HOW HAS CHINA'S OUTWARD FDI DEVELOPED AND WHAT BUSINESS STATEGIES DOES Essay

HOW HAS CHINA'S OUTWARD FDI DEVELOPED AND WHAT BUSINESS STATEGIES DOES IT SERVE - Essay Example Since the establishment of this law, China has developed from a country with small reference for outward FDI, to an influential emerging nation. The development of China’s FDI policies can be divided into three phases; the first phase took place between 1979 to 1992, the second phase took place between 1993 to 2001, while the third phase has been ongoing since 2002. 1979 to 1992: Special economic zones. During this period, the joint venture law was enacted, followed by a number of accompanying laws aimed at directing the management and taxation of the Foreign Invested Enterprises (FIEs). The initial four Special Economic Zones (SEZ) were also established and this played a very significant role in encouraging the inflow of technology, managerial expertise, skills, and foreign investment. The government of China encouraged inflow of foreign investment into the special economic zones by offering a number of conveniences and special support in taxes. For example, the special econo mic zones enjoyed lower corporate income tax compared to other regions in China and additional tax holidays together with the FIEs, compared to those that the national tax legislation offered. Zheng (2013) points out that on top of the tax incentives, the government further broke down and rationalized official and conventional procedures, consequently reducing FIEs operation costs further. More SEZs were created, while the initial three Open Economic Zones were established in 1985, followed by others in the years that followed. 1993 to 2001: Transition period. China experienced a growth of its outward FDI between 1992 and 1993 (Zheng, 2013). As this happened, the government of China opened more cities to the outside world. Sectors such as finance, shipping, real estate, and domestic retail where foreign investment was previously forbidden were opened up to foreign investors. However, China suffered a reduction in the investment boom in 1994, due to unfavorable macroeconomic conditio ns, and despite the fact that the economy began to recover after this, it again fell due to the 1997 Asian financial crisis. Consequently, FIEs suffered lack of profitability, which was further exacerbated by the re-imposition of materials, equipment and machinery duties in 1995. The duty imposition policy was corrected in 1997 and foreign investment guidelines for industries were released by the state council in 1995 (Zheng, 2013). This was followed by division of industries into forbidden, restricted, or encouraged depending on their FDI status. Constant updating of the guidelines has taken place over the years mainly to promote environmental protection, encourage resource conservation, introduce advanced technology, and maintain a balance in regional economic development (Zheng, 2013). 2002 to present: Going global. After China’s acceptance into the World Trade Organization, there was an improvement in its inward FDI. This influenced the nation in becoming the number one d estination for foreign investment worldwide. In addition to this, the nation has also become a demanding source of outward FDI. This has been as a result of stimulation of outward FDI, high prices of goods, and the rapid economic growth within China. At the beginning of the twenty first century, the nation introduced a

Module review 1 Essay Example | Topics and Well Written Essays - 750 words

Module review 1 - Essay Example In the event, that the products are perishable, the uncertainties may result in losses caused by product damage. Notably, possibilities create complexities in operating commodity recovery networks especially in reverse flow. For example, an untimely breakdown or an inaccurate customer forecast can cause a shortage in product availability and the meeting of customer demands. Essential elements of supply chain management comprise of communication, advantage, efficiency, innovation, collaboration, and risk management. All the components to promote sustainability of the process (Altekar 2005). The following explains functions of each component. Communication helps in passing of information across departmental stores, suppliers, sellers, and manufacturers. A comprehensive communication channel enables awareness of potentials and uncertainties thus improving supply. Manufacturing and geographic postponement refer to business strategies that help firms maximize benefits while minimizing possibilities of losses. In this context, a company delay investment until the final phase the opportunity appears viable. Hence, the manufacturing and postponement refer to the measured actions by a firm to adjourn production or distribution of a commodity to the market until they receive an order from the potential customer. Geographic postponement helps in minimizing incidences of wrong production (Altekar 2005). In addition, the delays help reduce cases of deploying incorrect inventories by a corporation. In common, the business and logistics frameworks help in the reduction of anticipated risks in the product supply chain. The most notable example of the strategy includes Dell corporations build to order business online market approach. The company assembles or manufactures electronics based on the quantity of products ordered by the customers. Therefore, De ll Company reduces the risk voluminous production and supply

Competition in the Bottled Water Industry in 2006 Essay

Competition in the Bottled Water Industry in 2006 - Essay Example The bottled water industry has expansively grown over the years. In the US, people consume billions of bottles of water, each week. On the average, the American population use close to $16 billion dollars on bottled water. It is expected that by the year 2020, the industry will account for $148 billion, from the $70 billion in 2005. The growth rate of the bottled water industry is remains positive, because most companies are increasingly shifting from bulk productions to bottled water (McEachern 130). Here, there are different competitors, who compete to be the best in the market. The key competitors, Nestle, Pepsi, Coca Cola, and Groupe Danone have developed effective strategies, which have made them to remain key players in the industry. Therefore, it is challenging for local sellers to compete with them. There are new entrants, and these introduce lower prices in order to compete favorably. A new trend in the bottled water industry is the production of the â€Å"enhanced waters.à ¢â‚¬  This are highly priced, thus, more profits for producing companies. The bottled water industry faced a high threat of substitute products. These mostly include the healthier products. Flavored water, vitamin added water, and non-calories water is the key substitute products of bottled water. ... Furthermore, the bargaining power of suppliers is quite low. This is because of the large number of existing suppliers in the industry. Similarly, the bargaining power of customers is medium. Since water is a basic commodity, consumers will not cease buying it due to increased prices; however, they can choose different brands from the available producers. Intense competition in the industry is a major competitive force in the industry. This is owing to the fact that the number of key global competitors in the industry is small. In addition, new entrants in the industry might base on the fierce competition to compete aggressively using product pricing. Furthermore, differentiation is an important factor in the bottled water industry. Therefore, developing the product is important in order to beat competition, as a new entrant. Nonetheless, basing on these factors, this industry is attractive for both the existing and new entrants, as long as they adopt effective strategies to counter competition. The major competitors in the bottled industry use different strategies to remain relevant in the market. Nestle is the world’s leading seller of bottled water. In 2005, this company had a market share of 18.3%. By 2004, this had 77 brands in 130 countries. The major strategies for this company are its low product pricing, and entering into joint ventures. Additionally, the production of enhanced waters since 2006 has boosted its profits. On the other hand, Dasani, the brand of Coca Cola, has also enabled the company to make great profits. In 2005, Coca Cola Company invested $20 million in the advertisement of Dasani, and distributed to all retail channels of Coca Cola Company. In 2006, Coca Cola diversified Dasani brand to include fruit-flavor.