Market entry patterns of Finnish SMEs entering China

In 2011 China became the world’s second largest economy overtaking Japan. With its rapidly growing middle class buying diverse goods from consumption products to sophisticated technology and luxury products, it is also the fastest growing export market in the world. The purpose of this study is to examine what types of market entry modes Finnish SMEs use in China, which factors affect on their decisions and whether they have switched or combined the strategies after entering China. The goal is to understand the relevance of the entry mode choice related to the internationalization process and to evaluate how well it suits the Chinese business environment. The empirical part of the study is a semi structured qualitative analysis of six case companies that represent different industry fields. The cases were selected based on the recent literature about the Finnish industry fields China is interested in to gain knowledge and expertise from. Companies included in the study are an architect office, two pharmaceutical development companies, an ICT company, a plastic mechanics company and a clean tech company. The results of this study indicated that the market entry patterns of Finnish SMEs in China differ from each other based on the factors related to company’s background, mode concerns and Chinese market influences.

Entry Modes of Finnish Food Enterprises in Chinese Market

China’s phenomenal economic growth and social development have brought along interesting opportunities for Finnish companies. One intriguing sector offering significant growth potential is the food industry. Due to the local food safety issues, rising disposable income level and changing consumer habits, the demand for foreign food is increasing. Finnish food companies have much to offer in terms of high quality, food safety in production, technological development and innovation. The purpose of this study is to examine how the Finnish food enterprises choose their entry modes in the Chinese market. This study increases understanding of entry modes the Finnish companies can use to successfully enter the unpredictable market of China in the food industry context. The study examines the industry specific challenges and the possible solutions to them. Qualitative research is selected as research methodology for this study because the intention is to understand the reasons behind the Finnish food enterprises’ entry mode choices in the Chinese market. The study is conducted as a qualitative case analysis. Six Finnish case companies operating in the food industry were interviewed. The results of the research indicate that most of the food industry companies use exporting as their entry mode to China; only one case company used an investment mode. This study illustrates the significance of the factors related to company’s background, mode concerns and Chinese market influences in the entry mode choice.