Question

In: Operations Management

Why did China’s domestic brands have such difficulty competing effectively in global markets?

Why did China’s domestic brands have such difficulty competing effectively in global markets?

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Expert Solution

Why did China’s domestic brands have such difficulty competing effectively in global markets

China is the world’s second-largest market. Their products are utilized by consumers in a lot of different countries. It is a global market but when China decided to introduce their domestic products in the global market, there were a lot of factors at play which needed to be addressed. For the first reason, the change in laws, policies, culture of the other nations provided a challenge to the Chinese philosophy. Secondly, their products, while cheap, failed to provide any other value to the customers other than that. Walmart sells cheap products, yet, it is the value it provides to its consumers, the services and the benefits that they get that make Walmart a success. Therefore, Chinese product failed to generate much value due to the fact they were based on a cheaper market and people just needed more than a price difference. Thirdly, the products that were competing in the global market were not being placed in the right market that could essentially provide an excellent value to the customers, while essentially allowing China to place their product in such a way that customers create a need for the product by themselves.

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