Can Chinese Brands Make It Abroad?
China is known for its manufacturing due to low labor costs and supplies the world’s biggest brands. Most Chinese companies take on the role of original-equipment manufacturer (OEM). However, due to the home market being so competitive, the Chinese government now wants Chinese companies to tackle the market abroad by establishing their brands in developed countries. Currently, companies have now emerged in developed markets with products such as appliances and consumer electronics. Examples of this include Lenovo computers which have positioned itself for overseas expansion. Keijian, a mobile-telephone maker, sponsors one of England’s top soccer teams to build brand recognition. The way in which Samsung achieved this was acquiring basic product-development skills through joint ventures and more than 50 technology-licensing agreements. On establishing their brand in the US, Samsung discounted their products to target price-sensitive customers. Slowly it learned the requirements of its markets by conducting extensive market research, building sales overseas and manufacturing operations in the US, Germany, the UK and Australia. They also increased R&D budgets which allowed them to invest in products and technologies that would raise their brand profile. China competes against the world’s best electronic products in features, quality and price. Furthermore, its low labor costs make Chinese goods less expensive. Also, China has a large growing pool of skilled engineers and money to invest in new products. By products alone, it is safe to say that China can establish themselves abroad, however, developing the right marketing strategy for branded goods is key. Branding
Before, consumers were reluctant to buy good from Japan or Korea in fear of quality issues and now China is experiencing the same issue. The Chinese companies most likely to succeed are those which have a track record in low-cost, high-quality manufacturing and...
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