Orit Gadiesh, Philip Leung, and Till Vestring(2007) The Battle for China’s Good-Enough Market

This is overview of Chinese market in the view of Multinationals. The conclusion is “company which wins in Chinese Good-Enough(=middle class)market, wins in the World”.

In Chinese market, there are three segments: Premium, Good-Enough, Low-End. Good-Enough means its products are reliable quality and low price. The market is difficult to catch up because it is changing rapidly. But it is growing now and its share was 62% in 2005. Multinationals in China usually positioned Premium, because there they could get high margin with their brands. And local companies positioned Good-Enough and Low-End, because they can produce at low cost. However, the situation is changing now. Chinese companies in Good-Enough position are becoming more and more sophisticated and will threaten global market with leverage of Good-Enough market. To maintain its position, multinationals have to enter Good-Enough market through developing lower producing and careful marketing or M&A.

(URL:http://www.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp;jsessionid=GRAPVRSH1BXZYAKRGWDR5VQBKE0YIISW?ml_action=get-article&articleID=R0709E&ml_page=1&ml_subscriber=true)