Competitive Analysis in China
Business competition can be volatile, complex and fast-changing in China. Digital Disruption, price competition and commoditization can pose challenges to your business.
Discover how cutting-edge Competitive Analysis can boost your profitability and performance.
Strategy Research, Competitive Intelligence and Competitive Analysis are essential. They uncover new tools, tactics, data and strategies to outmaneuver other market players in highly saturated markets.
SIS has over 36 years experience in serving clients in expanding to Emerging Markets like China. Challenges such as Price Competition and Product Commodification abound in China. We bring the expertise, solutions and team to help you uncover new sources of advantage in the Chinese Market.
Competition in China
The average market shows two extremes when it comes to competition: minor, very local firms compete on pricing at one end of the market, while bigger, higher quality, local players compete with international companies for the more lucrative business at the other end.
Consumer, director competitor and supplier consultations, and examination of the websites of competitors, financials, and publicly held government and other records are some of the research tools necessary to understand the often complex competitive landscape in China.
The Strength of the Chinese Economy
The rise of China as an escalating economic power has astonished various analysts and experts around the world.
It first gained its standing as one of the major manufacturing centers in the world, forming companies from networking gear manufacturers to toy makers, which have effectively used their low-cost advantage to vie against corporations based in developed countries. Some Chinese firms rose up to contest the supremacy of multinational corporations as western countries (including the US) started to attribute China’s achievements to the great quantity of low cost labor available.
Complexities in China
The country’s phenomenal economic growth over the last thirty years has not come without political and social hardships and challenges.
Since China remains a centrally planned system whose focus is on increasing its presence in a global economy that calls for different policies and structures, the future of its transition to market economy is still being written. Still, research suggests that the basic marketing strategies and practices of Western countries are effective in China.
The transition offers the ideal environment for companies to expand. In addition to a competitive analysis, it is vital that companies wishing to expand into China do a market and a country analysis, as well as an internal SWOT analysis. The country analysis usually comprises three categories: political, legal and economic conditions, infrastructure analysis and culture. A full investigation of these three categories will help a country to decide if China offers a reasonable expansion route or if it is too much of a risk.
Growing your business in China
The transition offers the ideal environment for companies to expand. In addition to a competitive analysis, it is vital that companies wishing to expand into China do a market and a country analysis, as well as an internal SWOT analysis.
The country analysis usually comprises three categories: political, legal and economic conditions, infrastructure analysis and culture. A full investigation of these three categories will help a country to decide if China offers a reasonable expansion route or if it is too much of a risk.
China is a Mosaic of Cultures
The Chinese Market includes different languages, attitudes, purchasing preferences and opinions.
High performing companies remain inventive and flexible. Having a firm understanding how their company would fit in each particular market is important as there is no distinct customer profile.
Opportunities in China
This is the world’s largest mobile user and internet population, and digitization has become increasingly important.
The telecommunications market has seen fast development, with energetic growth in mobile subscriptions and extensive GSM service networks across the country gradually and efficiently transferring to third-generation (3G) networks. Mobile phones, which used to be luxury products that only well-off company officials could pay for, have consequently become almost everyday necessities amongst city consumers. Mobile phones have also quickly penetrated among the more inland or rural Chinese households.
On the other hand, China is losing ground when it comes to the globalization of the supply chain: numerous product recalls from milk products to toys, and severe brand damage are taking their toll and compelling companies to rethink their sourcing strategies.
Why Competitive Analysis is Critical in China
Competitive Analysis in China is important because China is no. 1 in population globally. It’s also no. 1 in middle class urban consumers, and it is the no. 1 destination for foreign investment.
China is the no. 1 exporter to the US, and the no. 1 consumer of oil and steel. It is currently the world’s second largest economy. In spite of these numbers, expanding a business into China will challenge a firm in numerous ways, since the way business is done in China is so unlike anywhere else, and also because expanding in China often involves more risk than pursuing many other strategic options.
