for a born global’s accelerated acquisition of foreign market knowledge and of global customers.

An acquisition or a greenfield subsidiary? The impact of knowledge on sequential establishments in a host country

2020 ◽  
Vol 37 (2) ◽  
pp. 377-396
Author(s):  
Anders Pehrsson
Keyword(s):  
Host Country ◽  
Foreign Market ◽  
The United States ◽  
Local Market ◽  
Content Type ◽  
Knowledge Based ◽  
Greenfield Investments ◽  
The Impact ◽  
Establishment Mode ◽  
Wholly Owned Subsidiaries

PurposeEstablishment of wholly owned subsidiaries in a foreign market is central to international marketing because sole ownership and high commitment facilitate firm's marketing in the local market. Drawing on knowledge-based theory, this study extends the current understanding of firm's sequential establishments of wholly owned subsidiaries in a host country.Design/methodology/approachSwedish firms' establishments of wholly owned subsidiaries in Germany, the United Kingdom and the United States were analyzed using a longitudinal approach.FindingsA firm's broad international experience is associated with an acquisition in any phase, while mode experience and value-adding experience are associated with postinitial acquisitions. There is no association between mode experience and greenfield investments.Research limitations/implicationsKnowledge-based theory explains a firm's choice of establishment mode when establishing in the same host country. Effects of marketing experiences are due to the establishment mode and different experiences explain choices for initial and postinitial establishments.Practical implicationsIn choosing between a wholly owned subsidiary in terms of an acquisition or a greenfield investment, for a foreign establishment the firm is advised to consider the impact of marketing experiences and establishment phase.Originality/valueResearch is needed on how experiences affect choices between foreign establishment modes where the firm is the sole owner. This study is the first to focus on the choice between wholly owned subsidiaries in terms of acquisitions and greenfield investments, and the impact of experience and phase of establishment in a particular host country.

Taking a prospector local-market focus and foreign subsidiary performance: evidence from China

2019 ◽  
Vol 57 (3) ◽  
pp. 569-582 ◽  
Author(s):  
Po-Yen Lee
Keyword(s):  
Business Environment ◽  
Local Market ◽  
Chinese Market ◽  
Content Type ◽  
Impact Performance ◽  
Political Ties ◽  
Managerial Ties ◽  
Market Focus ◽  
And Performance ◽  
Business Ties

PurposeThe purpose of this paper is to examine the relationships among taking a prospector local-market focus, managerial ties (business ties and political ties) and performance in the Chinese market.Design/methodology/approachThis study, using a sample of 371 Taiwanese subsidiaries of multinational corporations (MNCs) in China, applies regression analyses to investigate the following questions: does taking a prospector local-market focus negatively impact performance? Do managerial ties (business ties and political ties) positively impact performance? Do these managerial ties positively moderate the effect of the taking a prospector local-market focus on performance?FindingsTaking a prospector local-market focus negatively impacts the performance of MNC subsidiaries. Business ties positively impact the performance of MNC subsidiaries, as do political ties. Finally, the impact of a prospector local-market focus on performance is positively moderated by business ties.Practical implicationsThe Chinese market is still aguanxiexchange business system and political connections usually require significant investment in exchange for advantageous market conditions. Thus, political ties must be carefully considered by MNC subsidiaries when they employ a prospector local-market focus in the Chinese business environment.Originality/valueFirst, this study clarifies the key relationship between the strategic choice of taking a prospector local-market focus and performance of MNC subsidiaries in the Chinese market. Second, it identifies the moderating role of managerial ties (political and business ties) in influencing the relationship between a prospector local-market focus and subsidiary.

scholarly journals The future of Airbnb in China: industry perspective from hospitality leaders

2020 ◽  
Vol 75 (4) ◽  
pp. 609-624 ◽  
Author(s):  
Dujun Qiu ◽  
Pearl M.C. Lin ◽  
Sandra Yanping Feng ◽  
Kang-Lin Peng ◽  
Daisy Fan
Keyword(s):  
Chinese Culture ◽  
Mainland China ◽  
Tourism Industry ◽  
Chinese Market ◽  
Negative Effects ◽  
Group Discussions ◽  
Content Type ◽  
Top Executives ◽  
The Future ◽  
Accommodation Sector

Purpose This study aims to investigate the development of Airbnb in China from the perspective of hospitality leaders by identifying the positive and negative effects of Airbnb development in the country. Design/methodology/approach A qualitative approach was adopted to explore the current development of sharing accommodation service in China. Focus group discussions were conducted with the managers and top executives of hotels in China. Findings Most of the participants affirmed that the experience of local culture and authenticity are the advantages of staying in this type of informal accommodation. From the viewpoint of hoteliers, traditional accommodation is necessary to rethink their strategies by providing authentic experiences. By contrast, Airbnb service may not seamlessly fit into Chinese culture. The result also indicated that there is a need for government to regulate the informal accommodation platforms. Practical implications This study provides views towards Airbnb from the traditional accommodation sector in Mainland China, which can contribute to the future regulation of informal accommodation services. Originality/value Chinese market is the leading sector in tourism industry. With the popularity of Airbnb development around the world, Airbnb is still in a developing stage in Mainland China. This study is based on 45 hoteliers and industry professionals in China, who share their views on Airbnb development and how it should move forward. The findings of this study shed light on the informal accommodation service and its future directions in China.

Foreign participation and internationalization intensity of African enterprises

2018 ◽  
Vol 35 (4) ◽  
pp. 560-579 ◽  
Author(s):  
Bedman Narteh ◽  
George Acheampong
Keyword(s):  
Market Competition ◽  
Foreign Market ◽  
Local Market ◽  
African Countries ◽  
Cross Sectional ◽  
Content Type ◽  
The Relationship ◽  
Push Factor ◽  
Positive Effect ◽  
Enterprise Size

Purpose The purpose of this paper is to establish the relationship between foreign participation in enterprises in Africa, their internationalization intensity and the associated moderating conditions. Design/methodology/approach The study utilized data from the World Bank enterprise surveys in 46 African countries across seven years. The hypothesized relationships are estimated using the Heckman two-stage pooled cross-sectional model to correct for selection bias. Findings The findings show that foreign participation in enterprises has a positive effect on internationalization intensity in Africa. While we observe this positive effect, we also found that there is a lot of heterogeneity that accompanies this effect based on enterprise size, financial performance and local market competition. Research limitations/implications The study contributes to the internationalization literature by showing that foreign participation in local enterprises can have a positive effect on the internationalization propensities of these enterprises. It also shows that the main effect is heterogeneous as it is moderated by other enterprise and environmental factors. Practical implications Enterprises should recognize the positive effect that foreign participation in them can have on internationalization intensity. Managers of African enterprises need to look beyond the investments into enterprises that foreign owners offer and take advantage of their foreign market knowledge and legitimacy. Discrimination in local markets could be considered as a push factor to internationalize. Originality/value While the study is not the first to explore the relationship between foreign ownership and internationalizing behavior, it is one of the earliest to show that the relationship is heterogeneous, and it provides some key moderators.

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