Q1) For this question, we will take a deep dive internal analysis of Baidu.
Firstly, let us take a look at tangible resources. Under this category, we have financial resources, organizational resources, physical resources and technological resources.
Financial resources [Tangible]
In 2007, Baidu earned about $86 million net income and $239 million in revenue (Ireland, Hoskisson, Hitt, p266). Majority of the revenue is contributed by an enlarged active online marketing customer base. We will elaborate details of the marketing activities under intangible resources. The accounts published show that Baidu is performing well financially.
Organizational resources [Tangible]
Baidu is incorporated in the Cayman Islands on January 18,
…show more content…
Geographic expansion [Physical resources]
Baidu focuses on the big pie, China, which has 1.37 billion people (InfoPacific Development Inc , 2010). This is a huge population and Baidu had a strong foothold in China. In January 2008, Baidu entered Japan market and launched www.baidu.jp. The objective is to serve the Chinese SMEs who are doing business in Japan.
Being local, understanding local [Organizational resources]
Baidu adopted a strategy that focuses on searches in Chinese. The company has an advantage on this as the team understood the Chinese language, culture and the operations as opposed to other overseas competitors.
First-mover advantage [Innovative resources]
Being the first who enter the Chinese online search market, it has gained majority of the market share in China. Many people are used to the platform and competitors find it too costly to imitate and roll out equivalent products and services to serve customers’ needs.
Taxation [Financial resources]
Baidu enjoyed preferential tax benefits and a relatively lower tax rate than Google. This is an added advantage to Baidu as the operating cost will be lower in view of the savings derived from lower tax.
Q3) In terms of the external environment analysis, we will focus on three areas, namely, general environment, industry environment and competitor’s environment.
Within the general environment, following are the areas to
Tangible resources are the assets that have physical form such as (land, cash, inventory, equipment, vehicles) that support
In 2014, Alibaba accounts for about 80 percent of all online retail sales in China, with 279 million annual active buyers and 14 billion orders. Its gross merchandise volume(GMV) surpasses the combined total of Amazon and eBay, recorded an enormous amount of $248 billion, which was 11 times the GMV of the second player in the field, JD.
In general, companies invest in foreign markets to increase profit and sales, or they desire to protect their profit and sales from competitors. General Motors is no different, and has heavily invested in foreign markets. No manufacturer can ignore the Chinese market.
Yahoo, Baidu and Google are the top three popular websites that people like to use. This is a reason of people using Yahoo to search things. Yahoo is an internet portal that includes a search engine and provides one of the best way to search the web for a given topic. Yahoo also attracts many users because Yahoo provides a lot of conveniences. In truth, many Chinese are gathering to America; they almost use Baidu to search everything. Baidu is a Chinese-American web services company and is one of the largest internet companies in the world. Importantly, Baidu offers numerous services for Chinese so that Chinese are very willing to use Baidu. The reason for using Google is very obvious. In fact, Google is an American multinational technology company. Google creates uncountable conveniences that make people's life easier. To close, Yahoo, Baidu and Google are the places that everybody can find credible sources of
1. The decision of expansion of the company’s franchise in China is a good decision from the perspective of global business. Being the leading producer of antivirus software, firewall software and some other computer security components in United States, China may be next profitable market for MegaComp. So, CEO
Resources are non-human things within an organization; they show how well an organization makes decisions in the short and long term. They are the financials and balance sheet with ratios. Resources are tangible and intangible.
Google was losing shares and internet users in the China market due to their lack of conforming to the censorship. They decided their core values still applied to the company but the main way they would be able to apply their product was to add another stipulation in their values. They determined it was also important to “be responsive to local conditions.” This means it seemed egotistical to try and change the Chinese viewpoint with their program. They instead changed their product to match the
When marketing in China you need to focus on the consumers getting to know the product before placing it in stores or opening a new business. The Barbie store opened in a single location in a large country which could be
Physical resources, human resources, financial resources and Intangible resources are identified. Infrastructure, information technology, location and marketing are physical resources. Organizational values, culture, reputation and brand consist of intangible resources.
Google entered China in 2006 with high hopes of taking over the Chinese internet market. In order to become a major player for internet search engines in China, however, they had buckled and filtered search results according to the Chinese government. When Google.cn was launched, a loud public outcry over its giving in to the Chinese government on censoring and filtering search engine results, the company faced a communications crisis. Since Google had always been known for its free thinking, this seemed a vast contradiction. From a communications standpoint, Google’s greatest vulnerability in this crisis lay with a tarnished public image.
The company initially entered into the Chinese market through licensing. Having gained sufficient local knowledge, it wanted to capture further the growing market with a new strategy which would be a direct involvement for which it could consider exporting and agencies. These would not allow it to form strong customer relationships. Cummins Inc. could also consider opening a Representative Office or a R&D Consortia but it wouldn’t give them access to the Chinese market. Another option for it is to set up a wholly foreign owned enterprise which would require very high investments and intense market study. Finally, Sino-US Joint Venture was the best option for them as it not only allowed them to enter the market fully but also to share the costs and risks with its Venture partner.
Success for a business in a large market such as china can be a very difficult thing to achieve; there are many factors that can affect the success or failure of a business that decides to merge into China’s markets. Most people would assume that due to the very large population of china (roughly 1.35 billion/1,363,496,913) operating a business there would not be a problem, this however is incorrect, just because there is lots of people there doesn’t for a minute make it any easier to set u-p and run a successful business.
There is also the chance to join with other companies such as the cooperation opportunity with 3M. The 3M proposition definitely is a value added advantage to Yunnan Baiyao as it will be able to leverage off 3M’s global presence and expertise that it lacks. Being associated with a reputable American company may also provide easier access through the regulatory barrier.
So many Chinese companies are currently operational all over the world with go-global strategy. They are making impact in terms of investment and infrastructure development. China is even taking over some of
Interests: A population of 1.3 billion along with a growing economy makes Chinese market extremely important for Google to enter