Use examples to discuss the different capabilities needed by foreign companies to be successful in China.

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General Management

Use examples to discuss the different capabilities needed byforeign companies to be successful in China.

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Caterpillar the world leader in construction equipment is having trouble making deeper tracks in China The USbased manufacturer of tractors backhoes road graders and other devices began selling equipment in China in 1975 a year before the death of Chairman Mao As the Chinese government invested massively in infrastructure Caterpillar helped pave the way literally for economic growth and modernization in the worlds fastestgrowing market for construction equipment Like many foreign players in any number of industries Caterpillar got its start in China by selling goods to the Chinese governmentthe only possible customer before the era of economic reformand then began selling highquality equipment to the private sector as a premium segment of the market emerged But it never broadened its focus to include other segments and by the early 2000s Komatsu Hitachi Daewoo and other competitors from Japan and Korea were in the middle market with tools and equipment that cost less but were still reliable Meanwhile a tranche of local manufacturers that had previously been focused only on the low end of the market were burrowing up to battle the established players designing and releasing their own products targeted squarely at middlemarket consumers As the experiences of Caterpillar and other multinationals suggest a critical new battleground is emerging for companies seeking to establish sustain or expand their presence in China Its the See Answer

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