How Kalmar Industries and Trelleborg AB develop their business in the emerging markets of China and Russia

Abstract: ABSTRACT Title: How Kalmar Industries and Trelleborg AB developed their business in the emerging markets of China and Russia Background and Purpose: The world is becoming more global and companies are quick to grab hold of this opportunity to internationalize and expand into emerging markets. The emerging markets studied in this paper are China and Russia, which boast growing economics, large sources of labor, and are reportedly highly corrupt. The research for this paper focuses on Kalmar Industries – a leading supplier of cargo handling equipment to ports, terminals, and Trelleborg AB Fluid Systems – an industrial company that sells industrial hose and other industrial rubber components. Both companies have entered the markets of China and Russia and are presently expanding operations there. This paper’s aim is to get a better insight into how they entered these emerging markets and what difficulties they have faced developing in these markets. Method: A survey was sent in advance to potential interviewees working closely with the subject markets. The authors then followed up with interviews, phone interviews, and emailed responses. Theory: Market entry strategies, framework for integrated risk management in international business, international risk perception and mode of entry, two dimensions of corruption, and relationship marketing Findings and Conclusion: Both Kalmar Industries and Trelleborg AB Fluid Systems entered the market through exportation and have gradually increased investments in these markets. Both have experienced challenges in these markets mostly due to government policies and other general risks associated with entering into foreign markets. Although corruption is present in China and Russia, neither company feels that it affects the way they do business. In spite of the risks, both companies feel the benefits outweigh the drawbacks and they plan to continue growing in these markets.