The historical connection between Canada and China dates back to colonialism periods, and the influence of Chinese restaurants in Canada is equally notable. Fleetwood Furniture, a contract manufacturer and distributor of high quality hotel room furniture to customers all over the world, will find it economically viable to relocate to China to enable it compete globally and cut costs of production. The company will sell to China’s vast domestic market, export globally and use China’s low-cost labor in supply chain.
Elements of national business environment
China labor market has experienced transformation since the periods of reforms in the year 1970s. Fleetwood Furniture will exploit the global sourcing advantages in China. The company will save cost through the supply chain i.e. a low-wage country, improved logistics and distribution, developed and inexpensive telecommunications (Nagy and Peter 89).
The company produces high quality products with costs relative to the size of the national market and fast-developing technology to reinforce globalization strategies to help recoup investments. The approach to save cost will put the company in a globally competitive position with both domestic and international furniture firms.
China has advanced it corporate governance. The company will benefit from linear relations with its stakeholders. This is because the Chinese model borrows heavily from the Anglo-American, which requires the existence of some institutional conditions to protect investors and investments (Russell, et al. 2).
Trade and investment flows from Canada will bring benefits to Chinese furniture industry. At the same time, Fleetwood Furniture will have advantages of global customers enabled by China’s distribution and logistics firms. Transferable marketing skills such as same packaging, advertising, brand names, and other elements of the marketing mix will enable the company to leverage on their advantages.
Changes in management
Management in globalised economy from the marketing point of view involves issues of global segmentation and positioning, standardization of products and services, pricing, advertising with similar themes across various countries, developing global brand name, and international logistics. At the same time, the company will also pay attention to human resources issues due to varied cultural orientations, labor requirements, corporate governance, potential risk management, and financial control systems.
Challenges
Political changes in China have created an enabling environment for foreign investors. Government globalization drivers create enabling trade policies, assimilation of foreign investments and the common marketing regulations. However, in the past, Chinese acceptance of corporate from the West met significance level of resistance. Therefore, it is necessary for Fleetwood Furniture to keep in mind that, despite the progress towards globalization, open markets and free trade such barriers to foreign companies can be re-introduced and political complications can ruin its plans (Johansson 20).
The company has to learn the intricacies of doing business overseas. It must find the right workers for its operations, evaluate foreign markets and customers. The company might experience logistics and set up challenges.
Fleetwood Furniture cannot avoid different cultural orientation of Canadians and Chinese, though there are elements of Chinese culture in Canada. Culture will influence the company in two ways. First, Chinese culture will make it difficult for the company to predict demands, consumer reactions, and understand consumer behavior. Customers have different economic constraints, choice criteria and social norms. Culture will also affect advertisement campaigns of the company.
Secondly, cultural effects on labor and skills management vary from culture to culture. Chinese national culture will affect the company culture, how managers deal with the employees, negotiation of contracts, control of middlemen, relationships with businesses partners, among others. In short, culture has varied influence on what skills Fleetwood Furniture will need to succeed in the vast Chinese market.
Works Cited
Johansson, Johny K. Global Marketing: Foreign Entry, Local Marketing, & Global Management, 5th Edition. New York: McGraw-Hill/Irwin, 2009. Print.
Nagy, Hanna and Peter, Knight. Seeking Transformation Through Information Technology: Strategies for Brazil, China, Canada and Sri Lanka. New York: Springer, 2011. Print.
Russell, Tam, Malcolm and Cherrie Jiuhua. China’s Business Reforms: Institutional challenges in a globalized economy. London: Routledge/Curzon, 2005. Print.