foreign company in china

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