Introduction
China is a third world country whose market is growing at a very high rate. China has the fastest growing economy among the third world countries. It has a large population that favors the market growth. Small firms in the United States of America market most of their products in China. China has a culture that is different from that of western countries, thus their way of doing business is also different (Shen, 2004).
This article will discuss the ways of doing business in China and how culture affects the same. It will also discuss the businesses that are likely to be viable in China, the risks and challenges involved, as well as the methods that can be used to address these problems.
How people do business in China
It is important to first understand the way people in a given business location do business for any business organization to succeed. In China, business persons are known to rely a lot on subjective feelings. They also rely on personal experiences to understand customer needs and level of satisfaction.
On the other hand, people in China are known to love colors. In addition, they like figures and numbers that are impressive. Another thing that is important to note about Chinese business is that meetings can be arranged in a short notice and cancelled fast as well (Chee, West & Palgrave Connect, 2007).
How the Chinese culture can affect my traditional business thinking
Chinese culture is different from that of the United States. The culture can, therefore, affect the traditional business way of thinking of an American businessman. For instance, one has to understand that meetings can be called at a short notice. In China, a business person is not expected to give customers a lose face since this might indicate disrespect. These are some of the ways in which one’s way of thinking can be changed while doing business in China.
Types of businesses that would prosper in China
Technology is growing at a high rate in China; therefore, any business that deals in technological products and services is likely to prosper. Sale of software can be highly prosperous since many people have personal computers that they may need to install software. Companies also need various applications to improve their service delivery. Sale of CDs can also prosper since they are also part of technology.
Challenges and risks associated with doing business in China
China has many opportunities, but there are some challenges that are associated with doing business in the country. For instance, government and other organs in the business sector are said to be highly corrupt. This is a factor that can negatively affect business. Another risk factor is that most companies and business organizations are taking their operations to China, thereby increasing the level competition.
Overcoming the competition, especially for a new venture, is likely to be a great challenge. High competition might lead to failure of a business due to low profitability. It is, therefore, important to establish a good business strategy (Gassmann, Beckenbauer & Friesike, 2013).
Steps that Baxter should take to address these challenges and risks to increase chances of success
Baxter should come up with a way of coping with the high level of competition to increase chances of success in China. This can be done by forming joint ventures with already established businesses in China. This will enable the business win customers faster and easier. Baxter can also develop an innovative strategy that will help it overcome the competition.
References
Chee, H., West, C., & Palgrave Connect. (2007). Myths about doing business in China. Hampshire: Palgrave Macmillan.
Gassmann, O., Beckenbauer, A., & Friesike, S. (2013). Profiting from innovation in China. Berlin: Springer.
Shen, M. Y. (2004). How to do business in China. Pittsburgh: Dorrance Publishers