Week 1
For this journal, I have chosen to investigate China, and the company I will focus on is Tesla. Today, China has increasingly become more appealing to many American tech giants. Until today, there has not been an American internet firm, which has succeeded in the Chinese market. However, numerous tech giants are still trying to break into this market. Among them is Tesla Motors. Tesla is a US-based multination which specializes in designing, manufacturing and selling electric vehicles and electric powertrain components. Established in 2003, the company has gained massive popularity, and they now plan to penetrate China. I am interested in investigating Tesla in China because many American companies have tried to break into this market without success. However, it seems Tesla is set to outshine these companies as it promises to use a different entry approach. It would be interesting to conduct this research in order to see how Tesla falls or survives in the Chinese auto industry.
This research tries to understand the reasons why Chinese consumers would choose the selected company (Erickson, 2017). It will study things such as consumer behavior which entail how personal, societal and cultural variables influence that behavior. I plan to split my research into two: primary and secondary. I will rely on primary research to study Chinese customers directly while secondary research will provide me with the necessary information, which others have already collected about these customers. Primary research involves going out and finding out for myself about the country and the company. I could do this by using focus groups, online or offline surveys. For this assignment, I will use online surveys because they are quite cheap to conduct and I can easily post questionnaires on LinkedIn and Facebook (Belk et al. 2013). For instance, since we are introducing the company in a new country, I may start by putting up a form asking for feedback. These days, people have become much confident about providing their true view regarding things.
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Further, they no longer hold back, they have gotten accustomed to telling others whatever they think. For my research, this is an added advantage. As for secondary research, I will obtain information from reports, articles, websites, and journals found on the internet written about the country and the company (Erickson, 2017). Though some people prefer to use just one type of research, I plan to use a combination of both.
This research will not succeed if I do not understand the country, the company, and its products. Currently, the competition is fierce and introducing the company in China without understanding this information would give rivals an added advantage. There are two types of data: qualitative and quantitative.
Quantitative research is concerned with measuring and quantifying information through the use of statistical and numerical analysis (Belk et al. 2013). It works from a set of factors to sample a target group, which would be used to measure behaviors, attitudes, and opinions, and then quantifies the findings. Tools like interviews, longitudinal studies, surveys, and systematic observations are used to ask questions that incorporate terms such as “how much, how long and how many” (Erickson, 2017). These questions yield a wide set of data which is then analyzed, generalized and applied to the wider population.
Qualitative research methods aim at looking for information which would describe the subjective and emotional responses using words and not numbers. It delves into the rationales, opinions, and motivations in an attempt to explore the reasons for consumer behaviors and choices as far as the chosen company is concerned. Unlike quantitative surveys, it uses open-ended questions that favor interviews, observations and focus groups (Belk et al. 2013).
The longstanding controversy regarding the validity and merits of each approach has motivated me to combine aspects of both methods. This would make it possible to complement the weaknesses of each other. Moreover, aspects of both methods provide a fully informed picture of the market’s potential. Most obviously, we need a deeper understanding of how Chinese consumers feel about the company; this is a qualitative concern. In addition, since we are interested in hard number regarding product adopters, quantitative data would serve better. It seems the right path to understanding the new market is not clear-cut, and hence, good decisions would only be made by using a blend of qualitative and quantitative approaches (Erickson, 2017).
References
Belk, R., W., Fischer, E. & Kozinets, R., V. (2013). Qualitative consumer & marketing research . London: SAGE
Erickson, S. (2017). New methods of market research and analysis . Northampton, MA: Edward Elgar Publishing.
Week 2
Today, it is widely known that China is a political and economic superpower in the world. Over the past years, this country has enacted various significant policies of change and achieved spectacular improvements in some fields. Analysts estimate that as far as the nominal GDP is concerned, China is the second leading economy worldwide. This journal describes the legal, socio-cultural, and political atmosphere that may affect international businesses in China.
Political
Tesla must be aware of the different political patterns that influence business operations in China (McManus, Li & Moitra, 2007). Of major concern is the Environmental Protection Law that seeks to ensure companies such as Tesla produce environmentally friendly cars which meet strict emission levels. Another important factor is the government energy loan programs for research and development of new vehicle technologies (Zisa, 2013).
Socio-cultural
The socio-cultural factors of China play a vital role because the demographics are constantly changing. As a fast developing economy, China confronts the challenge of an aging populace. Sometimes back, the One Child Policy contributed to economic growth by alleviating the pressure on resources such as education and healthcare. Sadly, this policy has equally left an aging population, which has resulted in a shrinking labor force and a higher dependency ratio (McManus, Li & Moitra, 2007).
In China, lifestyles and trends change in various ways like the consumption level, attitudes towards new products particularly from the United States and changes in the quality of life. Besides this, changes in trends are observed from the sense of taste and preference where people tend to purchase more fancy cars compared to old-fashioned car models.
Legal
China has passed some laws that exert weight on the production of eco-friendly auto (McManus, Li & Moitra, 2007). Recently, China started pressuring many companies in the car manufacturing industry to produce environmentally friendly cars. Increasing consciousness regarding climate change has led to numerous changes in products and operations because Chinese consumers have gotten more mindful of the ecological effects of manufacturing.
In China, labor regulations hinder overall productivity growth and employment. For one, the government controls all types of businesses (Zisa, 2013). Also, the country has a high rate of non-salary cost of employing people. For a company to dismiss an employee, it would require prior consultation with the local labor union and labor bureau (Zisa, 2013).
Based on this analysis, it can be concluded that China is a flourishing economy and it would be the best market for Tesla to try. The company is likely to benefit on condition that it understands the macro-micro environment in which it will operate and function in the future. The stable political conditions and rapid economic development renders this market highly lucrative to international companies such as Tesla. However, no market exists without risks. In this case, the risks include lack of consumer trust. In addition, there is a lack of a stable e-commerce payment system and improper government protection. Combined, all these are major sources of challenges and uncertainties to international companies.
References
McManus, T., J., Li, M. & Moitra, D. (2007). China and India: Opportunities and Threats for the Global Software Industry. Oxford: Elsevier.
Zisa, L. (2013). Positioning and Opportunity Assessment Report with Main Focus on Germany, China, USA, New Zealand . New York, NY: GRIN Verlag
