Options for resistance strategies of local chinese companies against foreign competition in the chinese consumer goods market

Abstract

With the fast-paced globalization and technological revolution, today's world has become an arena that is characterized by rapid economic development and hypercompetitive business environment. In tandem with the reforms from a central-planned to a market-oriented economy, China has emerged as a global power, particularly an economic power. Meanwhile, more and more Multinationals have rushed into the Chinese consumer goods market to seek new and tremendous market development opportunities. For local Chinese companies, the numerous entries of Multinationals have seriously threatened their existing market positions. In order to survive and develop under such circumstances, local Chinese companies have no choice but to resist. The primary purpose of this dissertation is, by using case studies, to examine the options for resistance strategies of local Chinese companies against foreign competition in the CCGM at the corporate strategy level.Based on the theoretical framework of Dawar and Frost's strategy typologies, local Chinese companies have four basic strategic options: defender, dodger, extender, and contender, whereby they can fend off foreign competition and even tap into global markets. Furthermore, local Chinese companies using any of those four options to compete against the entry of Multinationals into their home markets can benefit from forming alliances. However, local Chinese companies should keep flexible, as their internal assets and the characteristics of their located industries keep evolving over time.With the help of five descriptive case studies of local Chinese companies, the research clearly indicates that some local Chinese companies possessing specific advantages have been able to compete effectively against foreign MNCs in certain areas on their home turf. They are anxious to participate in the wave of globalization and are prepared to open a new chapter in the companies' history. Although survival issue is still a big concern for many local Chinese companies today, the rising of local Chinese companies in the domestic market and their further emergence on a global basis are inevitable trends. This is just a time issue.