Unlike the other global markets, the Chinese market tends to be quite unique. While the United States market proves to be quite expensive for most companies to operate in, the new environment is much cheaper. The stringent regulations put in place by the government to regulate the market in the US market are more flexible within the Chinese market. It is therefore expecting that some of the costs incurred in the old environment will be cut down in the new market in China. As a management consultant contracted by XYZ foods, an American based company in their strategy to move into China, my role is to oversee their transition into the new market. This study strives to make a comparison between the two markets and outlines the benefits as well as the challenges that the company is likely to face as a result of relocation.
Strategy …show more content…
As a result, it has become quite challenging for new firms that want to expand their operations into the market. To be in a position to survive within the market, XYZ foods must choose a strategy that minimizes the initial cost and at the same time gives them a global outlook. In this case, the best strategy will be the Franchising strategy. This strategy has proved to work well in countries in North America that tend to have highly competitive business environments (Chen, 2016). This strategy will suit the firm because it has a reputable company model that can be simply transferred into the new market. However, for this model to work effectively, the firm will need two caveats. One of them currently exists in the company in the form of their strong brand recognition thereby making it easy for it to be used internationally. The firm will just need to work on using the franchise to create or intensify any future competition (Chen,
Strategy …show more content…
As a result, it has become quite challenging for new firms that want to expand their operations into the market. To be in a position to survive within the market, XYZ foods must choose a strategy that minimizes the initial cost and at the same time gives them a global outlook. In this case, the best strategy will be the Franchising strategy. This strategy has proved to work well in countries in North America that tend to have highly competitive business environments (Chen, 2016). This strategy will suit the firm because it has a reputable company model that can be simply transferred into the new market. However, for this model to work effectively, the firm will need two caveats. One of them currently exists in the company in the form of their strong brand recognition thereby making it easy for it to be used internationally. The firm will just need to work on using the franchise to create or intensify any future competition (Chen,