Environmental Factors and Networks for Internationalization Process in the Chinese Market

by Xuelin Chen

Institution: Högskolan i Halmstad
Year: 2015
Keywords: Internationalization process; B2B companies; Environmental factor; Business network; Social network; Network approach; Impacts of network; the Chinese market; Social Sciences; Economics and Business; Business Administration; Samhällsvetenskap; Ekonomi och näringsliv; Företagsekonomi
Record ID: 1328721
Full text PDF: http://urn.kb.se/resolve?urn=urn:nbn:se:hh:diva-28415


<strong>Problem discussion </strong>– we identified the gap concerning the lack of researches in exploring the impacts of both business and social networks in B2B companies’ internationalization process based on the network model proposed by Johanson and Mattsson (1988), especially taking the Chinese environmental factors into consideration.<strong></strong> <strong>Purpose </strong>– The purpose of this study is to explore the importance of environmental factors and networks for B2B companies to internationalize into the Chinese market. <strong>Methodology</strong> – The thesis adopts the abductive approach and employs a qualitative research strategy. In order to obtain relevant information, multiple case study is chosen. The primary data are collected through semi-structured interviews with three Swedish B2B companies. Secondary data such as scientific articles, reports and books are also used in this thesis. <strong>Findings</strong> – Firstly, this thesis concludes that B2B companies’ business activities in internationalization process in China are influenced by four environmental factors: cultural, legal, economic and political factor. Secondly, business networks have impacts on the process of international extension, penetration and international integration, whereas the impacts of social networks are clearer in the phase of penetration. Thirdly, in China, there is no clear distinction between business- and social networks, but the building of trust is important in developing networks. Besides, B2B companies have to rely on their local employees when utilizing Guanxi in business activities. <strong>Managerial Implications </strong>– The managers should not only focus on the advantages, but also constantly perceive the risks in the Chinese market. Besides, managers could also take specific advantages of their Chinese employees’ social networks. Furthermore, managers should connect and coordinate the networks in different countries. Finally, managers could rely on their local employees to utilize Guanxi in business interactions. <strong>Theoretical Contribution</strong> – Firstly, this thesis identifies four key market environmental factors and their impacts for companies’ business activities in the Chinese market. Secondly, this thesis contributes to Johanson and Mattsson’s (1988) network approach by elaborating on the impacts of both business- and social networks in the three phases respectively. Thirdly, this thesis proposes a new conceptualized model that provides a deeper understanding and a clearer demonstration of the importance of environmental factors and networks when firms internationalize into global markets. <strong>Limitations</strong> – The results of this thesis might be limited to generalize to all kinds of market segments or industries. Moreover, in this thesis, the impacts of social networks are only identified in the phase of penetration. <strong>Keywords - </strong>Internationalization process, B2B companies, Environmental factor,…