Market Entry of Chinese New Energy Automobile Manufacturers in Cambodia

Few technology issues have received more global attention than the manufacturing of new energy vehicles in China. As customer awareness of the automobile sector increases and globalisation continues to grow, car manufacturers must identify the most appropriate means of entering the global market, in particular, as the choice of the entry method is affected by different internal and external factors, for instance, company objectives and government regulations. To that end, the current research investigates various market entry modes that the firms operating in the Chinese new energy automobile can employ to enter the Cambodian market. The methods include licensing, joint ventures, direct investment and exporting. The proposal identifies and elucidates the statement of the problem, objectives of the research, literature review, research questions and hypothesis, instrumentation, data analysis, and limitations.

Problem Statement

Many researchers, technology experts and environmentalists have paused to ponder the impact of new energy vehicles not only in China but also across the globe. However, no studies have been devoted to gain a keen understanding of the market entry strategies Chinese companies may employ as they seek to compete in foreign markets. As the competition in the global automobile industry continues to become stiffer due to advancement in technology, it is imperative to discuss different through which the Chinese firms may use to enter the Cambodian market. In addition to emphasizing exporting, licensing and joint venture, the corporations may use direct investment to enter the market to satisfy local customers’ needs and expectations (Durmaz & Tasdemir 2014, p. 47).

Research Objectives

• To review the current entry modes used by Chinese methods Chinese new energy automobile manufacturers to enter the global market.
• To develop an in-depth understanding of the most appropriate modes companies operating in the Chinese new energy automobile industry can use to enter the Cambodian market.
• To establish internal and external factors that affect the choice of entry methods.
• To determine how the choice of entry modes enables the companies to attain their organisational goals.

Significance of the Study

The research will offer an essential opportunity for Chinese new energy automobile manufacturers to advance their understanding of the most suitable strategies they can use to enter the Cambodian market. The selection of a particular approach or a combination of methods determines whether a company will attain its goals and objectives (Johnson & Tellis 2008, p. 2). Due to increasing business rivalry in the sector, the companies ought to accentuate entry methods that would enable them to enter and command the market. Since the Cambodian market abounds in the traditional fuel vehicles, the research will allow the firms to establish the entry techniques the firms can use to understand consumer behaviour and invest in promotional strategies that allow them to change customer perception, preference, and acceptable level.

Research Questions

i. What are the most appropriate entry strategies Chinese new energy automobile manufacturers can employ to enter the Cambodian market?

ii. What are the prevailing market factors that determine the choice of the entry modes?

Hypothesis

Alternative hypothesis (H1): Exporting, licensing, direct investment and joint venture enable Chinese new energy manufacturers to enter and command the Cambodian market.

Null hypothesis (H0): Exporting, licensing, direct investment and joint venture cannot enable Chinese new energy manufacturers to enter and command the Cambodian market.

Literature Review

Civic and Sinanagic (2014, p. 190) identify exporting, licensing, direct investment and joint venture as the mechanisms through which corporations expand into the international market. According to the authors, firms emphasize the exporting technique because they do not need to invest in foreign production facilities. The licensing strategy enables corporations to enter an international market whereby they charge a fee for the use of their property by companies in the target market. On the contrary, while direct investment allows companies to have direct ownership of production facilities in the target market, joint ventures involves several businesses combining their resources with the aim of selling products and services. Whereas Civic and Sinanagić (2014, p. 190) identify the various entry modes, they fail to elucidate the difficulty, and the problems companies encounter, in particular, when choosing a tactic that enables them to attain their strategic objectives.

According to Ravelomanana et al. (2015, p. 21), the decisions companies make regarding the mode of entry is based on the decision managers make concerning the most appropriate market to enter. As the authors note, the choice of market and entry strategy are closely connected because of varying factors that determine the attractiveness of particular markets. Ravelomanana et al. (2015, p.21) propound that the factors include government regulation and policies and prevailing competition in the foreign market. For these reasons, the authors hold the view that determining the most appropriate entry mode entails gaining a keen understanding of the different methods available and recognising the circumstances under which every strategy might prove more effective than others. In a similar vein, the authors note that organisational managers ought to evaluate internal factors, including company size and international experiences and external factors, for instance, market growth and size, and demand uncertainty.

Population and Sampling Technique

Organisational managers and employees of Chinese new vehicle automobile firms will serve as the population in the current research. The researcher will employ simple random sampling strategy to choose the members who will represent the whole population. The investigator emphasizes using the technique the method is unbiased and offers researchers a fair way to choose samples from large populations whereby every member has an equal opportunity of being selected (Elsayir 2014, p. 115). What is more, as opposed to other complicated sampling strategies, including stratified random sampling, simple random sampling is easy and simple to use because the investigator will not be required to divide the population into different sections or perform other extra steps before choosing the members.

Data Collection Methods

The researcher will gather research data using semi-structured interviews and questionnaires. The semi-structured interviews will comprise essential questions that will enable the investigator to define the areas to be examined and allow the interviewer to diverge to pursue a response or a subject in more detail. As Jamshed (2014, p. 87) asserts, the data collection tool enables researchers to comprehensively and systematically elaborate relevant information to respondents. Additionally, the investigator will use web-based questionnaires whereby the research participants will receive emails on which they would click on a link that redirects them to a secure website that contains research questions. The researcher will use this method to receive data from participants who cannot be reached physically due to long distance.

Data Analysis

The researcher will use content analysis method to analyse the data. The investigator will code the texts (interviews and questionnaires) or break them down into convenient groups, in particular, themes and then examine them using one type of content analysis; relational analysis or conceptual analysis. The investigator will then use the results to make inferences about the themes within the texts. The application of the approach will enable the researcher to explore societal trends, people’s perception and organisational behaviour regarding the use of the new energy vehicles in Cambodia. As Erlingsson and Brysiewicz (2017, p. 94) note, the investigator will use the method to systematically convert the texts into a succinct and organised summary of important findings. The approach will also allow the researcher to bridge purely qualitative and quantitative research methods.

Limitation

Although the research will achieve its aims, possible lack of previous studies on the subject will adversely affect the current research. Citing works by past researchers lays a solid foundation upon which literature review stands and enables a researcher to gain a richer understanding of the problem explored. In this case, however, few researchers have investigated the entry of Chinese firms into the Cambodian market. The potential lack of secondary data on the subject will deny the investigator an opportunity to examine critical subjects, including government regulation, customer preference, and behaviour. Furthermore, few researchers and experts have explored the manufacturing of new energy vehicles because it is a developing technology that is not widespread in many parts of the globe.

Timeline

Completion of literature review By June 2018

Completion of formal proposal By July 2018

Committee meeting to review the proposal The first week of August 2018

Conducting research Between August and November 2018

Preparation for final defence The first week of December 2018

Oral defence January 2019

References

Civic, B & Sinanagic, A 2014, ’Model of Entry on a Foreign Market and the Characteristics of the Assortment Offer of Furniture Exporters from Bosnia and Herzegovina’, Research in World Economy, vol. 5, no. 2, pp. 189-197.

Durmaz, Y & Taşdemir, A 2014, ’ A Theoretical Approach to the Methods Introduction to International Markets’, International Journal of Business and Social Science, vol. 5, no. 6, pp. 47-54.

Elyasir, HA 2014, ’ Comparison of precision of systematic sampling with some other probability samplings’, American Journal of Theoretical and Applied Statistics, vol. 3, no. 4, pp. 111-116. doi: 10.11648/j.ajtas.20140304.16

Erlingsson, C & Brysiewicz, P 2017, ’ A hands-on guide to doing content analysis’, African Journal of Emergency Medicine, vol. 7, pp. 93-99.

Jamshed, S 2014, ’Qualitative Research Method‑interviewing and Observation’, Journal of Basic and Clinical Pharmacy, vol. 5, no. 4, pp. 87-88. Doi: 10.4103/0976-0105.141942

Johnson, J & Tellis, GJ 2008, ’Drivers of Success for Market Entry into China and

India’, Journal of Marketing, vol. 72, pp. 1-13.

Ravelomanana, F, Yan, L, Mahazomanana, C & Miarisoa, LP 2015, ’The External and Internal Factors That Influence the Choice of Foreign Entry Modes at Wuhan Iron and Steel Corporation’, Open Journal of Business and Management, vol 3, pp.  20-29. doi: 10.4236/ojbm.2015.31003