Yes, I agree with this statement. Brand X’s main problem was that they did not understand the cultural and market differences between their operations in the West and in China. Firstly, Brand X invested small amounts of capital in China from the early 1990s but without considering a business strategy based on factors unique to the under-developed Chinese system of commerce. Since China is developing countries, the legal system, infrastructure and guideline are developing.(xi) Brand X cannot only invested small amounts of capital in China and without considering a business strategy based on factors unique to the under-developed Chinese system of commerce because China’s undeveloped infrastructure, government regulations, and regional protectionism fragment distribution channels throughout China.( https://wweb.uta.edu/insyopma/prater/IJPDLM%20logistics%20in%20China.pdf) For example, the legal system in China is improving and it cannot protect the foreign investors at this moment. Also, because of the unperfected infrastructure, foreign investors are difficult to find the distribution in China. The product production is also affected since the system in China is not effective enough. The unclear guidelines are the main problem that is faced by the foreign investors since they do not know how to follow the guidelines. (xi) The undeveloped system is influence the business strategy of Brand X since Brand X need to make decision of business strategy by understanding the environment. Therefore, it needs to have more research to remember the market differences. However, Brand X does not remember this kind difference between West and China. There is a developed system in the West but China has not. Secondly, they also used their own promot... ... middle of paper ... ...actories were found to be very immature, subject to guanxi networks, or even non-existent. Brand X only used its own theory and experience to develop its China market. The theory and experience in the West are not useful in investing in the China market. The the legal system, infrastructure and guideline are developing and guanxi is important in China. Brand X did not understand these concept since it did not understand the cultural and market differences between their operations in the West and in China. Therefore, according to Ho and Perry, Brand X must learn to cultivate long-term relationships with distributors and customers. In China, relations with the government appear important as they have a strong influence especially in the industrial goods market. (Ang, S. H. (1998)) Also, Brand X should learn the culture and market difference between the West and China.
On the first board meeting, WRSX board decided not to take the market opportunity in China because of the intended strategy that was made in the strategic choices in order to create efficient local presence first . The client feedback suggests that it is too risky to develop presence in China's market. On the other hand, the feedback suggests that not entering Chinese market will lead to missed business opportunities in the country and with clients looking to create global campaigns there. By that time, the negative impact in entering Chinese market could be in terms of financial and business risk. However, the feedback suggests a positive impact for management of growth, client attraction and retention and leadership capability. The decision to create cultural change in New York, where WRSX already have an office, was taken in complementation to maintain the poor performance of the local agency in US.
These examples illustrate the consequences of culture on brands. In all the three examples, the brands were global brands with operations in multiple markets. Nokia and McDonald recognized the different customer needs and adopted the brand to the preferences of customers. Disn...
...here. In doing so, they can take benefit of the country's vast business opportunities by entirely exploiting their competitive advantages and thus further augment their capabilities. This is particularly significant given that China is and will most likely linger a major goal for direct investment in the world. However, the entry of China in world’s main international trade business is contributing a lot to the opening of overseas capital, highly developed experience, in addition to organization proficiency addicted to the enterprises of Chinese, in totaling up altogether, it would give forward motion to technological novelty and structural modification in the enterprises of the Chinese. References http://english.peopledaily.com.cn/special/WTO/2000031400W103.html http://www.8thnetwork.com/translation.html http://www.wto.org/english/news_e/pres01_e/pr243_e.htm
Belk (2004)have explored the effects of global and local advertising in China, specifically the effects on the consumer views of foreign brands and Chinese brands. The study was conducted with a group of participants of 40 people, with age groups ranging from 20 to 65. The research has found that the responses from the participants were divided in to two. The first segment of participants exhibited preferences favorably directed towards the more globalized views. The other segment of the group was in favor of stronger preservation of Chinese values hence the positive view of local origin products. Furthermore the study has found that the larger part of the participants were still in favor of the western advertising appeals. These western advertising appeals were described to be seen as cosmopolitanism, excitement, modernity, quality, technology, and beauty by Zhou and Belk (2004). However this does not mean that there was an abandonment of feelings of national pride, patriotism, or Chinese values, exhibited by the
In the article 5 Biggest Challenges Foreign Business Face in China. “Cultural misunderstandings arising from miscommunication are one of the biggest challenges which foreign companies face in China. Although there are an increasing number of Chinese people highly proficient in English, it is uncommon to find someone who understands the subtleties of the language and possesses a strong enough understanding of both Chinese and western cultures to navigate delicate business negotiations” (5 Biggest Challenges Foreign Business Face in China).
By learning from its defeat in Germany, Walmart has been able to make progress in its strategy to expand into the Chinese market, which also has a substantially foreign political and cultural environment. Along with its financial capability, advanced supply chain management capability, and information technology capability, Walmart adapted its business strategy to align itself with the local taste. For example, Walmart sources about 95% products locally and hires Chinese citizens to manage its stores. Due to the heavy pollution and poor safety management, Chinese customers are concerned about the quality of products made in China. Walmart developed private label brands priced 10%-40% cheaper than national brands which positively impacts Chinese customers by providing them with high quality products and low prices. (2015, Wal-Mart And China: A Story Of Missing Customer Trust) Currently, Walmart is the third largest retail chain in China, and plans to open 115 brick-and-mortar stores between 2015 and 2017. (2016, Wal-Mart talks Up China Commitment) Walmart also plans to push up its e-commerce business to leverage its huge global product network. But even then, to ensure its future growth in China, Walmart needs to continually monitor its multicultural
CAROLINE. Ever heard the name? A student advertising freelancer. (Still no clue). It was Caroline who designed Nike’s SWOOSH logo for $35 in 1971. (Today you will have to pay a little more than that to buy the swoosh on a pair of ordinary Nike sneakers.)
... conclusion, to compete with the intense competition in today’s fast-food market, KFC China differentiates the company by being innovative. Three significant innovative strategies are localizing the menu, understanding the Chinese culture, and hiring local management. KFC demonstrates that one size fits all approach in the global market does not always work. Many typical Western approach to foreign expansion is to deliver the same products or services as their original establishment. For instance, Domino’s Pizza, an American restaurant chain, nearly failed in Australia due to the underestimation of the need to adapt their offerings to the local tastes. KFC China offers important lessons for global firms. It is essential to know that to what extend the company should keep the existing business model in emerging markets and to what extend it should be thrown away.
China's development is praised by the whole world. Its developments are not only in the economic aspect, but as well in its foreign affairs. Compared with other developed countries, China is a relatively young country. It began constructing itself in 1949. After 30 years of growth, company ownership had experienced unprecedented changes. Entirely, non-state-owned companies can now be more involved in sectors that used to be monopolized by state-owned companies.
Based on the information provided in the L’Oreal case, Yue Sai struggled to grow and capture additional sales in the high-end Chinese cosmetics sector. In the past, L’Oreal attempted to position Yue Sai in several different ways which can be viewed as detrimental to the company image, showing uncertainty as the company struggles to see which positioning strategy will stick. The most recent positioning presented in the case, which desires to “deliver Yue Sai’s longstanding brand promise that ‘Nobody knows Chinese skin better than Yue Sai’”, allows the highest probability of success for the company capitalizing on countless fresh trends in Chinese cosmetics (6). The positioning statement would reflect this new strategy: “For the modern Chinese woman Yue Sai offers a line of high-end cosmetics. Unlike other high-end cosmetics Yue Sai combines traditional Chinese medicine and sophisticated technology adapted to the unique skin type of Chinese women.” Yue Sai saw reasonable success and hope in the new Vital Essential line which utilized traditional Chinese medicine and, therefore, resulted in above average repeat purchases. Continuing to focus the strategy around traditional Chinese medicine should benefit Yue Sai considerably. Another suggested strategy would be to wholly reposition Yue Sai, however this is ill advised. As stated in the case, Yue Sai tried numerous different positioning strategies, which ultimately provided no clear path strategy. Repositioning would show uncertainty in the company, lowering brand value in the eyes of the consumer.
“Linked to a brand, its name is the symbol that adds to or subtract from the value provided by a product or service.” (Aeler, 1991) Like country of origin, brand equity is also one of the reasons why some people want to have a well-known brands in the whole world. Sometimes it is not all about the price anymore because in today’s generation brand is more important than
A brand audit is a detailed assessment of a brand’s current ranking in the market compared to other competitors. It provides information on how the business is performing in the market. A brand audit also aims at examining the image and reputation of the brand as perceived by customers. The two key elements of brand audit are brand inventory and brand exploratory. Brand inventory provides up to date itinerary of how a company markets and brands its products. On the other hand, a brand exploratory is an examination undertaken so as to comprehend what consumers feel about the brand. It seeks to conduct a consumer insight research in order to acquire consumers’ feelings and perceptions. This paper looks into the brand exploratory of Cadbury in terms of the customer-based brand equity (CBBE) model.
...& MAKLAN, S. 2007. The role of brands in a service-dominated world. Journal of Brand Management, 15, 115-122.
The major weakness of the company is its brand recognition throughout the rest of the world. Although there are attempts at expansion of the company worldwide, most of the Western nations have not been exposed to the brand (Ferrell & Hartline, 2011).
...enture into overseas market comes with expectations as well as uncertainties due to unfamiliarity. Charles and Keith, the fashion retailer, has to understand clearly that what appeals in one market might not be accepted in the others and this is almost the same for all industries. Thus, a thorough research on cultural background has to be done before entering an unfamiliar ground.