Internationalization of Business Enterprises - Essay Sample

Abstract

In the highly competitive business arena, the winner takes it all, and this prompts sober business practices. In China, there is stiff competition, and this factor necessitates the need to expand markets and venture into untapped regions. Having learned that there are untapped business opportunities in Malaysia as well as other countries, the Chinese government decided to facilitate internationalization of business organizations with the capabilities of running international ventures. This gave birth to "Going Out," and since then, Chinese businesses have been flocking Kuala Lumpur. The act of "Going Out" turned out to be exciting business phenomenon in which scholars have been interested in know what the Chinese government and businesses did and how they did it. This paper is a research proposal on the topic, and it articulates "Going Out" as a contemporary business activity that has seen Kuala Lumpur overrun by Chinese business organizations. This study also stretches to cover the aftermath of the internationalization of Chinese firms, particularly in Kuala Lumpur, and this touches on the international uses of the Chinese Yuan.

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Introduction

China is firing a cascade of debate in every continent because of her "Going Out" policy (Gerrick, 2012). This policy has seen Chinese multinational companies and Small and Medium-Sized Enterprises (SME's) storm foreign markets, especially Kuala Lumpur, Malaysia. The policy rallies Chinese business enterprises behind a national goal that aim at achieving more investment, and this happens amidst suspicion, risks, and benefits (Moran, & Oldensik, 2010). This policy is facing turbulence resulting from various sources and for various reasons. For instance, there is a debate on whether or not China has enough resources to serve native citizens as well as the foreign market in Kuala Lumpur (Peng, 2013). The debate escalates when the major industries and processing plants in industrial zones such as Jiangsu, Shanghai, Guangdong, and Shangdong successfully venture in Malaysian market leaving others behind. The bone of contention is the uneven nature of development in the country (Peng, 2012). This implies that this unevenness is exported to Malaysia; a phenomenon which make people frown because of imbalance in development.

Research Questions

Research questions form the pillar of any research by firing the cascade for knowledge generation (Alvesson, & Sandberg, 2013). In this study, there are various questions unearth knowledge on the various aspects that need apprehension. Below is a countdown of the questions.

What is the logic behind, or rather essence of "Going Out?"

What happens when the foreign market demand more than what China's outward foreign direct investment business organizations have to offer?

What are the market entry strategies, and how do these firms deal with the already existing business organizations offering similar services and goods?

Research Objectives and Statement Problems

Research objectives are a systematic guide to the research process (Sreejesh et al., 2014). Thus, they must be precise and on point. The research dissects China's "Going Out," thereby unearthing how Chinese firms thrive and flourish in Kuala Lumpur. This is achieved by evidencing operational strategies employed by these firms in entering and penetrating Kuala Lumpur's market. to this end, the primary objective erecting is best described as "what Chinese multinational companies and SME's organizations do to excel in Kuala Lumpur, Malaysia."

In any study, problem statements should be eligible for tests through pragmatic and empirical approaches by the help of data collection (Khan, 2011). Thus, it should not associate with ethical judgments, assumptions, and unproven controversial allegations. This study is no exception, and it is only through data collection that the hypotheses should be approved, and confirmed to be facts. Some of the problem statements arising include;

Malaysian business enterprises are inferior as compared to their Chinese counterparts, and this accounts for the flourishing of Chinese businesses in Kuala Lumpur.

China is saturated with industries, and thus, the necessity of exploring other markets for profitability and expansion is critical.

The Chinese regime facilitates the increase in the number of companies moving to Malaysia.

Literature Review

Scholars have been working on China's increasing global presence, and the point that erects is her diplomatic approach. Malaysians consider themselves as brothers with common interests with China. However, Malaysia presents a business environment conducive to both locals as well as international entrepreneurs (Jakosen, 2014). As such, they welcome Chinese into their land without jitters. Again, China's diplomatic position is characterized by flexible and soft. That is, they are aware of when to collaborate when to fight as well as when to engage into or stay away from confrontation (Shambaugh, 2012). The most significant attribute displayed by the Chinese is the fact that they do not involve themselves with the internal affairs of Malaysia. They major in trade. This move is geared towards enhancing economic growth led by exportation in which Chinese multinational companies, as well as SME's, pursue Kuala Lumpur's markets. As a result, China's Outward Foreign Direct Investment (OFDI) has thus increased immensely. However, much of this work is as a result of the global recession of the 1980s. The Malaysian economy drifted south, and this is how Chinese businessmen found vast opportunities in Malaysia (Gomez, 2012).

Since the inception of "Going Out," China's OFDI has increased significantly. In 2008, it reached $55.9 billion, and this is a twenty times improvement in a decade (Wei, 2010). Internationalization of Chinese firms thrives on the fact that there is the support of the Chinese People's party as well as political stability in the nation. This enables these companies to exploit their full potential. The subject touching on the internationalization of Chinese Yuan that happened in 2009 also counts (Zhang & Chan, 2011). This means that residents of Kuala Lumpur can purchase goods from Chinese businesses in the city using the Chinese Yuan. Naturally, this makes business easy by eliminating the need for currency exchange. Still on currency, the Chinese devalue their currency like they have been doing for a long time, and this is a factor that counts in enhancing international trade in the process of internationalizing the Yuan (Prasad, 2016). In this fashion, the government manipulates their internationalized currency in their favor, and this means profitability to their firms operating in Kuala Lumpur, Malaysia. Lastly, the supply chain in the country also counts. Chinese businesses have penetrated the Malaysian market due to ethnic Chinese distributors (In Bhattacharya, In Kripalani & Amrith, 2015).

Research Methodology

Based on the nature of the research, there is a variety of research methodologies applicable in this study. This means that qualitative alongside quantitative methods of data collection are fruitful. Combining the two methods disclose much information about the multinational and SME's exporting their operations to Kuala Lumpur. These methods help in obtaining both qualitative and quantitative data both from the companies as well as the market. For instance, sampling is a technique suitable for the examination of consumer satisfaction regarding the services rendered by Chinese firms operating in Kuala Lumpur (Khan, 2011). This comes after preparation of research designs and models that obtains action-oriented and optimum results from the respondents at minimum expense (Arther, 2012). The fact is, research can be done, but that does not mean that it serves its purpose by answering research questions and solving research problems. These two necessities of research must transpire successfully, and at reasonable costs. An exemplary research method is a participatory method in which the researcher participates in the consumption of goods and services of these Chinese OFDI. In the process, he or she gets the opportunity to get the reaction and response of consumers on the goods and services rendered to them (Chilisa, 2012). This extends into the subject of the importance of collecting first-hand information from primary sources and consequently referring to secondary sources for affirmation (Daniel & Sam, 2011).

The significance of the Study

The study primarily evidences the empirical strategies and moves that Chinese multinational companies alongside SME's deploy in exploiting the marketing concept of internationalization and OFDI. Thus, the study shows how these companies enter and penetrate the Malaysian market, and thrives (Kim, 2015). Again, it also shows the commitment of the Chinese government in ensuring that Chinese firms find and exploit markets outside the country.

Conclusion

Internationalization of business enterprises is the new thing regarding market catchment and expansivity is concerned. This implies that governments and business organizations will do anything to ensure that they identify a viable foreign market. However, identification of a foreign market is one thing and venturing into it is another. This is a point that joins the dots witnessed in this study because it reveals the nitty-gritty used by Chinese companies in establishing themselves in Kuala Lumpur.

References

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