Yesterday's lecture on the service industry in China was one of my favorite topics that we've discussed thus far. Throughout the class, we had the chance to look at many different companies that have entered the Chinese market and analyzed the reasons for their success or failure. As we examined these cases, I was shocked to see the amount of failed business attempts by American companies. We learned that big names like BestBuy, Barbie, and Home Depot all had to withdraw from the Chinese market due to unsatisfactory sales. These companies are so popular back in the United States so it was interesting to learn why they weren't equally as successful in China.
Our instructor informed us that there are actually many different reasons for these failed business ventures. The main reason he cited for unsuccessful outcomes in China is failure to adapt to differences in consumer's tastes and preferences. We learned that many companies attempting to enter the Chinese market do not conduct a sufficient amount of market research. Also, they use standardized business models instead of localization. I think that by using these types of methods, companies are creating a gap between the products and services that they offer and what consumers actually want. With this being said, it's no wonder why these companies fail!
I think that in order to excel in China, companies must realize that success in one country does not necessarily mean success in another. Also, they must understand that cultural differences should be carefully considered when making business decisions.