If China became the largest world economy by 2020 the world trading system would change. China’s entry …show more content…
One thing that might occur is that businesses might attempt to move more of their operations to china. This was the case with IBM in 2006 the large company moved it global procurement headquarters from Somers in New York State to China just across the border from Hong Kong (Tse, 2012). This was the first time any of IBM’s core operation left the United States and could be a sign of things to come as more United States based companies realize the value of having operations in China. While entering China might sound appealing companies must be careful when entering China. Companies must be willing to overcome what is known as barrier of entry. Barriers of entry could be defined as high startup cost or other obstacles that would prevent new companies from easily entering an industry or area. These barriers will be a point of intrest for any company thinking of making the trip to China. Anthoer issue in making the move to China would be the different culture that exist in foreign markets. Whether attempting to introduce product or headquarters into a new markets companies must tread lightly. Two examples of this can be seen with the different methods taken by Kraft food and Intuit. When Kraft foods wanted to introduce their product into China they reengineered their famous Oreo and Tang brand because they understood that