Read the following article, then write in your own words a comprehensive review of the article. Start your paper first with a summary of the entire article, then write your analysis and opinion as apply. Don’t use quotations, use your own writing.
A question of trust; American tech companies in China. The Economist:
https://www.economist.com/business/2013/11/30/a-question-of-trust
Summary
This article is triggered by international business. There are many companies in the United States of America, which are operating in China. China is a potential market for all technology companies. However, recently, there are some difficulties for these firms due to their missteps. Technology companies such as Cisco, Dell, IBM, and HP are facing intense competition in China. Overcharging and contradiction with the Chinese business regulations have kept these firms backward in this modern business era. Chinese technology companies such as Huawei and many others have become major competitors of the Americana technology companies. China is supporting local suppliers to support the local business in the technology market. American firms have been scrutinized, which has impaired the business sustainability as well. For Instance, revenue of Cisco is 18% lower than previous years, and it seems the indication of the struggle of the American technology companies. Now, as far as operations of different US technology firms, it is necessary to contain some strategic considerations and sustain the business for a long run despite having some prominent business barriers (The Economist, 2013).
Analysis
This article illustrates the performance of different US technology companies. This article tells that doing business in China is difficult for these companies. Customers have been converted by the local technology giants, and the consistent scrutiny of these firms has sidelined operations. Revelation of Edward Snowden is in the limelight, and in the strategic decision-making process, these can be considered. It has been revealed that competition is not only the issue for these companies. Strict business regulations and contradiction with China’s anti-monopoly law is also two major problems. Also, despite having the low labor cost in this country, the article demonstrates the intentions of companies regarding profitability and pricing High prices of different technology products as compared to Chinese products are a big factor. It has also created the fear of backlash (Vena, 2018).
The article elaborates some business insights in term of the form performance, competition, and the Chinese business regulations. However, this article does not depict different business or corporate strategies to tackle these issues. Despite having a reputation in the international technology market, the struggle of these firms in China seems disturbing. The author of this article intends to streamline the pressure on the US technology companies, which has a direct impact on the performance, revenue streams, and profitability (Pandaily, 2018).
Opinion
As mentioned, to get rid of the different problems, the management of these companies has to contain some strategic considerations to sustain the business in this competitive market. For Instance, instead of focusing on the skimming pricing strategy, there is a need to come up with the penetration pricing strategy. Low-cost technology products for people can help to grab the immense range of customers. On the other hand, these firms have to stop the product imitation, as many Chinese technology firms are imitating different network technologies to gain the competitive advantage. Thus, according to my opinion, the differentiation is the best solution for these American firms to streamline products and attract customers. The rapid shift in revenue streams is possible due to this key consideration.
Moreover, the integration with the Chinese business regulation is also an applicable strategy. To align with Chinese business regulation, these firms can change the business model and emerge stronger. In this particular country, business ethics and corporate responsibility should be the main priorities instead of profitability and revenue streams. All these applicable strategies trigger the profitability and revenues in China.
References
Pandaily. (2018, January 30). Kai-fu Lee: Why American Companies Struggle in China. Retrieved from https://pandaily.com/kai-fu-lee-american-companies-struggle-china/
The Economist. (2013, November 30). American tech companies in China: A question of trust. Retrieved from https://www.economist.com/business/2013/11/30/a-question-of-trust
Vena, D. (2018, January 31). Why U.S. Companies Tend to Struggle in China. Retrieved from https://www.fool.com/investing/2018/01/31/why-us-companies-tend-to-struggle-in-china.aspx
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