Breaking into China
Article Abstract:
International firms can adopt different strategies when breaking into an emerging market such as China. This article studies three strategic choices facing multinational corporations (MNCs): labour-intensive vs. capital- and technology-intensive; coastal vs. inland location; and joint venture vs. wholly-owned investment. Using hierarchical regression analysis on data from 223 large, foreign-invested electronics firms in China, we offer interesting findings as to how and why different strategies affect the performance of foreign direct investment. We show that MNCs pursuing a capital- and technology-intensive strategy in China have a significantly better performance than those pursuing a labour-intensive strategy. Our study also documents significant interaction effects between ownership arrangements and technology intensity on firm performance. On the other hand, the effect of a firm's location and ownership arrangements appear insignificant. To compete successfully in China today, firms cannot just focus on cheap labour and the production of low value-added goods; a capital- and technology-intensive strategy is more rewarding.
Publication Name: Long Range Planning
Subject: Economics
ISSN: 0024-6301
Year: 2000
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Strategic Lessons from the Asian Crisis
Article Abstract:
This article looks to the strategic opportunities provided by the recent Asian economic crisis. It suggests that whilst the crisis did require immediate responses, the longer-term issues were equally important. The authors look at different reactions to the crisis. They discuss a variety of strategies, including bargain hunting for assets and making strategic purchases whilst prices are low, forming new alliances to augment or supplant those that already exist, and expanding whilst competitors are weak. They embed their ideas into traditional strategic thinking, touching on issues of competence enhancement, competitor awareness and customer focus. They use topical examples to illustrate their points. Crises will reappear unexpectedly in countries and markets, demanding that firms revisit their strategies. This article provides a framework for thinking about these issues.
Publication Name: Long Range Planning
Subject: Economics
ISSN: 0024-6301
Year: 2000
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The Strategic Reaction of Domestic Firms to Foreign MNC Dominance: the Israeli Experience
Article Abstract:
With the promise of regional peace brought about by political developments in the Middle East in the 1990s, Israeli firms found themselves in a radically changing environment, with multinational corporations (MNCs) making massive inroads into their long-standing domestic monopolies. Firstly, this article demonstrates how foreign MNC positioning has dominated that of their domestic counterparts. Secondly, we describe how this strategic dominance has triggered domestic firms into rethinking their strategies, and turned them into global players. The Israeli experience offers lessons for both foreign and domestic firms in how to develop economies better prepared for a win-win situation.
Publication Name: Long Range Planning
Subject: Economics
ISSN: 0024-6301
Year: 2000
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