This report is discussing upon giving the advice to the United States technology organization for them to enter the Chinese market with the most appropriate entry mode. Change is a continuous process which is being observed by the business environment all around. In the midst of the changing environments of business, the entry into the international markets cannot be ignored under any circumstances. The globalization phenomenon is at its peak and all organizations around the world are striving towards having a global presence to attain success (Peng, 2000).
Globalization has become an important aspect because of the need and demand of product and services of different companies in different regions. This has caused all organizations to approach towards making a global presence of their firms. Organizations around the world are looking for such opportunities and since China has been associated with the World Trade Organization; and therefore major organizations seek market entry into China. China has plans to make their economy a market based economy and therefore opened the gates for new market entries into China (Williamson and Zeng, 2004).
China has a developing economy that is growing on a very fast pace and attracting a lot international organizations in their country. Market entry modes have been changing and developing constantly. At every era there seems to be a successful market strategy of entering new markets and as discussed in the case below that Foreign Investment Shareholder Corporation is a more reasonable option for the US organization to enter into China.
Foreign Direct Investments (FDI) can be defined as the direct investments that an organization makes on the productive assets in any foreign country. A foreign direct investment is an extremely important aspect of the economic system present on the global basis (Huang, 2003).
The FDI has been categorized more expensive than the other market entry