An Irish firm in the Chinese Market

Résumé du document

Enterprise Ireland, positioned in the cosmetics field, is willing to enter an international market. With 15% of annual growth in the global market, China becomes more and more attractive for businesses all around the world. In Europe, the attractiveness is intensified by the amount of trade exchange between both parts of the planet that has soared since 1987. To internationalize products or brand is not an easy game, whatever the country it concerns. Indeed, several criteria have to be taken into account such as the country's economy, politics and laws, culture and social aspect and so on. In China, difficulties are multiplied due to the political risks and business methods that lean a lot on the social network. Then, to succeed in its globalization trial and profit from the Asian euphoria, the cosmetics firm seeks to get a complete framework.
It will firstly include a complete research on the market characteristic of the global Chinese market and the cosmetic market, secondly the explanations of two market entry strategies with an option for the most suitable one, and finally key organizations in terms of distribution and logistics.

Extraits

[...] To Finish, the match between firm's product and market: Does the firm have to standardize or to adapt the product? Although it exists political risks and many socio-cultural challenges, China remains a market that cannot be ignored in the future. References Bradley F International Marketing Strategy. 4th edition. Prentice Hall editions. Chen Y. and Penhirin J Marketing to Chinese consumers. McKinsey and Quaterly editions. Cui G The evolutionary process of global market expansion: experiences of MNCs in China. Journal of World Business. [...]

[...] In term of internal factors, the firm size is an indicator of the firm's resource availability. Indeed, the SMEs don't profit from enough resources to realize a high degree of control. So they will prefer the export entry mode. The international experience is the second factor influencing the entry mode. In this way, this experience may reduce costs, uncertainty and probability of success. In our case, the Irish SME's haven't any knowledge in term of international market, so it would be preferable to choose an entry mode with a low intensity of control. [...]

[...] Harvard Business Review, vol.38 (May-June) Hollensen S Global Marketing : a decision-oriented approach. 3rd edition. Prentice Hall editions. Hu H.C The Chinese Concept of Face. America Anthropologist. Vol (Jan-Mar) Johnston S. and Beaton A Foundations of international marketing. 1st edition. Thomson Business Press editions.59-84 : culture Lendrevie J., Levy J. and Lindon D Mercator. 7th edition. Dalloz editons. Ooi A. [...]

[...] In this case, the Irish firm entrusts sales and services with agents or distributors. Unlike to the indirect exporting, the direct one performs the export task rather than delegating. To choose between indirect or direct exporting, marketers have to select selling through a manufacturer's representative or through the firm own salesforce. The advantages of this entry mode are not only the raise of sales but also the raise of control, better market information and the development of expertise. Costs are higher with the direct approach than the indirect approach because in the indirect method the costs are shared. [...]

[...] and Wu C and Chen Y. and Penhirin J. 2004). Moreover, Enterprise Firm will gain advantages from the image of European cosmetics which are considerated as luxury ones. To profit from this opportunity, the firm shouldn't adapt its products but standardize it (Lendrevie J., Levy J. and Lindon D. 2003: 969-974). Entry modes The choice of entry mode is very significant for a SME because of the consequences on its profits. Indeed, according to Yip (1982), “Entry is one of the supreme tests of competitive ability. [...]