week 5 preparation sheets

1. Notwithstanding challenging business conditions in China, do you think Australian business needs to exit Europe and America and focus on Asia? Justify your answer.

As seen in the previous few years the Asian market has boom in the world economy. China emerges centre stage and it’s the economy is closely intertwined with the world at large. It is the world’s largest consumer marketplace. The averaged over 10% economic growth while the global financial crisis is going by preceding years; China gains the superpower economy status in the world.

While the subsequent economic downfall and problems in the European and the American zone; The Asian and Pacific Rim economies are still continue to grow and soon expected to be larger than those of the European Union. The growing prominence of the firms like Honda, Toyota and Sony of Japan and the Samsung and Hyundai of South Korea are few of the companies which boost the Asian market in the world.

Hence in spite of challenging market conditions in china, I think Australians business needs to enter the Chinese market rather than focusing on EU and America.

2. How would you set about building relationships with Chinese counterparts in order to establish a business operation there?

The two keys to success are the relationship building, networking and dealing with the ethical, trustworthy people. By setting up business operations in many well placed regions so as to take advantage of inter-regional trade across the countries and with Australia. The other aspect is by joint venture or co- ownership in the business helps to understand the business culture, market strategies, and the mentality of the local investors and the consumer needs.

3. Would it be better to invest in other Asian countries like India (with just as big a population)?

It’s anytime better to invest in the nations with larger consumer market (like India). In past few years Indian market is growing fast and making its place in the world’s economy. India imports on a large scale and the Indian market is wide open for the foreign companies; in last few years with numbers of foreign brands coming in like In cars Mercedes to Ferrari, in IT IBM to Microsoft, in electronic Samsung to Apple and with the food chains like KFC to McDonalds. It is the biggest market for the foreign investors currently. So it’s the perfect time for the foreign investors to enter the Indian market.
As unlike china, the India global business language is English which makes lot of difference to foreign investors to strategies and communicate straightforwardly with the local investors whereas the business policies are also familiar with the foreign markets.

4. What are the best investment strategies for Australian companies in China given the above case?

According to the case study, the best investment strategies included are setting up the business in well placed regions so as to take advantage of inter-regional trade across the country. Developing projects in the remote areas; and setting up business in joint venture or with co- ownership is always successful to establish itself in the new territory.