GM Success in China

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GM success in the Chinese market is due to the fact that it has found the perfect dealer and also the company found out how to build the right car for the right market. According to Joe in his article, he mentioned that GM has proved the company's global strategy by its success in the Chinese market. Basically, the success of GM in China is mainly due to the joint venture with Shanghai Automotive Industry Corp.

Although, the Chinese market is a massive market, many companies failed to comply with it. In general, the Chinese people are very difficult to absorb, because they are ethnocentrism, meaning that they are very proud of their products and difficult to adapt to others. Thus, according to Dunne, president of Automotive Resources Asia Ltd., GM developed vehicles that are small, fuel-efficient cars deigned for the Asia market with the image of an American product.

According to the article GM sold 665,390 vehicles in 2005, with 11.2% market share in China. These figures show the success of GM in China and how fast the company reached this level, where on the other hand, the company is struggling to keep customers in the United States. Not only that but also GM's loss in the third quarter of 2005 from North America operations was $2-billion, with comparison to the gain from China the company made $114 million within the same period.

Returning to Barney's framework, GM's unique historical condition is one reason behind the success of GM. The company was the second if not the first in the industry of automotive, which gave the company world reputation in this industry and gave the company the first mover advantage.

In Barney's framework, it says that the interaction between physical resources and socially complex organizational resources is at the heart of many of the difficulties that US firms have had imitating the manufacturing success of Japanese firms. This is the case with GM's loss back home in the United States. "Despite investment in physical technology at five hundred leading U.S. manufacturing firms of over $800 billion, quality and costs are often still not comparable to those of competing Japanese firms." (Naj, 1993)

According to the manager of Middle East operations when I asked him about the success of GM in China, during a meeting that was organized by AUS study tour to Florida, he answered GM was successful to find the perfect dealer which is Shanghai Automotive Industry Corp. That's it, GM was able to find the perfect dealer and it is not due to its brilliance.

Effect of Danish Boycott

In Saudi Arabia people responded to the controversial cartoons published in the Danish and Norwegian media by boycotting the Danish and Norwegian products.

The boycott happened by all most all supermarkets with support of consumers. According to the article that was published in Arab newspaper, in Saudi Arabia, it mentioned that the manager of a flagship supermarket in Jeddah said "imported Danish dairy products accounted for about five percent of their sales in product volume but more in terms of income."

Referring to Porter's five forces, that buyers have the power to play competitors off against each other which ending up affecting the profitability of the industry. It also mentioned that a buyer group is powerful if several characteristics are met, some of which I will be discussing that are related to the Saudi boycott of the Danish products.

First characteristic is when the buyer group is concentrated or purchases large volumes relative to seller sales. Referring to the article it says that the Danish products consist of five percent of their sales in product volume but more in terms of income. Hence, 5% as diary Danish products is not small share, these only Danish products from the diary industry.

Second characteristic is, if the products are standardized or can't be differentiated. In the article it mentioned that "supermarkets labeled the shelves indicating that Danish products have been withdrawn: and in other Shelves were fully stocked with familiar Danish products," added later that customers' feedback toward that was positive and switching to other substitutes was normal. Also considering the buyer power of wholesalers and retailers, where in our case supermarkets chains were very influential on consumers' purchasing decisions. Referring that to Porter said "retailers can gain significant bargaining power over manufactures when they can influence consumers' purchasing decisions.

According to Hamel's business concept innovation, customer interface is how the producer and consumer reach one another.

Relationship dynamic is one element of customer interface which is the relationship between producers and customer. In this case, a boycott Danish product was very effective and influential for the reason that relationship between the Danish companies and the customers was very weak. You can say there was no firm chain that interconnects them.

Another element of customer interface is fulfillment and support which are another reason behind the effective boycott in Saudi Arabia. The Danish companies were not responsive to their customers in such a way that could stop the Danish newspapers or even do anything that could survive their market shares in Saudi Arabia. The Danish companies heavily depended on agents in the Saudi market rather than establishing their main offices in the country and have better insight about the market and its customers.

Google's Barriers In China

"Forces outside the industry are significant primarily in a relative sense; since outside forces usually affect all firms in the industry, the key is whether firms have differing abilities to deal with them," Porter five forces. Therefore, Google could not deal with outside forces that make it difficult for Google to overcome the Chinese companies. Google did not have competitive advantage in order to conquer the market and beat any company stands in its way.

Barrier to entry in China is increasingly high and especially in the internet industry where there are more than one company in this industry. All of them are perfect in the market and each one has a slice of the internet pie.

The ability of other internet Chinese companies and their free offered services have helped them to compete with Google in China. Many foreign companies failed to conquer the Chinese market and Local Chinese companies. Google is one of these companies that faced many problems in China for the huge competition of the Chinese companies such as, Sohu (SOHU), Sina (SINA), and Netease (NTES).

Ethnocentrism could be one aspect that prevents Google from sharing a slice of the internet pie in China . The Chinese people are sticky to their national products and services rather than foreign produtcs and services. Also local companies been able to offer its customers what been offered by foreign companies has hepled local compaines to be superior in the market.

Google being non-Chinese company has negatively effects its ability to be solid company in China. Although Google hired former Microsoft executive, Dr. Kai-Fu and other top people from Chinese companies, the company still lack the ability or strategy to adapt with the Chinese market and be truly "Chinese Internet company".