Surviving Multinationals in Emerging Markets

This assignment delves into the issues encountered by domestic organisations in emerging markets, such as China, Mexico, Thailand, India, and Indonesia, when faced with the presence of multinational corporations. It also highlights ways local firms can thrive against MNCs, increasing knowledge on research methodology and improving presentation skills.

Research Project

TABLE OF CONTENTS
TITLE..............................................................................................................................................1
TASK 1............................................................................................................................................1
P1. Producing a research proposal...............................................................................................1
P2. Appropriate research methods and approaches to primary and secondary research.............3
M1. Making justification for the choice of methods...................................................................5
TASK 2............................................................................................................................................5
P3. Conducting primary and secondary research using appropriate methods.............................5
P4. Analysing the research findings and data..............................................................................8
M2. Advantages and limitations of data collection and analysis...............................................14
D1. Critical evaluation of research methodologies and processes to justify selected methods.15
TASK 3..........................................................................................................................................15
TASK 4..........................................................................................................................................15
P6. Reflection on effectiveness of applied research methods....................................................15
P7. Alternative research methodologies....................................................................................15
M4. Conclusion and recommendations for improvements and future research considerations 16
D3. Reflection and engagement in the resource process...........................................................16
REFERENCES..............................................................................................................................17

TITLE
Identifying the issues faced by local organisations due to entrance of multinational companies
(MNCs) in emerging markets
TASK 1
P1. Producing a research proposal
Background of research
In the present scenario, firms in emerging nations are getting globalized as they strive to
save their cost of manufacturing and gain more grow potentials. This is leading local firms to
face the issue of increased competition, reduced profits and customer base, decreased market
share, etc. Likewise, one of the largest emerging nations is China in which local organisations
are facing high trouble to survive as to gain higher revenues and increase scope of business,
many multinational companies have entered there which have reduced the demand of local
products and thus, resulting in making local firms difficult to sustain in the long run (Jia, Gosling
and Witzel, 2017). Present study is based on identifying the problems faced by local
organisations with entrance of MNCs in China and suggesting suitable strategies to overcome the
same.
Aim/objectives
Aim – To identify the problems faced by local organisations with entrance of MNCs in emerging
markets – a case study on China
Objectives
 To analyse various issues faced by local companies of China
 To assess the impact of MNCs on competition level in market of China
 To develop the strategies to reduce negative effects of MNCs on operations of local
organisations in China
Research questions
 What are the issues faced by local companies of China?
 How does MNCs put impact on the competition level in market of China?
 What are the strategies to reduce negative effects of MNCs on operations of local
organisations in China?
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Rationale of the study
In today’s era, one of the latest topics of discussion is problems faced by companies in
emerging or developing economies. Among so many emerging markets, China is one in which
local organisations are facing trouble to survive as the major issue being faced by them is
entrance of so many multinational companies which are grabbing their market share as well as
customer base. With globalisation, firms that remain at home and not getting internationalised
are getting failed in terms of their profits and sustainability and even if they try to enter in
foreign markets, they have the risk to lose their home market (Top 10 challenges of doing
business in China, 2016). Thus, purpose behind conducting this study is to analyse the major
issues which local firms of China are facing due to entrance of MNCs and suggesting suitable
strategies to overcome the same.
Significance of the study
The present study will prove to be highly helpful for making the local organisations of
China able to cope up with issues that multinational companies operating there are creating in
their survival. Local companies operating in China will come to know with the ways to reduce
negative impact of MNCs on their business and thus, they can save their profits as well as
customer base. It will also help the firms to stay in market for longer span of time with
sustainability (Wilson and Wilson, 2017). Further, Ph.D. scholars and professors will also get
advantage of using the content of this study in their research and teaching students respectively.
Gantt chart
It is the representation of sequence of activities which study will be conducted to attain
the desired outcomes and meet set objectives. Gantt chart shows duration of each activity in
which it is to be completed and serves as a blueprint which helps in meeting the final deadline of
study.
Activities Week
1
Week
2
Week
3
Week
4
Week
5
Week
6
Week
7
Week
8
Week
9
Week
10
Determining
the aim and
objectives of
study
2

Framing the
research
questions or
hypothesis
Reviewing
the literature
available in
secondary
sources
Gathering
primary data
through
conducting
survey
Analysing
the collected
information
Making
interpretation
and findings
of study
Feedback
and
evaluation
Making
necessary
modifications
Final
submission
3

P2. Appropriate research methods and approaches to primary and secondary research
Research methodology
It can be termed as the set of methods and specific procedures which are used to conduct
study based on nature of topic i.e. whether it is qualitative or quantitative to make evaluation of
its overall validity and reliability (Research Methodology, 2018).
Research design
Research design serves as the framework in which complete study is being carried out
with specific arrangement of conditions. For the present study, descriptive research design will
be used to have an in-depth understanding of topic by observing and describing the behaviour of
subject in detailed manner (Bresler and Stake, 2017).
Research philosophy
It is basically the belief regarding way in which required information based on subject of
study is gathered and used. To identify the problems faced by local organisations with entrance
of MNCs in China, interpretevism research philosophy will be used in which qualitative
investigation will be made on selected small sample in an in-depth way (Daniel, 2018).
Research approach
This can be referred as a plan and procedure based on steps of broad assumptions
regarding collection, analysis and interpretation of data. In the present study, inductive research
approach will be used as topic is qualitative in nature. As per this, new theory will be generated
and information will go from specific to general to position it within the discipline (Research
Methodology, 2018).
Data collection
To identify the problems faced by local organisations with entrance of MNCs in China,
information will be gathered by using both primary and secondary methods. Under primary,
survey method will be used by using tool of questionnaire and in secondary, sources like books,
journals, online and published articles based on topic will be referred (Quinlan and et.al., 2018).
Sampling
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Under probability sampling, simple random technique will be used to select the sample
size of 50 in which everyone from the research population i.e. top authorities of 25 local
companies in China will have equal chance to get selected.
Data analysis
Qualitative method of data analysis will be used in the present study with the help of
thematic analysis tool in which different themes on the basis of responses gained in the
questionnaire will be made and interpretation of same will be given (Alavi and et.al., 2018).
M1. Making justification for the choice of methods
All methods stated above which are going to be used in the present study will prove to be
highly helpful in reaching at the final and accurate conclusion with giving suitable
recommendations for the strategies that local companies in China can adopt to reduce the
negative impacts of MNCs on their operations (Humphries, 2017). All methods selected are
based on qualitative type of research and thus, they will result in bringing fruitful outcomes and
the topic of study is theoretical and requires detailed explanation.
TASK 2
P3. Conducting primary and secondary research using appropriate methods
Questionnaire
Name of company:
Designation:
1. Is your company incurring profits with trading locally in China?
Yes □
No □
2. What are the major issues which your firm is facing being the local operator of China?
Bureaucracy □
Governmental Challenges □
Consumer Preferences □
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Competition □
3. Do you agree that MNCs have a direct impact on the competition level in market of China?
Strongly disagree □
Disagree □
Neutral □
Agree □
Strongly agree □
4. How profitable do you consider your company’s operations being the local operator in
comparison to MNCs?
Highly profitable □
Somewhat profitable □
Not profitable □
5. What is the major internal challenge for your company?
Innovation capability □
Distribution problems □
Finding and retaining talent □
Corporate governance □
6. What is the major external challenge for your company?
Economy slowdown □
Rising labour cost □
Fierce competition from MNCs □
Corruption □
7. According to you, what should be the factors to gain success over MNCs?
6

Price/quality ratio □
Developing a strong brand □
Effective distribution □
Use of promotional techniques □
8. What do you feel about the future perspective of your business in China against competition
given by MNCs?
More optimistic □
Less optimistic □
Uncertain □
No knowledge □
9. How can you improve your profits in China in presence of MNCs?
Providing additional benefits □
High customer satisfaction □
Charging low price □
10. Kindly recommend some strategies to reduce the negative impact of multinational companies
on operations of local firms in
China_________________________________________________
LITERATURE REVIEW
According to Wilson and Wilson, (2017) there are many issues which local organisations
operating in China are facing like that are leading these businesses to either come to an end or
having lots of difficulties to survive and remain in market. However, since few years, some
issues have been resolved but there are still many which are creating trouble for the local firms
like administrative licensing and product approvals, investment restrictions, finding qualified
workers, slow pace governmental policy reforms, etc. Thus, it can be said that there is a big
problem for the firms to have market access in the service industry like in legal, financial or
information sector (Top 10 challenges of doing business in China, 2016). Companies are not
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having the consumer awareness as well due to which they are unable to grab the opportunities
available and so, not earning level of profits that they should.
On the other hand, as per Kolk and Curran, (2017) another major issue which local
companies in China being the emerging market are facing is of competition. Chinese companies
have now started focusing on improving the quality of their products and services which they
have decided to sell in foreign markets which led firms operating there to face high competition.
In the words of Child and Lu, (2018) there is one more issue being faced by local companies of
China that is of governmental challenges as regulatory authorities of this nation are very strict
and all organisations doing business whether local or foreign have to comply with the rules and
regulations imposed by them and perform trade accordingly (China - Market Challenges, 2018).
Non-compliance of same may lead organisations to face severe consequences or actions taken by
government against them.
It can be critically analysed in the words of Walcott, (2017) that MNCs put a huge impact
on increasing the competition level in the market among firms in China. Multinational
corporations lead to bring direct FDI (foreign direct investment) in China which means that the
firms are directly investing in nations in order to increase their business by getting expanded.
Because of this reason, local and national governments have to compete with each other.
Muralidharan, Wei and Liu, (2017) says that MNCs increases the investment in nation and so,
government tries to attract them more so that transfer of resources can be done in the form of
economic injections with the help of foreign sources. It ultimately leads in rise in the competition
level in China where when local organisations compete against MNCs, many get failed.
However, there are always some which achieve success by improving their goods and services in
terms of efficiency and quality to better compete with MNCs (Di Nauta and et.al., 2018).
P4. Analysing the research findings and data
Thematic Analysis
Theme 1: Local companies in China are not incurring profits.
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Yes
No
0 5 10 15 20 25 30 35
No. of respondents
Interpretation
From the above graph, it can be said that according to maximum respondents, due to the
presence of MNCs in China, local companies operating there are unable to incur profit and thus
getting failed as they do not have funds to make any differentiation in their products. They are
not making profits as customers are purchasing the products and services of MNCs over their
which is ultimately generating losses for local companies.
Theme 2: Competition is the major issue which local companies are facing being the local
operator of China.
Bureaucracy
Governmental Challenges
Consumer Preferences
Competition
0 2 4 6 8 10 12 14 16
No. of respondents
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Interpretation
In can be articulated from the above figure that competition is the major issue being
generated due to the entrance of multinational corporations and China as with their direct
investment made in nation, domestic companies are required to compete with them to survive.
Government is continuously taking initiatives to welcome foreign companies as their investment
is generating profits for the economy. However, due to same, domestic organisations are facing
trouble.
Theme 3: MNCs have a direct impact on the competition level in market of China.
Strongly disagree
Disagree
Neutral
Agree
Strongly agree
0 2 4 6 8 10 12 14 16 18
No. of respondents
Interpretation
The above figure shows that MNCs are directly leading to increase competition level as
with selling their products and services in China, customer base and profits of local companies
are getting affected and so, they need to make efforts to protect their position in the market. If
this competition will keep on increasing, chances of local firms to deal with same would become
impossible and they might get failed.
Theme 4: Company’s operations being the local operator are not profitable.
10

Highly profitable
Somewhat profitable
Not profitable
0 5 10 15 20 25 30
No. of respondents
Interpretation
From the above figure, it can be said that maximum respondents believe that after
entrance of MNCs in China, being the local operators over there is not at all profitable as they
are becoming dominant over them and grabbing their profits as well as market share. Thus,
domestic firms need to bring suitable strategies to stay in market with better competing with
foreign companies.
Theme 5: Corporate governance is the major internal challenge.
Innovation capability
Distribution problems
Finding and retaining talent
Corporate governance
0 2 4 6 8 10 12 14 16 18 20
No. of respondents
Interpretation
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It can be articulated from the above figure that major internal challenge which local
corporations in China are facing is of corporate governance as government over there is not
imposing any strict rules and regulations on the entrance of MNCs which is making domestic
organisations to face trouble in surviving.
Theme 6: Fierce competition from MNCs is the major external challenge.
Economy slowdown
Rising labour cost
Fierce competition from MNCs
Corruption
0 2 4 6 8 10 12 14 16 18
No. of respondents
Interpretation
The above figure shows that fierce competition from MNCs is the major external
challenge which local companies are facing in China. Multinational corporations have entered
the market to sell their goods and services which are grabbing the customers of domestic
organisations and snatching their market share as well. Thus, it is the main issue presently which
local firms in China are facing.
Theme 7: Price/quality ratio should be the factor to gain success over MNCs.
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Price/quality ratio
Developing a strong brand
Effective distribution
Use of promotional
techniques
0 2 4 6 8 10 12 14 16 18
No. of respondents
Interpretation
From the above figure, it can be said that if local companies in China want to gain
success over multinational corporations, main factor on which they have to emphasise is to
maintain the price and quality ratio. If they will offer better quality than that of MNCs along with
charging reasonable price for same in comparison to foreign companies, to sustain with
profitability will become easy for them with gaining competitive edge over others.
Theme 8: Future perspective of local businesses in China against competition given by MNCs is
uncertain.
More optimistic
Less optimistic
Uncertain
No knowledge
0 2 4 6 8 10 12 14 16 18 20
No. of respondents
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Interpretation
It can be articulated from the above figure that future of local businesses in China is
highly uncertain as if they will adopt suitable strategies like bringing innovation in their goods
and services and change in price that would be liked by the customers, they may become able to
sustain their positions in market and in case if they would not do the same, they will surely get
failed against MNCs.
Theme 9: By providing high customer satisfaction, profits in local firms in China in presence of
MNCs can be improved.
Providing additional benefits
High customer satisfaction
Charging low price
0 5 10 15 20 25
No. of respondents
Interpretation
The above figure shows that in case if local organisations will provide high customer
satisfaction in comparison to MNCs then their profits and chances of survival can be improved to
a high extent. However, for the same, they need to adopt strategies like improving the quality
with providing additional benefits and selling the same at affordable cost to target customers.
M2. Advantages and limitations of data collection and analysis
Main benefit associated with primary method of data collection is that it is oriented for
specific goals and purpose with proving original research quality. While, it does not ensure that
outcomes gained from the research audience will always be feasible and accurate. Likewise,
secondary method of data collection has main advantage that it includes trustable and ethical
practices which are cost and time effective. But, there is possibility that data may lack important
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details sometimes that are needed for reaching at the goal of study (Fletcher, 2017). Main
advantages of using qualitative method of data analysis is that with same, in-depth and detailed
assessment can be made on the issues being faced by local companies due to entrance of MNCs
in China. Data gathered under this method depends on the human experience and thus, it is more
compelling and powerful. However, on the other hand, quality of study is more dependent on
skills of researcher here. Therefore, there are issues like rigidity and biases that are difficult to
assess as well as maintain (Walliman, 2017).
D1. Critical evaluation of research methodologies and processes to justify selected methods
Methods selected for conducting the present study based on identifying the issues faced
by local organisations due to entrance of multinational companies (MNCs) in emerging markets
like China proved to be highly helpful to reach at the suitable and accurate outcomes as they all
are based on qualitative research which allowed to gather, analyse and interpret information in a
detailed manner and thus, provided reliable and valid results. However, it can be critically
analysed that being qualitative in nature, all methods were time consuming (Alvesson and
Sköldberg, 2017). Also, to gather information from secondary sources, some websites needed
access after making payment for same and so, limitation to cost and information was also there
which resulted in leaving some data which might prove to be important for the study.
TASK 3
Covered in PowerPoint Presentation
TASK 4
P6. Reflection on effectiveness of applied research methods
Research methods like descriptive research design, inductive approach and interpretevism
philosophy proved to be highly effective for reaching at the final conclusion with suggesting
suitable strategies. Gathering data from both primary and secondary sources provided detailed
information which made it easy to understand the major issues prevailing in Chinese market and
on the basis of same, suitable strategies were made. With simple random sampling, relevant and
accurate responses were gained from the higher authorities of local companies of China (Malti
and et.al., 2018). Further, thematic analysis played a vital role in summarizing the important data
under themes and in providing findings of study with detailed interpretation. Therefore, overall,
applied research methods proved to be highly effective for the present study.
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P7. Alternative research methodologies
To identify the problems faced by local organisations with entrance of MNCs in China,
there are some other research methods too that could be used to reach at the final results. For
collecting primary data, instead of survey, interview method could be used to gain more relevant
results but for the same sample size had to be reduced as it is highly time consuming. Also, for
data analysis, rather using qualitative, quantitative method could be used which would have
required tools like SPSS and other mathematical calculations (Bresler and Stake, 2017). Further,
cluster sampling could be used for selecting the sample for study wherein research population
would have been divided into separate groups and then based on same, data analysis had to be
applied. Therefore, to reach at the final outcomes, these methods of research could also be used.
M4. Conclusion and recommendations for improvements and future research considerations
It can be concluded that from the study that there are several negative impacts which
multinational corporations put on local companies of China like colonialism, unmatchable
influence, undermining social and economic rights, environmental effects, etc. In order to reduce
the negative effects of MNCs from the operations of local organisations in China, suitable
policies should be imposed by government to treat them as a helping supplement, rather
considering as an alternative to the investments made by domestic nations. Further, China should
focus internally and make improvements in the basic areas so that domestic companies can be
made able to better compete with MNCs and save themselves to get dominated from them. This
can be done with the help of bringing economies of scale as well as making local firms to operate
on global scale rather doing business within China only as this will increase their scope as well
as profits and lead entire nation to get developed.
D3. Reflection and engagement in the resource process
From this study based on identifying the issues faced by local organisations due to
entrance of multinational companies (MNCs) in emerging markets with respect to China, I have
gained a lot of learning regarding the problems which domestic organisations in this nation and
many other developing and emerging markets like Mexico, Thailand, India, Indonesia, etc. are
facing. Along with that, I came to know about various strategies by which local firms in
emerging markets can survive and sustain their business against multinational corporations. This
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has increased my overall knowledge along with improving the presentation and analytical skills.
Also, I have learnt the way to conduct survey that would help me in my further studies.
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REFERENCES
Books and Journals
Alavi, M. and et.al., 2018. Aligning theory and methodology in mixed methods research: Before
Design Theoretical Placement. International Journal of Social Research Methodology.
pp.1-14.
Alvesson, M. and Sköldberg, K., 2017. Reflexive methodology: New vistas for qualitative
research. Sage.
Bresler, L. and Stake, R.E., 2017. Qualitative research methodology in music education.
In Critical Essays in Music Education (pp. 113-128). Routledge.
Child, J. and Lu, Y., 2018. Management Issues in China: Volume 2: International enterprises.
Routledge.
Daniel, B.K., 2018. Empirical verification of the “TACT” framework for teaching rigour in
qualitative research methodology. Qualitative Research Journal.
Di Nauta, P. and et.al., 2018. Reflections on the role of university to face the challenges of
knowledge society for the local economic development. Journal of the Knowledge
Economy. 9(1). pp.180-198.
Fletcher, A.J., 2017. Applying critical realism in qualitative research: methodology meets
method. International Journal of Social Research Methodology. 20(2). pp.181-194.
Humphries, B., 2017. Re-thinking social research: anti-discriminatory approaches in research
methodology. Routledge.
Jia, F., Gosling, J. and Witzel, M., 2017. Sustainable Champions: How International Companies
are Changing the Face of Business in China. Routledge.
Kolk, A. and Curran, L., 2017. Contesting a place in the sun: on ideologies in foreign markets
and liabilities of origin. Journal of Business Ethics. 142(4). pp.697-717.
Malti, T. and et.al., 2018. Innovation and Integrity in Intervention Research: Conceptual Issues,
Methodology, and Knowledge Translation. Prevention Science. 19(3). pp.271-273.
Muralidharan, E., Wei, W. and Liu, X., 2017. Integration by emerging economy multinationals:
Perspectives from Chinese mergers and acquisitions. Thunderbird International Business
Review. 59(4). pp.503-518.
Quinlan, C. and et.al., 2018. Business research methods. South Western Cengage.
Walcott, S.M., 2017. Chinese science and technology industrial parks. Routledge.
Walliman, N., 2017. Research methods: The basics. Routledge.
Wilson, C. and Wilson, P., 2017. Make poverty business: increase profits and reduce risks by
engaging with the poor. Routledge.
Online
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China - Market Challenges. 2018. [Online]. Available through: <https://www.export.gov/article?
id=China-Market-Challenges>.
Research Methodology. 2018. [Online]. Available through:
<https://research-methodology.net/research-philosophy/>.
Top 10 challenges of doing business in China. 2016. [Online]. Available through:
<https://www.tmf-group.com/en/news-insights/business-culture/top-challenges-china/>.
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