MARKET PENETRATION STARTEGIES INTO CHINA
There is no doubt that mainland China is now the world's single largest marketing opportunity. No wonder that China has now been given "Most Favored Nation" status by the U.S., despite its continuing human rights violations and its less-than-democratic government. Dollar profits speak louder than workers' agonies. Of course, China itself is now producing entrepreneurs and offering assistance in building plants, finding adequate labor forces and distribution points for world-wide export.
Most analysts as well as human resource specialists now view China as not merely a profitable market to enter, but also are less concerned about government interference in Western businesses established there. One has to look at the long-range picture, not merely past indignities. "In the past 20 years, the Chinese economy has increasingly become highly export oriented, and since the mind-1990s the country has been the second largest recipient of FDI world wide (second to the USA). This is largely due to two factors- investment incentives offered by the Chinese government and the country's abundance of cheap labor" (Cooke 2004 35). The fact that the government is interfering less and less with overseas-owned companies setting up shop on Mainland China is also encouraging. But, extreme caution is urged. "One cannot simply walk into China and set up shop overnight. It requires a careful analysis of the country's cultural values and political and economic systems" (Swaak 2005 1).
China has now passed legislation which will give far greater opportunities for foreign investments. Previously, "foreign companies seeking to enter China's retail market were required to have Chinese partners to set up stores anywhere in the country" (Anon 2005 1). Now there will be no sales requirements or partnerships necessary. However, pricing strategies may backfire. Wal-Mart caused some agitation amo...