Feeding Globalization: Establishing an Independent Subsidiary Company in Far East

摘要

With an increasing market size in the Far East, a number of medium-sized companies are searching for their ideal strategy to establish themselves in East Asia. Not only because of the necessity to be close to the market, but also to exploit such advantages as shorter routes of transport for raw materials as well as the shorter supply chains for supplies. However, the difficulties of establishing and growing market share in East Asia are often underestimated and as a result have lead to many companies abandoning their projects. The underlying reasons for such situations can range from the problems in achieving international standards in quality through to cultural clashes. A promising approach to overcome some of the problems encountered is to establish a subsidiary in East Asia. In some instancesrnit is a necessity to overcome certain legal and business restrictions imposed on foreign companies. In 1996, the German company Oschatz opened up a representative office in Nanjing, China, followed by a trading house in Shanghai in 2003. In 2005, Oschatz eventually established a subsidiary in Nanjing. In this work the specific milestones are analyzed that develop successful market strategies with regard to establishing operations and doing business in East Asia.