In China a tough competition in the mobile-phone business has evolved between western-like global operating companies and domestic chinese telecommunication companies. The battle is about market shares in the rapidly growing market of mobile phones in the PRC. Mobile phones, or in chinese “Shouji”1, become increasingly popula r, especially in the so-called boom-areas where mobile phones have become a status symbol like in other western countries so that people own 2 or 3 or even more mobiles whereas in rural areas the development of mobile communication networks still goes ofte n against zero. The purpose of this essay is to show up some facts about the PRC´s telecommunication market, to introduce the reader to the most important foreign and domestic companies doing business in this market, to show up the current situation of both types of companies in China, and to analyse some reasons for the recent market development. Claas Bartels, Holger Wenk and Michael Mahlich are alltogether students at the Business Faculty of the “University of Applied Sciences and Arts” in Hildesheim, Germany, studying the field Business and Administration with specialisation in Controlling, Finance, Accounting, Taxation, IT and International Business. 1 A mixture of the chinese characters for „hand“ and „device“
Table of Contents
A. Introduction
The authors and purpose of this essay
B. The PRC´s telecommunication market
1. The growth of mobile phone users
2. The telecom industry as a part of the GDP
C. The companies in the chinese telecommunication market
1. Foreign companies in the chinese market
(a) Siemens
(b) Nokia
(c) Motorola
2. Domestic chinese companies in the market
(a) Ningbo Bird
(b) TCL
(c) Haier
D. Market development, strategies and the future perspective
1. Current development in the PRC´s mobile-phone market
2. The market strategies
3. The future perspective
Objectives and Core Themes
The primary objective of this paper is to examine the evolving competitive landscape of the mobile phone market in the People's Republic of China, specifically focusing on the struggle for market share between established foreign corporations and rising domestic manufacturers.
- Growth dynamics of mobile phone adoption in China.
- Comparative analysis of foreign market leaders (Siemens, Nokia, Motorola).
- Strategic assessment of domestic manufacturers (Ningbo Bird, TCL, Haier).
- Impact of Chinese government policy on import substitution.
- Future perspectives and competitive challenges in rural versus urban markets.
Excerpt from the Book
2. The market strategies
The main question is, how could the chinese mobile-phone manufacturers gain so much market share in such a few time. The answer to this question can be found in the strategies of the government on the one hand, and on the other hand in the companies´ strategies.
The chinese government is focussing on import substitution. This can be seen very clearly in their early promotion of western know-how inflow and rapidly adapting it, copying products and setting up an own domestic industry. But not every company is allowed to be a mobile-phone producer. A certain government program is about supporting maybe very succesful manufacturers of household appliances in the way that the government issues a licence to this company, and only with such a licence companies are allowed to move in the field of mobile-phone production.
Similar developments can be seen in the automotive industry. Since for instance german car manufacturers were setting up production plants in the PRC, many domestic car producers come up with more and more similar products to the originally german ones. So there is obviously a threat of “stealing” know-how and “excluding” foreign companies from the domestic market.
Summary of Chapters
A. Introduction: The authors outline the purpose of the essay, which is to analyze the competitive dynamics between international and domestic telecommunication companies in the Chinese market.
B. The PRC´s telecommunication market: This section details the rapid expansion of mobile phone users and examines the significant contribution of the telecommunications industry to China's GDP.
C. The companies in the chinese telecommunication market: The chapter provides a comprehensive overview of the key foreign players and the rising domestic manufacturers that are currently competing for market share.
D. Market development, strategies and the future perspective: This final chapter analyzes the shifts in market shares, the specific strategies employed by domestic firms to gain an edge, and the future challenges facing foreign manufacturers.
Keywords
Telecommunication, China, PRC, Mobile phone market, Market share, Domestic companies, Foreign companies, Siemens, Nokia, Motorola, Ningbo Bird, TCL, Haier, Import substitution, Market strategies
Frequently Asked Questions
What is the central focus of this research paper?
The paper examines the current developments and competitive landscape of the telecommunications market in the People's Republic of China, focusing on the competition between foreign and domestic firms.
What are the primary thematic areas covered in the study?
The study covers industry growth, company-specific profiles, government-led market strategies, and future challenges for global companies in the Chinese market.
What is the main objective of this study?
The goal is to identify why domestic Chinese mobile phone manufacturers have successfully gained significant market share from established foreign competitors.
Which methodology is applied in this analysis?
The authors provide a comparative market analysis based on company data, industry trends, and an evaluation of strategic business practices within the PRC.
What topics are explored in the main body of the text?
The main body covers market growth statistics, individual profiles of foreign and domestic companies, and an analysis of marketing and production strategies.
What key terms characterize the findings?
Key terms include market saturation, import substitution, distribution systems, and competitive edge in the mobile phone industry.
How has the market share shifted between 2002 and 2003?
The study notes a dramatic shift where the combined market share of Siemens, Nokia, and Motorola dropped significantly, while domestic brands like Ningbo Bird, TCL, and Haier saw substantial gains.
Why are foreign manufacturers struggling in the rural Chinese market?
Foreign firms often focus on high-end products and lack the effective, extensive distribution systems or local cultural adaptation required to reach conservative, price-sensitive consumers in rural areas.
- Quote paper
- Claas Bartels (Author), Michael Mahlich (Author), Holger Wenk (Author), 2003, Current developments of the telecommunication market in the People's Republic of China - domestic companies vs. foreign companies, Munich, GRIN Verlag, https://www.grin.com/document/38341
