BARRIERS TO ENTRY

China Market Barriers to Entry

China Market Barriers to Entry

Introduction

China is a populous country on the fast growing demand for consumer goods, fast moving consumer goods industry, which has brought to China a rare opportunity for development. As the industry barriers to entry low, fast growing consumer products companies, the increasing homogenization of the product, market competition more intense.

There are a number of different things that we can count under the umbrella of organizational behavior. The proper management of organizational behavior can have numerous strategic implications for an organization. The first thing that is affected by the organizational behavior is productivity. Organizational behavior can have a direct impact on the employee productivity. Good productivity in an organization is an outcome of motivation, and motivation flourishes in an effective climate. The concepts of productivity and organizational culture are inter-linked and tightly related to each other. In unardoned words, we can say that productivity is the skill of delivering products of the company to the customer at the lowest possible cost and with the best possible quality. However, it is not just related to the concept of acquiring quality raw material at the lowest price; but we need to focus on providing atmosphere to employees that would help them in working hard. Organizational culture is an integral part of the organizational behavior, and there are a few elements of organizational behavior (Watson, 1997, 36).

Chinese Market

The Chinese market is a quite alluring market, not only because of its size. This thesis deals with the difficulties and market entry barriers that foreign investors have to face when starting to do business in China. In the first parts I try to find the causation for different barriers that exist today by shortly describing the history of China and the effects of the Chinese history on today's situation. To understand better the economic situation concerning foreign direct investment in this time, the next two chapters explain the Basic Law as well as the economic system of China. Market before I start dealing with the different entry barriers, I talk about the reasons to invest in China, the economic data and the chances for foreign investors to survive on the Chinese. Furthermore, I describe some economic theories, Which deal with the question why market entry barriers exist and what they are trying to effect.

To approximate to the main part of the thesis, I start describing the different types of foreign direct investment in China, Which are possible - the EJV, CJV, WFOE, FICL, the representative office and the holding company. Which are the differences between these forms or types? Which form is best suited for which type of business? Then we come to the question which entry barriers occur now if I opted for one form of company or joint venture to start doing business in China. First, there is a difference made between tariff-and non-tariff barriers. Non-tariff barriers are the preservation of the authorization to do foreign trade, the quota-and licensing system in China, quality ...