Doing Business in China - A Best-practice Model for Foreign Invested Small and Medium-sized Enterprises (SMEs)
SMEDoing businessBest-practiceModelChinaSTARBusinessStrategyInvestInvestmentLogisticsHRCultureDevelopment zoneSalesMarketingManagement of enterprisesFöretagsledningManagementBusiness and Economics
Foreign invested SMEs have recently become increasingly interested in China. The enterprises are in this report categorized as second wave companies since they follow the footsteps of previous pioneers, of which mostly were larger companies. The ambitions of the SMEs are either to sell products on the ever expanding Chinese market or to utilize the potential of low cost production for global markets. The existing literature is fragmented and solely based on the experience of larger companies. We believe that SMEs are facing new and different challenges, and thus a new generic theoretical frame work is desirable. Our comprehensive best-practice model, called the STAR model has five important perspectives. The five perspectives are HR & Culture, Sales & Marketing, Logistics, Development Zones and Investment. The STAR model addresses the challenges and opportunities in all these perspective. By utilizes the model foreign invested SMEs will mitigate the most dominant and common risks faced when doing business in China. The model has been successfully tested on a case company, Emotron, a second wave company in the electronic-mechanical production industry.