Global Market Expansion

I have completed my research on the new market expansion; it is my recommendation that we should expand our market to China. Going international can gain our company both broader public recognition and a higher profit margin with our current staff and members.

Background

Last October, our company received an eight million dollar equity investment from Anonymous company. As a result of this investment, the senior vice presidents of Worldwide Marketing, of Anonymous company, were appointed to the Board of Directors. The $8 million will be used for general corporate purposes, which includes the expansion of our company’s Strategic Planning Services, and for funding international growth.

Analysis and Recommendations

We all know that the perspective of business is changing. It is becoming very competitive and the economy and technology changes rapidly. The over-saturation of domestic firms forces many companies to seek better and more greatly diversified market alternatives to expand their business. To develop internationally, this is what companies have chosen and are choosing to do.

Without the knowledge and a clear understanding of how Chinese culture, laws, business regulations, and political factors are involved in starting up a business; there could be a major failure. China has a complex system of trade and investment incentives and disincentives-some of which may work for exporters and investors and some of which may work against them. Its services sectors are open only on an experimental basis to outside firms. One of the most challenging features of gaining access to China’s market is that it is an economy in the midst of reform. Rules and regulations are changing, are often ambiguous, are applied inconsistently, and are nontransparent.

U.S. firms have been hindered from bidding on major projects in China by its non-transparent bidding procedures. Although open and competitive bidding is increasingly used for both domestic and foreign-funded projects, the great majority of government procurement contracts in China are handled through either domestic tenders or direct negotiation with selected suppliers. Projects in certain fields require government approval, from several different organizations and levels. Procedures are opaque. Foreign suppliers are routinely discriminated against in markets where domestic suppliers exist.

China’s legal and regulatory system is characterized by a general lack of transparency and inconsistent enforcement, which creates uncertainty for foreign investors. In China, there are over 150 major laws and regulations that apply to foreign trade and investment. Many of these laws and regulations are still fraught with ambiguity. China’s leadership is attempting to reform the legal system to rationalize the various sets of regulations governing commercial activity. In the past few years, China has made a number of reforms to improve its trade regime. Even if a project meets one or more of China’s investment screening requirements, it may still be rejected. This happens when it is determined that the contract is unfair, that the technology is available elsewhere in China,