A Quest for Repositioning: The Emerging Internationalization of Chinese Companies
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A Quest for Repositioning: The Emerging Internationalization of Chinese Companies Sten So¨dermana, Anders Jakobssonb and Luis Solerc
a Stockholm University School of Business, Stockholm 106 91, Sweden. E-mail: [email protected] b Sveaskog AB, Stockholm 105 22, Sweden. E-mail: [email protected] c Saab Avitronics, Saab AB (publ.), Stockholm 164 84, Sweden. E-mail: [email protected]
When the third wave of internationalization appears in the near future, how will Chinese firms, especially small- and medium-sized companies (SMEs), position their products strategically? The framework of this paper is composed of price/ volume segments and impacts on product strategy theory. The aim is to identify important drivers and focus areas for Chinese companies and measure what role these play in different segments. The survey is a quantitative study based on responses given in April 2006 by 102 Chinese EMBA students currently working, largely as managers, in the Shanghai region. The results indicate that Europe has potential to be a priority target market for Asian companies. Net flows, over time, illustrate how the respondents believe their companies are presently positioned and how they will be positioned in the ‘future’ (year 2010). These net flows indicate that some Chinese companies will reposition themselves strategically when internationalizing and that they will focus on other factors or drivers when doing so, compared to companies adapting the prevalent price leadership strategy. The results should be seen as indicative and as presenting a template for deeper research. Asian Business & Management (2008) 7, 115–142. doi:10.1057/palgrave.abm.9200247 Keywords: China; internationalization; repositioning; future; Europe and EMBA
Introduction How can emerging market firms (EMFs) improve their export performance? The so-called emerging markets or transition economies and their relations with the mature market economies of Europe and North America are creating strong competitive and cooperative forces. Firms from emerging markets are internationalizing and becoming new multinational companies (MNCs). According to certain projections, relations between the EU and Received 11 March 2007; revised 23 July 2007; accepted 4 September 2007
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North America and Asia and South America will change drastically (Jansson, 2007a). For example, a projection made by Goldman Sachs in 2003 of how Brazil, Russia, India and China will grow up to 2050 shows exciting results (Wilson and Purushothaman, 2003). This development was previously noted by Kumar and McLeod (1981) and Lall et al. (1983). However, a developed country’s perspective continues to dominate the literature (Zou and Stan, 1998). Small- and medium-sized enterprises (SMEs) in China work under significantly different conditions compared to larger companies with global ambitions that, with few exceptions, have strong support from local authorities and government (Keister, 2000; Zeng and Williamson, 2003; Deng, 2004; Wu, 200
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