This book is an effort to provide a “primary source”, a guide for Chinese/American cross-cultural negotiations, which has been constructed and amassed by professionals living and working in China. Research included personal interviews, surveys, case studies, face-to-face negotiations, and consulting, melded with a broad body of international business. This book that has two focuses, China market entry and negotiations, Both China and the United States are vast, complex markets, with different histories and cultures. China market entry requires extensive research and understanding, of the inextricably linked elements of (a) how business is managed in China, (b) understanding the China market, and (c) negotiating all elements of your China market entry and ongoing business. To be successful in China, your firm will face these elements in terms of explicable and solvable activities. Research into data, theory, and perceptual cultural differences between your firm and your Chinese counterparts adds magnitude to your China overall business strategy, and mandatory and essential negotiations.
Author(s): Steven J. Clarke
Publisher: Palgrave Macmillan
Year: 2023
Language: English
Pages: 572
City: Singapore
Acknowledgments
Empathy
Contents
Notes on Contributors
List of Figures
List of Tables
Preface
Introduction
References
China Strategic Analysis
1 Critical Research
2 Preparation
3 China Research Analysis Agenda
4 China Macro- and Microenvironment
5 Competitive Strategy for China
6 Competitive Advantage for China
7 Situation Analysis
8 China Market Entry Analytical Tools
8.1 PESTLE
8.2 SWOT
8.3 Value Chain View (VCV)
8.4 Resource-Base View (RBV)
8.5 Porter’s Value Chain Primary and Support Activities for China
8.5.1 Primary Activities
8.5.2 Support Activities
8.5.3 Porter’s Five Forces—China Market
8.5.4 Porter’s 5 Forces Model for China Business Strategy
9 Comparative China and US Economics and Demographics
10 China Conventional Strategic Miscalculations (CCSM)
11 Does the Shoe Fit?
11.1 China Marketing Mix
11.2 China Marketing Mix Strategy
11.3 China Market Segmentation
11.4 Standardization versus Customization (SvC)
11.5 China Brand Standardization
11.6 China Brand Customization/Adaptation
11.7 Research Support
References
China and Negotiation
1 Why Study Negotiations?
2 Negotiators Theory
3 The Negotiations Approach
4 Norms—Attitude and Behavior
5 Adverse and Favorable Practical Behavior
5.1 Ethnocentrism
5.2 China Foundations for Ethnocentrism
5.3 United States Foundations for Ethnocentrism
5.4 National Feelings
5.5 Xenophobia & Xenophilia
5.6 Power and Authority
5.7 Power
5.8 Authority
5.9 Trust
5.10 Assumptions
5.11 Why Do We Need to Manage Assumptions During Cross-Cultural Negotiations?
5.12 Values
5.13 Chinese Misconceptions and Values of Americans
5.14 Misconceptions
5.15 American Traditional Values
5.16 Avoid Cross-Cultural Fallacies
5.17 American’s Misconceptions and Values of Chinese Misconceptions
5.18 How to Debunk Misconceptions
5.19 Contemporary Chinese Trends in Values
6 Process & Stages of Chinese Negotiations
6.1 Process
6.2 Stages
6.2.1 Pre-negotiation/Preparation
6.3 Research the Negotiator
7 Characteristics of Behavior and Style in Negotiations
7.1 Chinese and American Comparative Behavior, Styles, and Perceptions
7.2 Six Dimensions of Chinese Business Negotiation Style
7.3 Chinese/American Descriptive Devices
7.4 Conflict Resolution
8 China Negotiations and Market Entry
8.1 Phases in International Strategy Formulation
8.2 Ping-Pong Model
8.3 Adverse Practical Boundaries
8.4 Favorable Practical Boundaries
9 Sun Tzu
9.1 Sun Tzu Military Strategy Applied to Business Strategies
9.2 Thirty-Six Chinese Stratagems
9.3 Tai Chi Negotiations Stratagems
References
China Market Environment
1 China and Globalization
1.1 Waves of Globalization
1.1.1 First Wave of Globalization: 1860–1914
1.1.2 Second Wave of Globalization: 1945–1980
1.1.3 Latest Wave of Globalization
1.1.4 China’s Standing in Globalization
2 China and Capitalism
3 China Market Structural Distinctiveness
3.1 How Will Your Firm Compete in China?
3.2 China Competitive Advantage
3.3 Typical Steps in Industry Analysis
3.4 The China Market Value Chain—China Value Created and Captured—Cost of Creating Value = Margin
3.5 Competitive China Strategy
3.6 Contemporary China Competitive Strategy and social media
3.7 Porter’s Diamond of China National Advantage
3.8 Socio-Cultural Influences
3.9 Institutional Mapping
3.10 Risks
4 China Markets
4.1 Market Potential
4.2 Bottom of the Pyramid (BOP)
4.3 Scope of Your China Company
References
China Market Entry
1 Approach to China Market Entry Strategy.
2 China Mode of Entry Options
2.1 China Mode of Entry
3 Ownership
4 Location Advantages
5 Internalization Advantages
6 Direct Exports to China
7 Indirect Exports
7.1 Intercorporate Transfers
7.1.1 Intermediaries
8 Additional Considerations
9 Government Regulations and Policies Considerations
10 China Party Role
11 Marketing Considerations
12 Top Marketing Strategies for China (2021)
13 Logistical Considerations
14 Distribution Considerations
15 Ease of Doing Business in China
16 China Licensing
17 China Franchising
18 China Foreign Direct Investment
18.1 China Greenfield Investment Strategy
18.2 China Brownfield Investment Strategy
19 Strategic Alliances
19.1 Trading Alliance
19.2 Comprehensive Alliances
19.3 Functional Alliances
19.4 Strategic Alliances and Joint Ventures
19.5 Strategic Alliance Management
References
China Cultural Environment
1 Chinese National Culture
2 Cultures and Negotiations
3 Cultural Dimensions
3.1 Power Distance
3.1.1 China
3.1.2 United States
3.2 Individualism
3.2.1 China
3.2.2 United States
3.3 Masculinity
3.3.1 China
3.3.2 United States
3.4 Uncertainty Avoidance
3.4.1 China
3.4.2 United States
3.5 Long Term Orientation
3.5.1 China
3.5.2 United States
3.6 Indulgence
3.6.1 China
3.6.2 United States
4 Yin Yang
5 Time
References
China and Guanxi
1 What Is Guanxi? Guanxi Defined
2 Understanding Guanxi
3 Chinese Terms and Definitions
References
American and Chinese Ethics and Their Influence on Multinational Business
1 American Ethics
2 Chinese Ethics
3 Chinese Ethics Applied to Business
4 Mendacity
5 Corporate Social Responsibility
6 Ethical Issues of Multinational Corporations
6.1 Introduction
6.2 Respect as the Premise for Resolving Ethical Conflicts
6.3 Communication to Resolve Ethical Conflicts
7 Corruption
8 Conclusion
Resolving Commercial Dispute in China: The Legal system, The Law, and The Dispute Resolution Methods
1 The Chinese Legal System as a General Background
2 Choice of Law
3 Contract Law in Relation to the Commercial Dealings in China
3.1 Chinese Contract Law
3.1.1 The General Principle of Good Faith
3.1.2 Formation of Contract Under the Chinese Law
3.1.3 Specific Rules on Electronic Commerce
3.1.4 Validity/Vitiating Factors of Contracts
3.1.5 Pre-contractual Liability
3.1.6 Specific Performance
3.1.7 Force Majeure and the Doctrine of Change of Circumstances
3.2 The CISG
4 Commercial Dispute Resolution in China
4.1 The Chinese Judicial System and Civil and Commercial Litigation
4.2 Commercial Arbitration in China
4.3 Mediation
5 Concluding Remarks
References
China’s Circular Economy Toward Environmental, Social, and Governance
1 Introduction
2 China Circular Economy and Net-Zero Directives: Implications on a company's ESG
3 Investment in Circular Economy and SI Activities
3.1 Designing-Out Wastes
3.2 Keeping Material in Use
3.3 Adopting Restorative/Regenerative Processes
3.4 Circular Economy Toward Regenerative Agriculture
4 Opportunities Where Being Circular in Constructs Pays
4.1 Regenerative Agriculture
4.2 e-Mobility Related Business
4.3 Electronic or Information and Communications Technology (ICT) Product-as-a-Service
4.4 Data Provenance, ESG Monitoring, and Carbon-Emission-Footprint Management Services
4.5 Reverse Logistics
4.6 Circular Economy in Textile and Fashion
4.7 Circularity in Habitat and Lifestyle Consumption Patterns
5 Moving Forward
References
China Ecommerce and Marketing
1 Introduction
2 Using Online Channels to Open the Market
3 An Overview of the Ecommerce Platforms
4 Choosing the Right Ecommerce Platform
5 The Golden Triangle of Chinese Ecommerce
6 Consumer Market—The Eight Consumer Profiles in China Ecommerce
7 Merchandising
8 Marketing—In vs Out of App
9 In App Marketing
10 The First Double 11
11 Campaigns
12 Important Festivals to Breakdown
13 Marketing IP’s
14 Out of App Marketing
15 KOLs and Affiliate Marketing
16 Seeding and Harvest
17 Co-marketing with the Platform
18 Breakdown of the Ecommerce Equation
19 Data Analysis
20 Data Bank
21 Uni ID
22 Emerging Trends
22.1 Livestreaming
22.2 What Is Livestreaming?
22.3 What Does a Livestream Room Look Like?
22.4 Evolution of Livestreaming
22.5 Shopping and the Metaverse
22.6 New Retail
22.7 Hema: The Ultimate Supermarket
23 Formulating an Ecommerce Strategy in China
References
Innovation and Technology in China
1 China's Historical Orientation Toward Technology
2 Assessment and Timeline of the Antecedent Conditions Leading to China’s Maturity in Technology Innovation
3 R&D Policy
4 Innovation in Manufacturing
5 Artificial Intelligence
6 Electric Vehicles
7 Payments Technologies
8 Practical Implications for Action in Engagement with China Through R&D
8.1 Commercial Sector
8.2 Government Sector
9 The Role of Higher Education in Enabling the Fulfillment of China’s Ambition
References
Challenge of Identifying and Negotiating with Chinese Factories
1 Three-Circle Control Framework
2 Making the Most of a Trade Show Visit
2.1 Red Flags: Wide Product Range
2.1.1 Poor Communication
2.2 Mistakes
2.2.1 “Can You Make This?”
2.3 Tips
2.3.1 Ask the Same Question Multiple Ways
2.3.2 Be an Exciting (but Honest) Potential Customer
2.3.3 Think Like a Manufacturer When Talking MOQ
2.3.4 Be Respectful with Sampling
3 The Factory Visit—Secret Ways to Get to the Truth About… Quality/Ownership/Reputation and Financial Stability/Customer Base
3.1 Quality (Do They Can Make the Product I Am Looking for?)
3.1.1 Engage a Professional for the Factory Audit and Tag Along
3.1.2 Do They Have a Quality Manual?
3.1.3 Look for Well-Documented Flow of Materials and Process
3.2 Ownership (Who Really Owns the Factory?)
3.2.1 Diplomatically Get Your Hands on the Business License
3.3 Reputation and Financial Stability
3.3.1 Due Diligence
3.3.2 Investigation
3.4 Customer Base
3.4.1 Ask for a Reference
3.4.2 Ask a Salesperson Away from the Group
3.4.3 Review the Website and Brochure (Especially Chinese Language)
3.4.4 Sample Room
3.4.5 Review the Tool Room
3.4.6 Special Attention to the Warehouse
3.4.7 Taobao the Seller in Chinese
4 Summary
References
Fintech Market Development in China
1 Fintech in Chinese Financial Markets
2 Fintech Industry Regulation in China
3 Comparative Advantages of the Chinese Fintech Companies
4 Accountability and Market Risk in the Chinese Fintech Industry
5 Challenges and Risks in the Chinese Fintech Industry
5.1 Operational Risk
5.2 Financial Risk
5.3 Business Risk
5.4 Cybersecurity and Data Privacy Risks
5.5 Regulatory Change Risk
5.6 Fintech Business Models in China
6 A Case Study of Chinese Fintech Company
6.1 The Ant Financial Services Group
6.1.1 Background
6.1.2 Business Model
6.1.3 Business Competency
6.1.4 Risk Management Strategy
7 Role of Fintech in the Inclusive Finance
8 Conclusion
References
China Belt and Road Initiative
1 Introduction
2 By Land and by Sea
3 The Silk Road Economic Belt
4 The Risks and Rewards
5 The Risks
6 The Rewards
7 Risks vs Rewards Viability Analysis Based on Each Economic Corridor
7.1 Opportunities for Business and Investments
8 Foreign Companies Find Their Foot-in-the-Door
9 Considerations and Implications
10 The Current State of the Belt and Road Initiative—2021
11 Conclusion
References
Case Studies
1 China Silk Inc.
1.1 Introduction
1.2 The Impact of Globalization
1.3 Supply Chain and Distribution Strategies
1.4 Ethics
1.5 Prospect
2 Evaluation of Apple’s International Strategy
2.1 Introduction of Apple’s International Strategy
2.2 Pricing Strategy
2.3 Apple’s Centralized Structure
3 IKEA in China (a Study of the Yin Yang Approach)
3.1 Background
3.2 Expansion Process
3.3 IKEA’s Marketing Strategy in China
3.3.1 Complete Supply Chain Management System
3.3.2 Precise Target Consumers
3.3.3 Unique Sales Techniques
3.3.4 Timely Adjustment of Strategies
3.3.5 Excellent Corporate Culture
3.3.6 Application of Yin Yang Method
4 Google
4.1 The Establishment of Google China
4.2 Growth
4.3 Exiting the Chinese Market
4.4 Reflection
5 Conclusion
References
General Glossary, Terms, and Definitions
Index
