Como compensar los errores producidas en anteriores fases

6.1 Discussion:

The + and - scores given in the practical framework of paragraph 5.2 are made based on the theory, informal conversations, questionnaire and expert interviews, which is quite broad-based. However there is still room left for discussion, because there are opposing views among the different theories (like the opposing BGV and TSV) and differences in performance within companies. Changing the score on one factor might change the outcome of the most favorable entry mode, because another entry mode might end up with a higher amount of +’s.

There is a certain overlap between several affecting factors and this might affect the final results. If one single result affect two factors, in a positive or negative way for both, then the outcome might be less reliable. However, tried was to exclude this duplication as much as possible.

Not all the relations could be measured, because the Embassy did not want the confidential information about the Dutch companies in the ‘outside world’. Otherwise more relation could have been measured, for example the relation between the sector the company is active in and the financial performance or the market knowledge and the adaptation method. Since the results are confidential it is not possible to show the relations between the questions. Only the results of the questions can be presented.

6.2 Theory and results

Based on the results of the business survey and the expert interviews it seems that the theory of Johanson & Vahlne (1977) is outdated. Dutch companies moved from the Netherlands to China in one instance for production, while PRC and NL are culturally and geographically very distant. This is not in line with the more gradual theory described by Johanson & Vahlne. Nowadays, some companies make the same step to China, however for selling their product instead of manufacturing. Most companies prefer WFOEs and JVs over exporting from the beginning, which is also not in line with the theory of Johanson & Vahlne (1977) and therefore the companies seem to prefer a BGV (Oviatt & McDougall, 1994). The transnational and multinational strategy in which there is a high level of local differentiation/responsiveness (Som, 2009) seems to be more appropriate for that view. A possible explanation is given by Oviatt & McDougall (2003) as they describe firms that are seeking for competitive advantage in multiple countries, the born global. These companies tend to make more culturally and geographically distant steps in order to accomplish competitive advantage.

The theory of Dunning (1980) is still applicable to a large extend. However, one side note needs to be made. Most Dutch companies in China have internalized ownership-specific advantages, however they also want China-specific information (in order to achieve location advantage). This consideration brings some tension for some companies, because this advantage can be achieved by acquiring or collaborating with a Chinese company, but this goes at the expense of the ownership and internalization advantage. One way of solving these problems is by hiring a specialist that has got some expertise in this area (Stratford, 2013).

The results of the research executed by Holtbrügge & Baron (2013) match the results of this research to a large extend. In both researches exporting does not seems to be preferred by companies and WFOEs are chosen over JVs. However, the results of Holtbrügge & Baron (2013) are more TC based, while this research is using the ECTM as described by Brouther (2002).

48 6.3 Conclusion

In this research a practical oversight of all the influencing factors that Dutch companies need to cope with when entering China is given. First of all, the entry modes have their own advantages and disadvantages, like the degree of ownership, control, access to the market and initial investment needed. Based on these criteria some of the entry modes were not taken into consideration and the other entry modes (JV, M&A, Greenfield and exporting) were compared with each other.

Also the Chinese context was taken into consideration. This was done based on specific theory on China, informal conversations, a questionnaire and expert interviews. Based on these data it was found out that the Chinese government and the social-cultural differences are the main influencing factors for Dutch companies entering China. The influence of the government and social-cultural differences have different implications and had an influence on different factors.

All together this led to 15 different factors that had an influence on Dutch companies that entered the Chinese market: initial investment, degree of access, long-term profit, control over operations, government & operational barriers, market knowledge, start-up time, strategic reasons for China, cultural distance and defending intellectual property. These 15 factors were ranked from – (weak) to ++ (good) on all the four different entry modes and put in a framework. The acquisition (+6) had the best score based on the affecting factors (optional factors are not taken into account, because they are company dependent), followed by the Greenfield (+4), joint venture (+2) and exporting (-3). However, companies can adjust the framework to their situation by adding more weight to important factors and less weight to unimportant factors. The entry mode that ends up with the highest amount of +’s after that is the most favorable entry mode for that company.

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