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Market Entry Services

Entry Strategy

With the continuous change of the business environment, companies cannot afford to ignore international markets.  The dependency of nations around the world on each others products and services has raised awareness among companies of the need for a more global outlook in their approach to business. Since most companies are geared towards growth, the new opportunity today for companies who are in the Telecommunication and Information Technology (IT) market is to look to China. China today is the fastest developing economy in the world and the only market that continues to grow. And with its recent accession into the World Trade Organization (WTO) China opened its market to the outside world as part of its open door policy to move towards a market-based economy.

As regulatory policies in international trade with China are rapidly changing and becoming more flexible, companies are exploiting business opportunities in China. The demand for Telecommunication and IT products and services continues to sore unlike in any other market around the world where the industry has taken a downturn. The opportunities in China are changing as well, but the changes are associated with a rapid growth and in an environment that is in the process of making changes.  Some of the changes include industry restructuring to meet the demand and a delay in issuance of licenses until order is established.

The opportunities are abundant in targeting the Chinese Telecommunication and IT markets.  Companies however, must take a long term prospective on the Chinese market potential and relentlessly adopt a market-led approach to identify, anticipate, and satisfy the needs of their customers.  For example an approach by means of chance orders (i.e., purchase orders at an exhibition) are not conducive to the central principal of creating customer value and market targeting.  There is therefore little chance for competitive success and an unlikely long-term market position.

Exploiting market opportunities in China is about making the right decisions based on a sound environment and market analysis. Market entry methodology than can be easily achieved.  To enter the Chinese market a company has several options, some have regulatory implication but offer sound investments while others provide quick entrance to establish relationships and build a competitive position. Prior to China's accession into the WTO, companies traditionally selected the local distributor route and exported. Today many choose to establish a branch office /sales office or partner as part of a joint venture to have the local presence and local customer contact. In the past such entry methods were difficult, but now due to the open market economy policies are flexible and restrictions have been lifted. Another entry mode for companies to consider is the Direct Investment option.  This allows companies to develop a foreign-based entity with benefits such as full control over the investment, lower labor cost, easier local adoptability capabilities, and branding opportunities.

Understanding the market entry methodology is an important factor in a companys market entry strategy particularly when selecting market entry opportunities into China.  Such analysis allows companies to select the most cost effective path to ensure a long-term competitive position in the targeted market.


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