BMW TAPS THE EMERGING CHINESE LUXURY MARKET 1) There is often a natural tendency to assume that in collectivist cultures such as that in China, luxury products would not be popular. a) Explain how luxury products such as the BMW automobile might fulfill needs even within the traditional collectivist value set of China. Luxury products and brands are important to consumers in both individualistic and collectivistic cultures. The changes in traditional values are happening in developing countries such as China, particularly among the wealthy, young, urban set. Thus, companies can and do successfully use self-expressive and individualistic marketing messages even within China.
What long-term strategy should Wal-Mart adopt in China? What Should Wal-Mart Do? Although the continued market expansion into China may seem desirable, Wal-Mart should slow expansion in China until infrastructure expands to support its unique distribution system. China’s under-developed highway network severely hampers Wal-Mart’s effort for efficient distribution. Instead of ending operations, it is important for Wal-Mart to remain a viable competitor in the Chinese market and not completely abandon its foothold gained thus far.
Wal-Mart is currently the largest purchaser of Chinese products. This shift in policy caused the loss of American manufacturing jobs once again. The aggressive marketing of Wal-Mart, its purchasing power and intent to provide very inexpensive goods to the consumer has shut down many local merchants. Even with continued resistance in many communities, Wal-Mart has continued to expand
A time it took place many times the documentary China Blue such as when there were Americans and people from other countries came to observe the factory. It has a big impact on buyers who plan to retail in stores, in a positive way reducing cost of bulk. This is because there is a reduction in international barriers such as tariffs, export fees, and import quotas. The losers in globalization as shown in documentary china blue are the workers at the factory. Workers become losers in this process because the producers have to sell their products close to dirt cheap which causes them to work more for cheaper.
China The massive trade surplus, large foreign exchange reserves, low cost of goods, and massive market size are the main strengths of the country. The economy is still undergoing a transition to more of a market economy. However, policy makers are committed to making these changes (China Business Forecast, 2014). Some of the weaknesses in the Chinese market is the over-supply of residential housing, resulting in ghost cities. The banks are under-capitalized in their inadequate financial system and this increases China’s banking sector risk (IHS, 2014).
1. How important is the political environment in China for the Darby Company? Please explain. After reviewing the case “A Chinese Adventure” it is evident that many pros and cons are presented to the Darby Company. Darby Company faces huge political challenges when entering an agreement with the Chinese government because of the economy of the country in which China stands.
Researchers found that approximately 1.7 million children suffer from diabetes and 12 percent of Chinese children are overweight. (China today, n.d.) It used to be a rarity to see an overweight person in streets of China, now it is commonplace. Western fast food is high in salt and calories and having a negative impact on the lives of Chinese people. The overall economic growth of China has led to bicycles being replaced with automobiles. McDonald’s has over 26 drive-thrus in China.
A main problem Timbuk2 is dealing with is their customers being unsatisfied with their products being produced and manufactured in China rather than in the home manufacturing site of San Francisco. Loyal customers of Timbuk2 are concerned that the bags made in China will not be of the same quality as the bags made in San Francisco. With customers having concerns, this could reflect the quantity of bags being produced and profit. Another main problem Timbuk2 is dealing with is the complexity of the machinery that is going to be used; this means there will be an increase in labor costs as well as an increase on the purchasing price of the bags. Timbuk2 is handling the problem correctly by making sure that the bags are being made in China are up to the standard of the bags that are made in San Francisco.
With less space each year for landfills and rubbish tips, the process of disposing of rubbish which is not recycled is increasingly being moved overseas to countries like China. Although this may be seen as creating jobs, it is having a major effect on people’s health and the environment. Beijing’s concentration of PM 2.5 particles – those small enough to penetrate deep into the lungs and enter the bloodstream are dramatically rising. The World Health Organization recommends a safe level of 25 micrograms per cubic metre, earlier this year this level rose to 505 micrograms”. (http://www.theguardian.com/world/2014/feb/25/china-toxic-air-pollution-nuclear-winter-scientists Jonathan Kaiman, The Guardian,
1. Mattel’s global sourcing in China, like all other toy manufacturers, was based on both low-cost labor, and a growing critical mass of factories competitively vying for contract manufacturing business. Do you think the product recalls and product quality problems are separate from or part of pursuing a low-cost country strategy? No, I do not think that the product recalls and product quality problems are separate from or part of pursuing a low-cost country strategy. There are many industries have been using the low-cost country strategy for their sourcing for many years, so when there are any cost increases on the cost producing the products, the suppliers will try to reduce their cost by using all the ways.