Opportunities and threats analysis for European born global companies on the Chinese market

Abstract

Companies which do not follow traditional internationalization path, but start international activities immediately after their founding, are called born global companies in the international literature. This relatively new type of international entrepreneurship can be challenging due to limited international experience and lack of resources. It seems even more diffi cult to internationalize a venture directly from Europe to the Chinese market. The purpose of the paper is to analyze potential opportunities and threats for European born globals entering the Chinese market. The study shows that the main opportunities provided by the Chinese market are: its size, rapid growth (which is, however, slowing down), increasing consumer middle class, modern infrastructure, cheap workforce supply, improvement in workforce qualifi cations and political stability. Unfortunately, there are also some threats of rapid internationalization in the Chinese market which are caused by cultural, social and political differences. The main threats of the Chinese market are: rising costs, slowing market growth, increasing competition, HR problems, dumping, protectionism and legal issues (including intellectual property rights, corruption, lack of transparency, certifi cation and requirements concerning technical norms).