Successful Entry Strategies on the Chinese Market : -A Case Study of a Swedish Industrial Company: SKF

Abstract: Nowadays, the Chinese market is attracting more and more attention from foreign countries, which consider China as a potential partner. Making feasible decisions is the foundation of accessing success in the Chinese markets. Thus, it is important to take the first step as choosing the entry strategies, and then analyzing the variety of social environment and economic circumstance. According to different situations, companies are required to prepare alternative strategies for the changeable markets. This is a case study of a Swedish industrial company- SKF, which entered into the Chinese market successfully. The purpose of this study is to analyze the strategies that SKF used during the process of entering the Chinese market, and find out the successful factors as well as the cause of failure. Our case study is aimed to provide an answer to the research questions and generate imitable entry strategies for western industrial companies who want to explore in the Chinese market. Our research questions are: Q1: What strategies have adopted by SKF and how these strategies worked out to enter into the Chinese market? Q2: What are the successful factors of industrial companies to enter the Chinese market? Two experienced product managers are invited to be the interviewee of our thesis. The collected data provided both Swedish and Chinese perspectives, which reflect the eastern western culture differences and concept differences. The results show that SKF made the acquaintance with big customers through distributors, which built up the customers’ network and company’s foundation at the early age of the expansion. However, failing experience of joint venture gave a lesson to SKF and encouraged SKF to work with independent consultant firms, which occurred to be an alternative solution to replace the position of joint venture. Although there are different perspectives from Swedish side and Chinese side, the successful factors have been concluded as unique products, marketing demands, communication and customers. The implication of this case study is to provide the strategies that contribute SKF to be the leaders in bearing industry, which is worth to be learned and imitated by other similar industrial companies.