International Business Strategy: China and Myanmar Case Studies Report

This assignment is a case study analysis of two international business scenarios: China's economic growth and Myanmar's political and economic reforms. The first case examines China's market, highlighting its growth potential driven by rising consumer purchasing power and the increasing influence of online shopping. It explores challenges such as privacy concerns and cultural differences, while also applying relevant international business theories like Hofstede's cultural dimensions and Porter's National Competitive Advantage. The second case analyzes Myanmar's economic stagnation due to factors like underdeveloped markets and economic sanctions. It details the government's motivations for political and economic reforms, including transitioning to a market economy, privatizing state-owned firms, and attracting foreign investment. The analysis considers potential impediments to reform, the impact of democratic changes, and applies theories like the Heckscher-Ohlin theory. Both case studies provide a comprehensive overview of international business strategies, market dynamics, and the challenges faced by businesses in different global contexts.

INTERNATIONAL
BUSINESS STRATEGY

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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.

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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

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democracy. With democratic opposition taking over the country’s control, the actions to
transform the market economy will be reinforced and economic growth will positively
enhance.
Case Questions
Reason for economic stagnation
They face economic stagnation because of their undifferentiated rural market, economic
restrictions by other nations, underdeveloped transportation market. The oil and gas resources
were abundant in Myanmar but since government privatised the energy firms to the military
generals hence country came to stagnation. Due to their corrupt government and inhuman
activities, many countries placed trade sanctions on Myanmar (Jones, 2014). Along with this
lack of uniform mass transportation throughout the nation hurts their economy as it restricts
market from interacting with one another.
Things that motivated the government of Myanmar
External pressure from the western governments as the economy has come to a halt has
pushed them to do reforms. Governments also did not want that their dependence on China
increases. Myanmar government felt removing the restrictions on the press and releasing
political prisoners will improve their image at the global levels and might remove trade
sanctions from them and would also promote less corrupt government (Huang, 2013).
The nature of the economic reform
The government of Myanmar is trying to transform themselves from command economy to
market economy. These reforms were done under several categories. First military had started
to begun to privatize state-owned firms was previously under the control of government
officials. Second the government would take on deregulations towards the sectors like
healthcare, finances and energy. Third the government also abandoned the official fixed
exchange rates for the currency of Myanmar and replaced it with a managed float (Hlaing,
2012). To further improve the growth of the economy, government supported and opened
outs for foreign direct investments and encouraged the foreign firms to enter into the
partnerships with the firms that are domestic in telecommunication sector that is
underdeveloped. Most of the economic reforms had been done for attracting the world
government so that they remove the sanctions on Myanmar and hence this nation could
survive as independent nation and this resulted in the form of United States, Japan removing
sanctions on this country.

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Potential impediments
The biggest issues that every nation had to face are that it is having totalitarian government
that would enhance corruption. However Myanmar has implemented the democracy as an
idea and is making efforts to engage more in international trades that could boost their
economy and the bureaucratic culture will tend the corruption to remain in the country as the
control and powers remains in the hands of military generals. International firms are are
looking towards Aung San Suu Kyi for reducing the corruption issue in the nation and the
international firms would be more likely to invest in Myanmar (Turnell, 2011). However with
the army generals in power having higher amount of money, it would not be easier for Aung
to battle these people and bring fast economic reforms. It is also the fact that most of the
improvements are done at microeconomic levels.
New government impact upon Myanmar’s growth
The democratic opposition took the government within the nation and this will help in taking
the growth trajectory forward as the elections showed that Myanmar will move on the path of
democracy. Such election also helped Myanmar in improving its image in front of the world
which helped them in receiving subsidization from the West. However, high trajectory cannot
be gained by Myanmar because larger power remains in the hands of Military generals
(Taylor, 2012).
Theories and issues of international business
The theories of international business that can be applied is that some country are Heckscher-
Ohin Theory which explained that free and open market would lead nation and producers to
find out which items they could produce more efficiently. This theory is based on nation’s
production factors like labour, capital, land which gives funds for investments in equipment
and plants. The case also shows the issues related to government structure have an impact on
the business in the country. This can be understood in terms of the fact that lesser amount of
corruption allows companies to do better business (Turnell, 2012).

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References
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Fenby, J. (2017). Will China dominate the 21st century?. John Wiley & Sons.
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