Digital Overcast

IBM 414 | Doing Business In: Hong Kong

Kien Lai | IBM 414 | 6/12/02 | California State Polytechnic University, Pomona

In order to sustain steady growth and remain competitive in the global economy, companies must enter into foreign markets as part of a long-term strategic plan. Having said that, however, companies entering into new markets must take into account social and political implications unique to every region. Issues dealing with, but not limited to, holistic inferences must be analyzed regarding cultural values, governmental structures, and economic conditions. With that in mind, I will be specifically focusing on doing business in Hong Kong and how applying these assessments are critical in entering the new market.

Hong Kong, who previously was under the control of the United Kingdom, has remained fairly autonomous under the current jurisdiction of the Republic of China, which has recently jointed the NATO alliance. Similar to the dense concentration of population and commercial activity in Los Angeles, Hong Kong is well established for its relatively small size. Also similar is Hong Kong being faced with the high cost of living as a result of prosperity due to their robust commercial activity. On the same token, the people of Hong Kong enjoy a comparatively high standard of living, having reasonable access to housing, education, communications, and public transportation. Highlighting these important points, a company must take into consideration all these variables before deciding on entering the new market.

Once the decision is made in entering the new market, securing suppliers, distributors, partners, and outlets are essential in gaining a foothold. Customary in Hong Kong as well as many other Asian countries is establishing a central network of relationships through the act of gift giving. According to Annamma Joy, associate professor of Concordia University, Montreal, Quebec, Canada (Article 1, 2001), the unspoken symbolic value steams from the gift being an extension of the giver and holds within it the person©s spiritual essence, which cannot be separated. It can also be said that the refusal of a gift by either party must be circumvent, as it constitutes as an insult and loss of face. The generosity of gift giving is set on the foundation of building loyalty, duty, and trust that further develops and strengthen the relationships. The added benefit of gift giving is becoming an ©insider©. Being considered an ©insider© gives the company greater access to services and higher-ranking business people that an outsider couldn©t utilize or have at their disposal (Article 1, 2001).

Hong Kong values group effort in contrast to the United States who is accustomed to individualistic practices. In accordance with social norms, Hong Kong©s consumers tend to operate more collectively in their approach (Article 2, 2000). Moreover, they are generally a high-context market, which is important to know for any company doing business in Hong Kong. Provided with this wealth of knowledge, a company entering into the Hong Kong market can make changes to their product and marketing strategy to better serve its customers in the new market. Advertising campaigns would have to be modified to reflect a collective effort and content would be changed accordingly to communicate a high-context message.