Internationalization In China Essay

1377 Words 6 Pages
Internationalization is a key strategy for businesses to survive the economic crisis, to develop their business effectively and efficiently. Since China’s WTO entry, internationalization has become the urgent problem of Chinese firms. In order to develop their business effectively and efficiently, firms has to establish their steps and to continue the growth increasingly more global and competitive markets.

The purpose of this study is to gain a better understanding of the internationalization process of the firms, particularly the usefulness of the three main theories including Dunning’s eclectic paradigm, Uppsala Model and Porter’s Diamond Theory, to explain why and how Galanz to have internationalization.

China dominates world manufacturing
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According to the Uppsala Internationalization Model, there are four different modes of entering the international market: (i) No regular export activities (ii) Export via independent representatives (agents) (iii) Establishment of overseas sales subsidiary and (iv) Overseas production/manufacturing unites. These four modes follow a sequence from low to higher degree of internationalization (Andersen 1993). After analyzing the foreign market entry strategies of Galanz, we can find these stages are followed accordingly.

In the first stage of Galanz’ internationalization, the company entered the market by signing an OEM (original equipment manufacturer) contract with Toshiba, for manufacturing microwave ovens. After OEM, they started the export sales rapidly and supported by strategic global partners and 1,000 overseas distributors, Galanz sells its products to nearly 200 countries nowadays.

The establishment chain of Galanz:
Export via Agent (OEM contract (with Toshiba); export to 67 countries and regions including US, UK and Japan)→ Foreign Subsidiaries (established R&D centre in Hong Kong, US, South Korea and China)→ Overseas Manufacturing (FDI in

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