Question

Question 5 (600 words) For supplying a ‘business travel ready’ accommodation service, should ABTV expand further in China? Why or why not?

Answer 1

ABTV had a very wide availability of different expert in the same specific organisation. Which type of approach is helpful in developing countries such as America and other surrounding countries. Entering the Chinese Market one has to be very very competitive as well as Chinese Market usually does not accommodate foreign Service companies very quickly. Type of approach would reduce the overall impact of ABTV in the Chinese Market as company does not have China specific professionals. It would limit the overall market for the company and reduce the impact of the revenue generation from the same Chinese Market. Entry in the Chinese Market would require a proper analysis of the specific location as China is used in size and implementation of services in China requires understanding of different regions as each and every region responds differently to the organisations.

High number of available options as well as very huge competition in the Chinese Market would also reduce the impact of the company. ABTV should look and assess the impact of other competitors by carrying out competitor analysis as well as observation of the market for a long time before entering China. Chinese Market is highly influenced by the political aspects of the Government and the policies are in favour of the Chinese companies,competing in the foreign environment would be really tough for ABTV . Limiting the level of investment for testing out small subsidiary in China would be appropriate as it would provide the basic idea of working structure for the company and the problems which are involved in the Chinese working environment.

Politically China is very unstable and this is one the most important parts to be analyse for the company for working in Chinese environment. Chinese political policies are prone to changing now and then and which reduces the effect of foreign companies in Chinese Market as well as it is beneficial to the local Chinese companies which are direct competitor of the company in the specific working environment. This political instability creates a huge impact on the overall working structure of any company and a company such as ABTV would have to face a strong political force from China as it is working with the specialised professionals for other companies.

Technologically China is really advanced and the main problem regarding this advancement is that China uses their own technology to work with international brands which creates a technological gap between two organisations. Ucc understanding of the electronic records systems which is essential for a company like ABTV. This would reduce the overall efficiency as well as productivity of the company as for understanding the electronic records and doing different services in China would require extra efforts for understanding the situation. From the social aspect china is very oriented towards their own culture and does not easily accept foreign companies or foreign culture in their working operations. Type of approach from China would reduce the overall impact of ABTV in the Chinese Market.

There are legal risk involved in the Chinese Market as well because of the companies Limited understanding due to its foreign operational structure, legal implementations could also be very affecting for ABTV to be operative in the Chinese environment.

All in all we can say that ABTV has an opportunity to work in Chinese environment but it has to be very very precise and careful by successfully assessing the market environment and working according to that. Iran stability and social cultural aspects reduces its chances of getting success in Chinese environment that's why ABTV is suggested for not entering the Chinese Market without doing any prior assessment of the environment.