Strategy Creation in China: A Best Approach to Strategy Creation for Small Western Companies when Expanding to China

Emil Faris Christensen & Frederik Overskov Krebs

Student thesis: Master thesis

Abstract

Expanding to China can seem appealing for Western companies, however, differences between China and the West can make this appear overwhelming and unmanageable, especially for small companies with limited resources. This thesis strives to serve as a tool to make strategy creation manageable for small Western companies when expanding to China. Therefore, the following research question has been applied:
What is the best approach to strategy creation, for small Western companies when expanding to China?
This thesis has deducted the best approach to strategy creation in three steps. First, an analysis of what characterizes the Chinese market is conducted. Based on this, a literature review outlines the relevant research regarding the subject and finally, a discussion based on the analysis and literature review is carried out.
This research has found that the Chinese market differs due to high levels of uncertainty. Moreover, a review of the literature suggests a gap in the research field regarding this specific topic. Based on a discussion regarding the literature, it is found to be necessary to address the research question in two stages; pre- and post-entry on the market. Pre-entry it is found that a best approach strategy creation would be to apply a combined-model, with elements from Porter’s Five Forces and Resource-Based View. Finally, in the post-entry stage, a heuristic approach to strategy creation is found to be the best approach.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages115