International Business Strategy: Case Studies on China and Myanmar

INTERNATIONAL
BUSINESS STRATEGY

1
Case study 1: Will China Continue to be a growth Marketplace
Summary
This case scenario explains that China growth rate is an example for the developing nation.
The major reason for it is the high purchasing capacity of people as the middle and upper
income people in China by 2020 is expected to reach to 200 million. This provides a very
large target market for the companies to extend their reach in the Chinese market place (Tse,
2010). However there are certain challenges like the privacy concern in the market which will
reduce sale of electronic products. There is also cultural challenge that companies in China
had to face as it is highly different from other nations.
Case Questions
China maintaining its strong economic growth
Yes, China will be able to maintain its strong economic growth in the time to come. This is
because the internal consumption in the country is expected to enhance as in just one last
decade this company has taken more than 500 million out of poverty. This is higher than any
of the developing nations in the world. With expected growth rate of 5.5% per year, there are
more foreign investments that will come in China (Allen & Gu, 2015). However due to trade
war between China and United States, there are many sanction imposed by United States on
China. This might have negative impact on the growth of China but in the long term this will
not prevail. On the other hand it is also a fact that Chinese customer do not spend much
unless it is big brand name hence companies will have to spend a lot on marketing.
Chinese consumer behaviour
The new Chinese customers that is having higher purchasing power and it is expected that
these new Chinese rich people will not be so much into the Chinese culture i.e. it is less likely
that Chinese culture will have impact on the behaviour of the people. It is also expected that
this large numbers of people that is having higher purchasing power will improve the
consumption in the country. This is because they will want to enhance the lifestyle they are
living. Companies like Best Buy and e-bay needs to ensure that they are offering best quality
to the people as it is the major thing on which people will lead their decision to purchase
(Helveston, Liu, Feit, Fuchs, Klampfl & Michalek, 2015). New rich consumers will also
allow the competition to rise at the top levels. This rise in the purchasing power of people
will bring new international firms in China which will enhance the competition in the
industry and hence it will benefit the customers in terms of cost.

2
Online shopping culture infiltrating China
There is significant increase in the numbers of customers that is doing most of their purchase
through online mediums. This is also because of the fact that numbers of people that are
using online mediums are increasing especially when it comes to the numbers of mobile
devices that is being used by the customers (Lai & To, 2012). Due to this there is constant
increase in the numbers of people that are from different parts of the world it is expected that
consumer behaviour in China will change drastically. People do not have time these days to
go brick and mortar stores hence online shopping culture is expected to increase in China
(Fenby, 2017). Since online mediums also reduce the operational cost of companies hence
they are able to provide products at lower rates. This will have impact on the purchasing
behaviour of the people as they will get attracted to the online offering by the company. More
competition on these platforms will have significant impact on the attractiveness and pricing
of the firm.
Theories and issues of international business related to this case study
Cultural theories of international business such as Hofstede model of cultural dimension can
be used in this case study so as to understanding the cultural orientations impact on the
purchasing behaviour of people. Along with this, classical country based theory of
comparative advantage and porter’s National competitive advantage theory can be applied. It
also illustrates the international business issue such as change in culture has impact on the
purchasing behaviour of people and hence many businesses fail (Zou, Chen & Ghauri, 2010).
For example due to privacy concerns, electronics companies had to face challenges. It also
illustrated the issue like local demands influenced by brand name. It also illustrate the issue
of higher competition in the market is a challenge for many companies that are not able to
deliver to the customers as bigger companies can.
Case study 2: Political and economic reform in Myanmar
Summary
This case study illustrates the economic stagnation due to failure of government in providing
undifferentiated rural market, economic sanctions placed by other nations and
underdeveloped transportation systems. With the increment in the Myanmar’s growing
dependence on China and western pressure has motivated them to do political and economic
reforms. This country is trying to engage more in international trade and building internal