China has in the last few decades increased its importance in the global trade. The country has in a short period developed into an important consumer market due to its rapidly growing middle class, and that is why companies consider China to be such an important market, even small and medium-sized companies. Danish organic food companies have also acknowledged the huge growth potential as the country offers. However, as this is a rather new tendency for Danish organic food companies, the aim of the thesis is to contribute to the knowledge about how the potential for internationalization to China is discovered, and what actions there are subsequently taken during the initial phase of planning and preparation. This will be done through a two-case case study of Thise Mejeri and Lovemade. A framework was developed based on relevant literature to guide the research. The focus of the analysis has been on the firm typology, based on the firms’ history, resources, and age, because the typology will impact the firms’ motivations and aspirations for internationalization. The analysis has further addressed how the companies use their internal capabilities (use of entrepreneurship, knowledge and learning, and networks) in the initial phases of the internationalization to China. Having analyzed the two cases companies on the basis of the framework, the thesis concludes that newly established firms, in the case of Lovemade, need to internationalize early to survive. Older more mature companies, in the case of Thise, have been forces to expand export to distant markets, because of a downturn in the Danish and neighboring export markets. Due to Thise’s incremental and geographically close internationalization, Thise has been forced to break old habits of doing business when faced with a different institutional environment. Due to Lovemade’s lack of experience with the food sector and export, the company has been forced to learn while doing. However, because Lovemade is a small new firm with no previous experience, it does not need to unlearn embedded routines, thus benefiting from learning advantages of newness. Both companies have used their networks to other companies in the discovery of the business opportunity and in acquiring specific knowledge about the Chinese market. The use of external collaboration partners (export agents) have especially been important for both firms, to overcome the institutional differences that are connected with doing business in China.
|Educations||MSc in Business, Language and Culture, (Graduate Programme) Final Thesis|
|Number of pages||105|