In: Economics
According the the Article:
Not all international expansion strategies are a resounding success, however. Research an article or video that discusses an instance in which an American company’s expansion efforts in another country failed. According to the article/video you selected, what were the main reasons for this failure? Do you agree with this assessment?
Here we are taking the example of Uber, a California base cab agency. it was highly successful in its operation in their own country. But when they try to expand their business in other countries for example in China, it faces more difficulties.
The reasons why the Uber could not sustain in the Chinese market:
1. China as the fastest-growing market its population is and no. of vehicles are less so it was a potential market. but heavy competition with domestic competitors uber could not deal with the pressure.
2. The conservative culture of the netizen is another problem for Uber.
3. App-based service could not compete with the local app and their set up and chain activity throughout the country. where uber was dependent on the service providers.
4. market monopoly of the domestic service provider. so as an outsider it could not match the price and accuracy of the market demand.
5. Another major reason is the card detail of the User is a drawback as the customer doesn't want to reveal their financial details.
6. Despite the connection with Baidu, one of the most powerful and politically connected company and heavy discount it could not control the fraud.
7. In china different states is having different regulations so one can take benefit of that but in this game, the local player grabbed the opportunities.
8. finally the most important set back was the new government regulation which almost blocks all the opportunities for all the foreign business partners.
So in the overall analysis, we can find that all the time company's policy and strategy were not the reseason for failure it is mostly the business environment and the country's business policy which creates a failure scenario. this was taken from HBR.