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How FIEs may sustain competitive advantage in China Adapting marketing strategy by the use of Guanxi

How FIEs may sustain competitive advantage in China Adapting marketing strategy by the use of Guanxi Purpose – The purpose of this paper is to show that the Guanxi characteristics in Chinese business culture may add to the understanding of foreign invested enterprise's (FIE) successful marketing in China. Design/methodology/approach – The authors surveyed the entry mode of 296 FIEs in China and examined their way of adapting marketing strategy to local culture. The authors used a conceptual model hypothesizing a system of variables that the authors subsequently tested using structural equation modeling. Findings – Market orientation was insufficient to obtain marketing capability in China. FIE marketing capability in China was dependent on Guanxi and learning orientation, showing the need for contextualization of marketing approaches. Research limitations/implications – This paper enriches previous research on marketing and makes a contribution to the existing literature on practical management in China. It is also relevant for marketing in other markets in transition. Practical implications – FIEs may develop these capabilities on their own or succeed trough partnering in China. The study also points at similar mechanisms in other emerging markets and economies in transition from previous socialist economies. Originality/value – The authors attempt to explore the main factors driving the marketing capabilities of FIEs in China. Few articles have shown how foreign companies may adopt Guanxi orientation to do this, which is the object of the present study. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Baltic Journal of Management Emerald Publishing

How FIEs may sustain competitive advantage in China Adapting marketing strategy by the use of Guanxi

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Publisher
Emerald Publishing
Copyright
Copyright © 2014 Emerald Group Publishing Limited. All rights reserved.
ISSN
1746-5265
DOI
10.1108/BJM-04-2013-0076
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to show that the Guanxi characteristics in Chinese business culture may add to the understanding of foreign invested enterprise's (FIE) successful marketing in China. Design/methodology/approach – The authors surveyed the entry mode of 296 FIEs in China and examined their way of adapting marketing strategy to local culture. The authors used a conceptual model hypothesizing a system of variables that the authors subsequently tested using structural equation modeling. Findings – Market orientation was insufficient to obtain marketing capability in China. FIE marketing capability in China was dependent on Guanxi and learning orientation, showing the need for contextualization of marketing approaches. Research limitations/implications – This paper enriches previous research on marketing and makes a contribution to the existing literature on practical management in China. It is also relevant for marketing in other markets in transition. Practical implications – FIEs may develop these capabilities on their own or succeed trough partnering in China. The study also points at similar mechanisms in other emerging markets and economies in transition from previous socialist economies. Originality/value – The authors attempt to explore the main factors driving the marketing capabilities of FIEs in China. Few articles have shown how foreign companies may adopt Guanxi orientation to do this, which is the object of the present study.

Journal

Baltic Journal of ManagementEmerald Publishing

Published: Dec 20, 2013

Keywords: Competitive advantage; Strategic orientation; Entry mode; Competition type; Marketing capability

References