Winning Strategies in China: Competitive Dynamics Between MNCs and Local Firms

Abstract

This paper presents frameworks about the competitive structure and dynamics between local and multinational firms in China. Based on an extensive fieldwork we identify technological complexity and market heterogeneity as important drivers that determine the nature and extent of competitive dynamics. Our framework illustrates different advantages and disadvantages of multinationals over local firms depending on the nature of competitive dynamics. We then discuss generic strategies for multinational firms and the ways to implement them in each competitive dimension. (C) 2011 Elsevier Ltd. All rights reserved.