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Abstract:

Purpose – Alert global firms that China plans to become an incubator for top companies rather than simply a low-cost manufacturing base.

Design/methodology/approach – Outline the strategies for MNCs to penetrate China's expanding market and defend their global position.

Findings – MNCs have figured out the six keys to success: differentiate your products, bring production costs down in line with local cost structures, design offerings for local tastes, create smart partnerships, develop close government relationships and hire strong, “China-fluent” management, both local and expatriate.

Practical implications – Actions for MNCs to take: Develop Chinese toehold operations into self-standing and profitable units. Dramatically reset the standards for cost competitiveness. Protect the value segments in your core markets. Treat human resource management as a strategic global function. Accelerate and globalize R&D. Ensure that each business is delivering what it promises to core customers.

Originality/value – Assesses the strategic strengths and weakness of MNCs and potential Chinese rivals.

Keywords:

China, Multinational companies, Organizational buying behaviour

Article Type:

Viewpoint

Article URL:

http://www.emeraldinsight.com/10.1108/10878570710717281

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