International business & institutions Essay Example | Topics and Well Written Essays - 2000 words

International business & institutions - Essay ExampleKey Findings Regarding Market Opportunities in chinaw are China is one of the strongest economies of the world. According to statistics on the Chinese market, the number of urban households owning a reckoner stood at 27.8% in 2003 comp bed to just 2.6% in 1997. Speaking of white good manufacturing, its something thats world carried out on a very grand stage in China for a abundant amount of time now (Access Asia Limited 2006). White goods like washing machines and iceboxs live been possessed by most of urban Chinese population since the mid of 1990s. However, as such they havent been give in much quantity in the rural areas of China even though the according to the late(a) studies, the rate of such purchases by rural households has witnessed a sharp increase. The Porters adamant is frequently used to explain why certain countries enjoy an exceptional reputation for certain goods and services they produce. We all(a) know Ge rmany is famous for car manufacturing, Japan for its cameras and game stations the UK for its financial services. The Porters diamond helps us explain why all this happens. One of the determinant work outs of the Porters diamond is factor conditions. China is an over populated terra firma. The population of the country has increased so much that there are a lot of people roaming around jobless. In such a demand supply mismatch, toil can usually be hired at cheap rates. Refrigerator manufacturing usually requires labor to interconnect parts and oversee the running of machinery. A lot of money can be saved in term of hiring cheap labor. Another of the factor conditions that favors the production of electronics like refrigerators in China is the weather. The warm Chinese weather is perfect for the condensed gas found in the refrigerators condenser. Too hot or too cold weather a lot causes problems in the condenser and extra cost has to be incurred to fill again the leaked gas. De mand conditions are the second factor in Porters diamond. There would be obviously no reason to produce goods and services where there isnt a demand for such products. China is the most populous country in the world and with an ever increasing population, the demand for refrigerators can be foreseen to be high in the future. In such circumstances setting up a refrigerator manufacturing plant directly in China would result in an increase in profit and operose of costs. Cost would be lowered as they refrigerators be manufactured locally and therefore wouldnt have to imported and hence cost reduction could be experienced in the form of saving on import related duties and taxes. Hubei is a probable location for our European based company to set up a refrigeration plant. The Hubei province is located in the middle of China and is also referred to as the indispensable distribution hub of China. The province of Hubei has slightly more skilled labor as compared to other parts of the coun try and has already well-established supply chains. The province is already home to a lot of companies ranging from telecom sector to electronic appliance and computer equipment makers (Joint Environmental Markets 2000). Another factor from the Porters diamond is whether there are related or supporting industries or not. It is a generally well known fact that that industries often benefit from each other if they are located in the vicinity of related and supporting indust