INTERNATIONAL BUSINESS

International Business

International Business

Introduction

China is, without a doubt, the fastest growing economy in the world today. Companies from around the world have wanted to tap into China's market to cash in on the tremendous success that it continues to experience. There had been many restrictions for foreign companies who tried to do business in China, limiting the number of foreign companies, and allowing only the big players to come into China. Even then, these big players from around the globe faced more restrictions and rules once they entered China. But things have changed since China joined the World Trade Organization (WTO) in 2001; a new milestone for this country, as well as for other economies. Since then, restrictions for foreign investors and businesses to enter China's market had begun to ease up. By December 11th, 2004, China must remove remaining restrictions on the retail sector in order to comply with the WTO rules. This means it will be much easier for foreign retailers to enter the market, and for current foreign retailers in China to expand. Many retailers from all over the world will seize this golden opportunity, and Target should do so too. (Adair, 2005, 643)

Company Overview

Target, a Minnesota based national retail company, has come a long way from being Dayton's department store back in 1961 to being one of the biggest players in United States' retail market, as we know it today. Over the last ten years, Target has experienced a continuous incline in growth year after year. Sales reached over $48 billion this past year, a 10 percent increase from the year prior. Just like its revenue, the number of stores across the United States has been on the rise. Currently there are 1313 Target stores operating in 47 states, including 136 SuperTarget stores in 20 states. Not surprisingly, Target ranks number four in Triversity's Top 100 Retailers in the United States behind Wal-Mart, Home Depot, and Kroger. Globally, Target is ranked number 7 in the top 100 retailers worldwide. With this kind of statistics, Target has the potential and the resources to begin expanding into the international market, such as China. Comparing to Metro AG, a German retailer, which ranks a couple spots ahead of Target on the worldwide list, is not that much ahead of Target in terms of sales. And yet, Metro AG is one of the largest foreign retailers in China, along with Wal-Mart and Carrefour. Not only should Target continue to expand domestically, but it should also start looking to expand in other markets around the world as well, such as China. This will allow Target to become a multinational company and begin creating a global recognition for itself in the retail sector. Now of course Target cannot dive right into the China Market and expect everything to just work out. Like any other company entering a foreign market, there are challenges and factors that Target must consider and evaluate before doing business in ...