KeywordsCand.merc.smc. Strategic Market Creation
MSc in Economics & Business Administration
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AbstractWestern multinationals, which venture into the vast Chinese market, encounter numerous challenges rooted in the very cultural and philosophical differences between East and West. As the importance of the Chinese market has been growing, it has become crucial for Western companies to achieve success in China in order to eventually establish themselves as true global players (Rugman and Verbeke 2004). In this regard, a novel notion of building a second home in China has been emerging, where western multinationals “treat” their second home with the same level of importance as their home market (Galvin, Hexter and Hirt 2010). Thus, the main research issue of this thesis is formulated around the construct of second-home and in particular second-home strategy in China, which as an emergent concept, needs to be further explored in order to establish its theoretical significance. In particular, the focus is on the possible aspects of a second-home strategy. The lack of existing theoretical framework sets the purpose of this study: to develop (or contribute to developing), rather than test a theory. Hence, I extensively draw on detailed descriptions and evidence from two case companies, Carlsberg and Grundfos, in search for elements, which remain constant across the cases (Sutton and Callahan 1987). In this process I rely heavily on primary and secondary sources of qualitative data, which is analyzed through techniques of within- and cross-case analyses. In the end a conceptual framework is developed, based on continuous comparison between case evidence and emerging theory. In short, I propose that a tentative construct of “second-home learning” during the exploration of local context causes strategic focus in five key aspects: new solutions, low-end exploration, distribution diversification, local talent in top management and shaping regulations, which could potentially constitute part of a second-home strategy. Second-home strategy leads to higher commitment and thus long-term success in the Chinese market. In broader aspect the insights integrate in the established literature on global, local pressures and worldwide learning (Barlett and Ghoshal 1998). In practice, the thesis refines the broad suggestions by Galvin, Hexter and Hirt (2010) on building a second home as strong as the home market.