Business and its Environment
Dr. Racz Matron and Dr. Márta Szabados
August 25, 2009.
Factors influencing the multinationals and local companies for the market position.
Couple of years before the policy maker decided to lower down the tariff barriers and to give permission for foreign investment. Multinational companies have started rushing into countries where they wanted to achieve the market position (Arindam K. Bhattacharya and David C. Michael) The entry of multinationals is good for the country as they bring with them newly products, advanced technology, reduce unemployment, and increase in GDP and many more. But it is not as easy as they think to achieve the market position because their entry is threat for the local companies. As local players and competitors started applying their own policies which multinationals cant copy and they keep their market position stable and to fail the multinational companies from achieving the success. But there are some cities where multinationals are successful and that place and cities have become the starting point for commencement of business (Rosabeth Moss kanter).
Multinationals and local firms for the first time are squaring off in China’s rapidly growing middle market, a critical staging ground for global expansion and the segment from which world beating companies will emerge (Orit Gadiesh, philip Levng and Till Vestring 2008).
In 2008, the Orit Gadiesh, philip Levng and Till Vestring says that the world leader Caterpillar in constructing equipment who started selling its equipment to china market as the Chinese government invested highly in the infrastructure, Caterpillar helped the pave for the growth and modernization in the worlds fastest growing market for construction equipment. But now a Caterpillar is having trouble in making deeper tracks in china. This is because of the other competitors from Japan and Korea was in the middle market with tool and equipment that cost less. The other side the tranche of the local a tranche of local manufacturers that had previously been focused only on the low end of the market were burrowing up to battle the established players, designing and releasing their own products targeted squarely at middle-market consumers. (Orit Gadiesh, Philip Levng and Till Vestring 2008 p.82)
A critical new battleground is emerging for companies seeking to establish, sustain, or expand their presence in China: It’s the “good-enough” market segment, home of reliable-enough products at low-enough prices to attract the cream of China’s fast-growing cohort of midlevel consumers (Orit Gadiesh, Philip Levng and Till Vestring 2008 p. 82). The newly start-up companies developing and releasing new products and services should not necessarily need to aim for perfection to make advanced against established players and the phrase suggested for them is "good enough”. These forward-thinking companies (multinational and domestic firms alike) are doing more than just secure the share of wallet and share of mind in China’s rapidly expanding middle market - in and of itself a major achievement. They are sharpening themselves for worldwide competition tomorrow: They’re building the scale, expertise, and business capabilities they'll need to export their China offerings to other large emerging markets (India and Brazil, for instance) and ultimately, to the developed markets (Orit Gadiesh, philip Levng and Till Vestring 2008).
Local Chinese competitors are becoming the biggest challenge to the multinationals searching to profit their business ventures in china (Orit Gadiesh, Philip Levng and Till Vestring 2008 p. 83). It also says that multinationals and Chinese companies should enter the platform for growth and that how to compete...