China, over the last 30 years or so has achieved extraordinary economic growth, leading to gradual market liberation. Despite this China remains a one nation state with HR practices steeped in Confucianism, however The Chinese government is committed to supporting outward investment for companies looking to expand overseas. (IBM, 2006). There are many influences to consider when deciding which country to invest in, this essay will consider the cultural, economic, political, and industrial relation factors a Chinese steel factory must consider in deciding whether to open a new production facility in Britain or Sweden. After considering these issues, based on the evidence the essay will conclude with a recommendation on which country is the most viable to invest in.
Chinese steel producers are predominantly government owned, it is also highly subsidised, contrary to basic market forces. Any new production facility would elicit concerns that the company would be operating at the behest of the Chinese government rather than market principles. (Industry Today, 2011). If this were to happen, the Steel Company would fall foul of UK anti competition laws, which prohibit anti-competitive practises (Smith, 2012). Despite this, the UK has few barriers to FDI; also, the UK is currently well served in the steel industry by Tata steel, a large multinational Indian company that has recently opened a new production plant in the UK to deal with rising demand (BBC, 2014). This is in contrast to the Sweden steel industry, which currently operates at under capacity due to subdued demand. (SBWire, 2014) although similar to the UK, Sweden has few barriers to FDI and have similar anti competition laws. (State.Gov, 2014).In view of this, anti-competi...
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...tions to 2040, U.S. Government Printing Office.
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For decades, the steel industry has been one of the toughest markets on a global scale with most steel corporations ending up in bankruptcy. Foreign and domestic competitors, management issues, environmental issues, political agenda’s and technology have had much to do with the demise and more so of the success of the steel industry. The issues that this case focus on Nucor Corporation was of:
The article also give snap shot of the foreign companies who misjudge the Chinese culture, competition, size the market, and some other factors, have been badly affected by investing in china.
... Additionally, the hurdles imposed by the government agencies will impact the cost of sourcing from China adversely and will have a negative impact on the profitability for the company.
With the development of China, the economy of China has become the World’s second largest after the US. On the other hand, the ...
Shirley Ye, Sheng, and Yan Ma. "China Vs. The United States: Market Connections And Trade Relations." International Journal Of China Marketing 2.1 (2011): 45-57. Business Source Complete. Web. 13 Dec. 2013.
Today, many companies enter the global market, and some companies have become extremely successful in the global marketplace and others still struggling. In Theodore Levitt’s article “The Globalization of Markets”, he states that a well managed corporation focuses on selling standardized products with high quality and low priced instead of focuses on selling on customized products with high cost. Levitt defines the differences between multinational corporation and global corporation, and adopts many specific examples to proves his view. He defines the multinational corporation who operates in many countries and adjust its product based on the taste of specific region. This will result in a high cost to produce the product because company have to input more resource into each individual product. However, global corporation sells similar product worldwide at relative low cost. According to Levitt, the cultural differences are becoming more and more “homogenized”; therefore, becoming a global corporation will lead to the successful of the company in the global market.
Political and legal considerations were given first priority in this analysis with primary emphasis given to whether a country's legal or political system prohibits or impedes foreign investment. If a country's political or legal system discouraged or prevented foreign investment, that country was disqualified from further consideration. Factors considered when assessing the political and legal environment:
Introduction In the reading "A first time expatriate's experience in a joint venture in China" we have come to understand the nature and structure of the joint venture between the U.S.A. and China and the role that James Randolf played in strengthening and maintaining the international partnership. Controls Inc. was a subsidiary of the parent company Filtration Inc. and so was shielded from any outside competition. When Controls Inc. was given the charter to pursue its own business, they realized the need for being cost effective as a result of which they started an operation in Singapore with the name Controls Asia-Pacific with the prime objective to have a presence in the region and to study and evaluate any possibility of a joint venture. James has been an employee of Controls Inc. for the past 23 years with experience in managerial positions of about 15 years.
In the year 2007, China and India ranked first and second respectively in the list of ideal foreign direct investment (FDI) destinations, according to A T Kearney, a global strategic management consulting firm (The Press Trust of India Limited, 2007a). The two nations, because of their similarities in geopolitical, economic and demographic aspects, are often compared with each other. To determine which one is more attractive for businesses to expand to, this essay will examine the business environment of both countries from the following perspectives: political/legal, economic, socio-cultural and technological.
Basically, there are 2 major things happening in steel industry: globalization and consolidation between steelmakers. China as a leading consumer of steel also heavily influences the industry. The recent article from The Economist below actually answers both questions and gives great examples :
Global segment include relevant new global markets, existing market that are changing, important international political events, and critical cultural and institutional characteristic of global market. When company entering the global, it automatically can increasing number of people believe or consumer in the multiple nation and this si...
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.
Svensson, G., 2001. 'Globalization' of Business Activities: A 'Global Strategy' Approach, Management Decision, 39(1), pp.6-18.
15. Hill, Charles W.L. International Business: Competing in the Global Marketplace. New York : McGraw-Hill, 2007.
The rise in China from a poor, stagnant country to a major economic power within a time span of twenty-eight years is often described by analysts as one of the greatest success stories in these present times. With China receiving an increase in the amount of trade business from many countries around the world, they may soon be a major competitor to surpass the U.S. China became the second largest economy, last year, overtaking Japan which had held that position since 1968 (Gallup). China could become the world’s largest economy in decades.