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Brand X Case Study

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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...

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...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.
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