Doing Business in China

Résumé du document

Today, “the 30 larger retailers in food in the world are in 85 countries, compared to 15 countries ten years ago” (US Dairy Export Council, 2003). The French group Carrefour, 2nd in the world food distributor, was created in 1959 by two French families called Fournier and Defforey. It was in 1969, that Carrefour started to implant itself overseas with the opening of one hypermarket in Belgium. In 1995, Carrefour operated an important overseas strategy operation because it opened its first hypermarket in China. Carrefour was already present in Asia because of the opening of a hypermarket in Taiwan in 1989 and in Malaysia in 1994 (Carrefour, 2006).
It is thanks to the globalization that, now, Carrefour is the first world food distributor in Asia but, also, in China with more than 30 hypermarkets in China (Université de Pau et des pays de l'Adour, 2001). In fact, the globalization allows all the companies to work and to implant themselves in all the markets they want. Because everybody knows that, today, the goal of each multinational is to make the most profits that they can. Carrefour has known very early that the importance of the emerging market was an opportunity for it. It is why; it was one of the first world food distributors which implant itself on this market. It is true that emerging markets are a good opportunity for the companies to expand and to increase their activity, their notoriety and their profitability. But it represents also a lot of risks. The companies which want to enter on new markets are not only confronted to a lot of economical risks but also to some cultural and intercultural problems as the language, the differences of customs which can be a success or a failure for the internationalization strategies of companies. In fact, sometimes, it is hard for a company to integrate a market not very known. It was the case with the failure of the entrance of Carrefour in the US market in 1992 (La tribune, 2002).
It is why, this work will highlight the cultural differences to do business between France and China that Carrefour has already met when it did is first entrance in the Chinese market. First of all, this business report will give the definition of the problem with some informations about the contextual factors, the cultural factors and the difficulties and the obstacles that Carrefour could meet in this implantation on this new market. Thanks to these informations, this business report will allow to Carrefour to see the possible options and recommendations to succeed it entrance on the Chinese market.

Extraits

[...] References Books AMBLER, T. (2000), Doing business in China, London: Routledge. JANDT, F.E (2004), An introduction to intercultural communication, 4th edition, United States of America: Sage publications. [...]

[...] Moreover Carrefour has been able to follow intercultural communication rules in order to overcome the many different problems which emerge during collaboration between two different cultures. About the successful establishment of French companies in China, it depends on their cultural communication and, companies have to make some efforts in order to integrate the best possible the host country. It is why, it is important to do a business report before to creating a strategy. The first thing that companies which want to enter in new markets have to do is to learn the language of the host country. [...]

[...] Concerning the masculinity, French and Chinese cultures are quite similar because, in fact, France has a score of 40 and China of 50. Concerning the long terms orientation, it indicates that Chinese society is based on the respect and the tradition and that it supports a lot of persevering and strong work which is not the case in France. So, there are quite a lot of differences in the culture of the company's country and the host country and it can create different problems and obstacles (Geert Hofstede cultural dimensions, 2002) Difficulties and obstacles The difference of culture creates difficulties for doing business between France and Brazil because many points in the two cultures are quite different. [...]

[...] This part will try to identify those reasons and to describe the large scale distribution sector. First of all, China has a level of economic risks acceptable with a huge potential for large scale distribution companies: Political risks: Chinese Communist Party founded people's Republic of China in 1949 and brought political change and has affected religion and traditional cultural values” (An introduction to Intercultural Communication, p.204, 2004). But today, there do not exist so many political risks in this country. [...]

[...] In 1995, Carrefour operated an important overseas strategy operation because it opened its first hypermarket in China. Carrefour was already present in Asia because of the opening of a hypermarket in Taiwan in 1989 and in Malaysia in 1994 (Carrefour, 2006). It is thanks to the globalization that, now, Carrefour is the first world food distributor in Asia but, also, in China with more than 30 hypermarkets in China (Université de Pau et des pays de l'Adour, 2001). In fact, the globalization allows all the companies to work and to implant themselves in all the markets they want. [...]