The Chinese Regime: Will It Last?

Various foreign brands have made an appearance in the country for the past decade. Brands from different countries like USA, Korea, Japan, China, Thailand and many others have been emerging in the local market trying to take over various industries such as electronics, services, consumer goods etc. but amongst these countries, one country stands out, and that is China. But has the Chinese brands exhausted their market? Has the Filipino market grown tired of these brands? How do these companies manage to attain dominance over the local market? These essay aims to address China in the context of the global and Philippine market, their strategies, their capabilities and if they are going to last in the global market.

Ever since the colonial period where the country was taken over by various colonist, most countries, like China, has left a lasting impression on the country when it comes to culture, beliefs and maybe even in tastes which might explain the ever growing popularity of Chinese brands or Chinese-made brands in the country. But a new era is fast approaching and if China I not able to cope with it it might struggle in maintaining its competitive edge against other foreign global corporations.

“China faces new challenges as economics growth slows, wages and other factor cost rise, value chains become more complex and consumers grow more sophisticated and demanding” according to an article written by Eloot, Huang and Lehnich. In this fast paced world that we now live in, customers these days demand goods that are innovative which requires engineering and manufacturing capabilities which many companies currently do not possess. Companies are now trying to compete head on with it comes to their R&D technology and their ability to satisfy the ever growing expectations of the market.

Rising value-chain complexity and a highly unpredictable economic environment is also another challenge which companies, not only China, has to face in order to remain competitive in the global market. Urbanization has greatly contributed to these challenges. With the rapid urbanization and greater affluence, “Product makers are required to manage, make and deliver an array of increasingly diverse products to increasingly remote locations” according to Eloot, Huang and Lehnich. This implies that the market is getting bigger and this entails that companies satisfy their needs and has to reach out in order to do so even If it means trying to reach out in the farthest places of the world. In addition, the heightened volatility of the market due to the uncertain global economic environment has greatly posed a challenge to the global market especially China.

These new challenges are what most companies, not only China, have to face in order to survive in the competitive market, not only here in the Philippines, but around the world. China has been the leader for manufacturing in the past decades but these new challenges poses a threat to their existence in the global scene. Addressing these problems and coming up with solutions to adapt or counter it will greatly determine the success or failure in the global market of these brands. Adaptation is the key for these brands in order to survive.

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ASEAN on Local Brands: The Effects

The ASEAN 2015 has been the talk of the town recently. The government is clamoring over its effect on our economy; various universities and institutions has paved its way in order to prepare for the implementation of the project. But the question remains, how will it affect the local brands? Will it be beneficial or will it pose a threat? Our stand is that it might pose a threat to local brands especially those who are already struggling even before the arrival of the project. This essay aims to address the points that might threaten local brands and what they can do to alleviate its effects.

“One of the main objectives of ASEAN 2015 is to create a single market and production base by ensuring a free flow of goods, services, investment, capital and skilled labor. Which means the country, along with other ASEAN Member States (AMS), should be open to zero import duties for ASEAN products and services by 2015.  AMS nationals, meanwhile, should be able to work anywhere in the region without a work permit.” According to an article written by Ian Jester de Vera.

Local brands will be at a disadvantage at the implementation of the project. Foreign brands that are a member of the ASEAN will be able to enter the market with ease. It is expected that Philippine companies will face a stiffer competition when it comes to vying the attentions of their customers. The intense competition will therefore raise the bar for innovation, quality and productivity, which will enable businesses to compete head on with other players. But local brands already struggling even before the implementation of the project will have a harder time adapting and coping with the situation.

Rather as a threat, local companies should see it as an opportunity. Even for struggling local brands. With the implementation of the program, aside from the other countries, Philippine companies will also be able to enter the global market at ease. “Local brands show what we are, Global Brands show what we want to be” according to an article written by Hoult, Quelch and Taylor. Leveraging the ASEAN 2015, companies will be able to enter the highly homogenized world of Global brands where according to Theodore Levitt “Success in world competition turns on efficiency in production, distribution, marketing and management and inevitably becomes focused on price” as written in one of his article in Harvard business review.

Truly, the ASEAN 2015 might pose a great threat to local firms but on the other hand it also gives us a window of opportunity to penetrate another market in a global scale. Many firms fail to compete with global corporations but with the implementation of the ASEAN 2015 it will only make it easy for other countries, including our own, to enter another market and compete in the highly competitive, highly homogenized world of Global corporations.

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LOCAL TO GLOBAL: Can They Survive?

Advancements in technology have led to various opportunities for local brands to go global by means of standardization. But with the fast-paced world we live in where the customers are the boss and the global companies are the lions that eating up the entire market share, in contrast, local brand are only gazelles struggling to survive. But will their entrant to the global scene ensure their survival? Or will they flop like most of the other companies? This essay aims to extract why the global companies fail and how they survive and compete.

The ability of a firm to enter the global scene doesn’t necessarily equate to success. Various factors and considerations are to be considered. According to an article by Douglas Holt, John Quelch and Earl Taylor “Global brands usually compete with other global brands”. It basically says that to succeed companies must strive for superiority on basics like price, performance, features and imagery.

Consumers’ understanding of global brands is generally restricted to that of the media and the decease-like discussions, posts and reviews that spreads over the internet. That is why companies should think global. Smart companies manage their brands like global symbol according to Holt, Quelch and Taylor. However, companies should be careful because people are either astonished or disturbed by this. And with that companies should monitor those perceptions constantly.

Customers are still customers. Based on a Harvard Business Review “13% of consumers are skeptical that global brands deliver higher quality goods” that is why most companies are unsure how to treat customers who dislike them. However, they are still customer and besides few business are in the position to ignore such a large number. Companies must focus on earning their trust by focusing on them as unsatisfied customers. But that can only happen if the firms are willing to invest on them.

Having stated how global companies compete and fail, we now have a better glimpse of what might happen to global companies especially those who are typically new to the global scene. The success of these global brands greatly depends on how they handle the basics, media and their customers. Should the companies fail to comply with these, It doesn’t necessarily follow that the company will fail. Rather, it has a greater chance of failure.

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Teched-OUT!

Social media, airplanes, machinery and smartphones — just to name a few. Technology has taken over our daily lives. An estimated 1.75 billion people in the world use smartphones. That’s a staggering 83% of the world’s population and it is still expected to grow by 2015. Truly technology has monopolized every single one of us and global corporations are capitalizing on this, making multinational corporations a thing of the past. It has already come to a point where global corporations such as Apple, Coca-Cola and Revlon opted to offer homogenized products instead of market-sensitive products. Corporations are now shying away from the core teachings of the marketing principles where the customers are the ones dictating what the corporations will sell in the market. People are openly accepting this fact by letting them sell the same way everywhere. In this essay, i seek to delve in to the effect of technology to globalization as well as its effect on the people and its competitors.

Daniel J. Boorstin, author of the monumental trilogy The Americans described our age as driven by “The Republic of Technology [whose] supreme law …is convergence, the tendency for everything to become more like anything else”. The rapid improvement in technology throughout the years has immensely contributed to the growth and development of corporations making them go global. By capitalizing on the benefits of the enormous economies of scale in production, distribution, management and the like by channeling these benefits gained into reduced global prices for their brands, they can easily decimate their competitors Because of this improvements in technology, markets are now pushed towards global commonality, corporations selling homogenous or standardized products.

“Everywhere everything gets more and more like everything else as the world’s preference structure is relentlessly homogenized”. -Theodore Levitt, The Globalization of Markets, Harvard Business Review. Take Apple for example, Apple is a highly homogenized product. It is the same across every country and yet it is welcomed by everyone. Other products such as Pepsi and other cigarette brands both sell well even though they undergo through various cultural barriers, such as religion, race, geography etc. This illustrates a growing trend on how people become generally homogenous.

Multinational corporations are now gradually losing its grip in the market because of globalization. Multinational corporations operate around the world but only in selected areas or countries plus the products they sell are generally culture or market sensitive wherein the products are centered on the markets needs and desires. The downside of this on the other hand is that multinational corporations operate at a relatively high-cost making their product a tad more expensive compared to global brands. An example of which is McDonalds and Jolibee, they offer almost the same products, cater the same market yet their prices are relatively the same considering McDonalds is a global corporation while Jolibee just recently became a multinational corporation. Why is that? Because McDonalds operates at a low-relative cost due to large economies of scale compared to Jolibee.

The improvement of technology really brought us into a new chapter in the 21st century. It paved way to corporations to take action and take advantage to go global which irrevocably made the world’s needs and desire homogenous along with the products they are offering. it also took its toll on multinational corporations, causing them to become obsolete and eventually trickle down into non-existence in the near future. What will happen in the future? We can’t possibly say, but one thing is true as stated by the iconic Theodore Levitt “A powerful force drives the world toward a converging commonality and that force is technology.”

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