Challenges and strategies for multinational enterprises (MNEs) in China

: an exploratory review

Abstract

Over the years, globalisation has become a common phenomenon, and emerging economies like China have entered the equation, attaining the highest growth rates. Multinational enterprises (MNEs) operating in China confront a variety of challenges, such as cultural differences, complexity in the regulatory environment, and rivalry from local businesses. Thus, MNEs must employ the proper strategies in order to overcome these obstacles.Through an analysis of the existing literature, comparison, and summarisation between authors and by addressing recent cases of MNEs in China, this article aims to answer the questions of what the main challenges for an MNE in the Chinese market are as well as the main strategies to achieve success in a market with so much potential.One strategy that has proven effective for MNEs in China is building strong relationships with local partners and government officials. This can help MNEs understand the local business environment and navigate complex regulations. Localisation also proved to be an important strategy with companies needing to adapt products and marketing to match the needs and preferences of Chinese consumers. This involves modifying products to fit local tastes or using local marketing channels to reach consumers. Local businesses, in a highly patriotic nation,have also shown themselves to be a serious threat since they have a better understanding of the market. Thus, MNEs must have a strong commitment to their strategy, invest in R&D, and delegate decision ­making authority locally to be competitive and flexible enough to respond to a highly dynamic market.

Date of Award	23 Jan 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Pedro Parada (Supervisor)