Intercultural management, electronic arts in China: strategic plan

Résumé du document

Electronic Arts, an American company specializing in video games wants to expand its products all around the world where there are opportunities. The American company founded in 1983 and based in Redwood City in California, is today one of the top ten companies as video game producers in the world. The success of the company is due to many factors. The first one is the fact that the company bought many important licences that could lead to blockbusters: sport ones like NBA, FIFA or also movie ones like Harry Potter or The Lord of the Rings. Also, Electronic Arts is at the origin of many different blockbusters such as the Need for Speed series and the Sim's ones. The products are sold in many countries that accept and consume video games like the Americans. Now with the emerging economy and the rising number of people, China represents a real opportunity for many different industries. Entertainment is one of them. So many video game producers and machine producers such as Nintendo or computers equipped with Windows are trying to get the best market shares before the market is full. Electronic Arts have to act rapidly in order to have its place in it. China is not a country to underestimate because the population represents 1/6 of the globe, and the economy is growing fast. But there are many points that are necessary to be known before entering the Chinese market.

Extraits

[...] After this good time, the issues begin. To be far from his family and friends is difficult to support, so as the USA's customs and the American way of life. One thing which is very difficult also is the fact that the expatriates begin to be tired with the language because after the touristy time, it is necessary to speak with people seriously but most of the Chinese population do not speak English. This is at the origin of the feeling of being alone which is very bad for the psychological health of the employee. [...]

[...] According to Catherine Sfez, studies manager in China for Sorgem, it is more useful to use what we call projective studies which look like qualitative ones. To understand the market and take the good decisions, this technique is good because Chinese people hesitate to give their opinion but the use of image allows the company to get what really think the customer. Negotiation issues During the negotiation with Chinese business men especially when Electronic Arts will have to negotiate for distribution in many stores and for the testing concept stands, it will be important to consider that: - The Chinese does not mean agree” but understand” - Chinese people work with their which means their networks to decide - The American contract is not the same than the Chinese one and does not have the same juridical value. [...]

[...] There is another point which is also important: this is the fact that Hong Kong has a very developed logistical complex with a harbour, an airport at proximity and roads and railroads that are leading to all the different regions including the other big cities of the country. It would be easier to send the products from the USA and to distribute them to the rest of the territory. The environment of Hong Kong presents many other advantages for companies such as a favourable taxation, administrative, technical and juridical obstacles very low Moreover, this place is politically and economically stable. [...]

[...] They know completely the company, its environment and market, but also what are the concepts of Electronic Arts. China is very different from many countries such as United States or Europe's ones and even Japan regarding culture and what could be made regarding business. From that, it is important; to guarantee the success of this project, to understand how works the Chinese business world and this, day to day. That is why it could be necessary to assist the top managers with subordinates who are hired locally: both China and Hong Kong. [...]

[...] Conclusion For many companies, especially from eastern countries such as European ones and the USA, China is a very difficult country. The culture is so far such as the geographic location. The best way to guarantee the success of the implantation in China of the subsidiary, it would be suitable, to study correctly the country, the manners, and the way to do business before. Also, to spread the risks, it would be useful to diversify the offer to different markets such as softwares but also online games and more if they are opportunities. [...]