The purpose of the report is to discuss the benefits of conducting business in China together with the cultural challenges that Australian firms are likely to encounter in China before considering the failed strategies of Australian firms attempting to enter China as well as the alternative strategies for Show Starters. Low-cost structure and large market are the core benefits attracting foreign companies to invest in China. However, foreign companies likely experience cultural challenges expressed through differences in the manner of negotiating with potential business partners and doing business.
Many Australian firms failed in China because they failed because of poor preparation and impatience, weak communications, excessive reliance on counterparts, and ineffective prioritization. Alternative strategies for Show Starters to succeed includes development of its own expertise in doing business in China, improving its communication competencies, establishing good relations with Chinese counterparts, and focusing on cultural integration. While these are all important strategies, Show Starters should focus on developing communication competencies and establishing good relationships with counterparts during the initial stages.
Effective communication builds a good impression while relationship building ensures the successful conclusion of negotiations. Prior to the opening of the Chinese economy to the world, its characterization was a sleeping giant because of its great potential as an economy and a political force. With the implementation of the open door policy, perception over China is as an awakened dragon because of its rapid growth that elevated its economic position as a newly industrialized country.
(Park 2008) Its open economy created business opportunities that attracted global business firms from many countries, including Australia. However, doing business in China is neither easy nor simple because of the need to overcome culture-based challenges for foreign firms to succeed. The report considers the benefits and cultural challenges that Australian firms would likely experience together with specific strategic recommendations and solutions for Show Starters to successfully enter and grow in China.