OPTIMUM USAGE OF ENTRY MODE INTO AN EMERGING MARKET, I.E CHINA MARKET : FROM A SINGAPOPREAN FIRM'S PERSPECTIVE

Abstract

The purpose of this paper is to explore, from a strategic point of view, the reason behind the fact that many foreign investors who entered the China market since 1992 have found that their investments did not reap in as much profits as they have estimated in the first place. The discussion is based on three aspects of a Singapore firm's business: the determinants of entry modes, the method of entering a foreign market and the way of doing business in China. The industry analysis for the China real estate market is followed by a collection of first hand information gained from interviews by "practitioners" in the China real estate market in Chapter 4. From these interviews, two important points have been noted. First the China market is more complex in information gathering and the mode of doing business than one would normally expect. Secondly, how to get around and make use of the regulatory system should be the focal point of real estate operations in China. It is believed that foreign investors who have got their fingers burnt have got a wrong analysis on the market. This is caused by factors including a wrong choice of strategy, over simplistic view of the China market, rapid changes in the China market, the undeveloped distribution channel in China and the lack of accurate information about the market. The information collected in this chapter shows that there exist a gap between the theoretical models on market analysis and the real picture in the China real estate market.