Case Study: GOOGLE IN CHINA “The Great Firewall” In early 2006, search-engine gi

Question

Case Study:

GOOGLE IN CHINA

“The Great Firewall”

In early 2006, search-engine giant Google struck a deal with the People’s Republic of China and launched Google.cn, a version of its search engine run by the company from within China. Launching Google.cn required Google to operate as an official Internet Service Provider (ISP) in China, a country whose Communist government requires all ISPs to self-censor, removing content that is considered illegal from search results. From a financial perspective, China represented for Google a dynamic and fast-growing, though increasingly competitive, market. Google’s decision to self-censor Google.cn attracted significant ethical criticism at the time. The company’s motto is “Don’t Be Evil,” and prior to entering China, Google had successfully set itself apart from other technology giants, becoming a company trusted by millions of users to protect and store their personal infor­mation. The choice to accept self-censorship, and the discussion and debate generated by this choice, forced Google to re-examine itself as a company and forced the international community to reconsider the implications of censorship.

This case was prepared as the basis for class discussion rather than to illustrate either the effective or ineffective handling of an administrative situation.

If you were going to expand your business to another country, which would you choose and why?

What legal, ethical, and cultural issues should you be aware of? Explain.

Answer should have 600 words or more

Explanation / Answer

There are many factors which needs to be considered before entering new market. For instance, take an example of company XYZ, a vertically integrated manufacturer, marketer and retailer of vitamins for turkeys in the US. Now to pursue growth, Company wants to enter into rapidly growing Chinese market. Below matrices should be considered deciding whether we should enter the Chinese market or not:

Legal & Ethical Aspects & Regulatory Structure: Company should be aware of Chinese Labor and employment laws. What are the EXIM (Import and export) restrictions? What the practices that are being followed by Corporate organizations. What is the procedure of investments & custom laws and regulatory requirements. What are the laws of taxes on product and services. What is the liability of manufacturer or distributor country.

Cultural Issues: For any business to be successful, it is important to do Cultural difference analysis. In our business plan, company should be aware if where Chinese consume turkeys or they would want to spend penny to purchase those vitamins. Hence company should consider if product or service provide a need by the consumers of china. How will company overcome the language difference issue? Will the company be able to manage the difference in time zone efficiently? Are there any business prospects which are rude as per local consumers? Will there be any religious or eating habits or lifestyle considerations that can affect the business growth?

Also starting a joint venture with the local player is one of the best alternative to handle above stated situations effectively. It is always suggested to do the Due Diligence before making crucial business decisions.

Overall Strategy to analyze whether to enter into new market can be analyzed as

Customer, Competition, Product, Company

Where Competition and product comes under the scope of competitor benchmarking.

Under Customer we can consider, what are the different market segments and size of each segment & Growth rate of each segment.

For example – In our business case Customers can be segmented as small farmers, Community Farmers or Corporations.

Competitor benchmarking, will be providing information of what kind of competition exists in Chinese market. Do we have any indirect competition or any substitute of the product? How does the competitor stand in terms of price and quality of the product?   

What is the core competency of the company in the existing market? What the existing cost structure of the company look like etc. Another complex matter is exchange rate fluctuations with the local currency and monetary restrictions imposed by foreign governments

The best way is to develop a business strategy to enter into untapped market, creating a well-developed plan to grow and mitigate risks of expansion in global market. Focusing on the above factors above is a good road map for expanding in overseas market

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