Companies are looking to gain and sustain a competitive position, profitable growth and an increase in shareholder value with the least amount of risk. Todays business environment is ever changing particularly in the era of globalization.  The way businesses operate has been influenced by the trends of thinking globally and acting locally.  The Chinese market is a prime example of an era of business opportunity that is changing rapidly as it moves towards a market economy inline with global market trends.  Companies entering the Chinese market are strategically positioning themselves for the long-term competitive advantage in a global market rather then a domestic market.  The trends of globalization, however, bring challenges to companies of all sizes.

A company needs a strategy to meet its objectives of growth and more importantly profitability.  This can be done either through a formal or an informal plan that best suites the companys situation.  Many companies would like to avoid this step thinking there is little value particularly in a rapidly changing environment.  But that effort, which is minimal in comparison to the cost of not planning ahead can help companies anticipate and respond quickly to industry changes.  How do you go about making that plan?  Companies then evaluate their environment through market research, analyze their competitors, devise a marketing plan, differentiate through a cost strategy and evaluate the risks.

Market Research

Companies must be informed and understand their global positioning in the industry to meet their objective/(s).  It is therefore vital that information is gathered about the trends, customers, competitors, and all other forces that play a role in the industry to be able to make sound decisions and gain a competitive advantage for strategic positioning.  Market research is a process that helps identify and define market opportunities and complexities through the gathering of information. It is always thought that market research is a lengthy and formal process, it can be.  However, the pace and movement of technology, reforms and policy changes particularly in China is rapid and continuously changing, gathering of information and market intelligence must be focused on a specific target.  Companies can then quickly evaluate the opportunities and position themselves strategically, rather then later discover that they missed the opportunities and made mistakes.

Competitive Analysis

To strategically align a company's positioning tactics, companies should identify key competitors, their strategies, weakness and strengths through a competitive analysis.  What is critical here is to draw attention to the opportunities and the threats to the company.  An analysis can than be drawn to evaluate the company's current industry positioning relevant to its competitors, and allows a company to develop a growth strategy.  Entering the Chinese market brings a few additional variables into the competitive analysis process that is important to mention as part of the move towards globalization.  China is still to some extent a state-owned enterprise and slowly through reform is moving towards privatization, brings a twist to the competitive analysis plan.  Companies are now evaluating competitors that are foreign (i.e. already in China from other countries), newly privatized companies, and state-owned enterprises.  It is vital to evaluate all fronts because some of the competitors are a domestic competitor that are gaining a market share in another front through globalization, and the new entrants competitors through privatization movement in China.

Risk Analysis

Any strategic decisions come with some risk.  Companies thus naturally make decisions that bear the least amount of risk. There are several important considerations to take when analyzing risk.  The most significant include determining what type of risk/(s), where is the risk coming from, and how significant is the risk?   This evaluation plays an important role when deciding to globalize since there are additional factors normally not associated when expanding in a domestic market.  China is an emerging market, with unforeseen changes.  The reality is that there are risks, however, with a well-developed strategic positioning plan these risks may not be any different than doing business in a domestic environment.  There is undoubtly a benefit in conducting a risk analysis in order to minimize costly decisions, and gain a competitive advantage.

Globalization is the current trend and the trend of the future. Through globalization companies are able to grow and become profitable.  A well thought out strategic plan can bring the benefits that meet the objectives of every company who is seeking to expand into China and profit in the Chinese market.