Resource-Based Transnational Growth Of China Tobacco Industrial Enterprises

Over the last twenty years, the total amount of taxes paid by tobacco industry ranks undoubtedly the first and therefore, tobacco industry has made a great contribution to China’s economy. It, on the one hand, serves well the public and on the other hand, it’s a typical state-owned monopoly industry, and its assets are state-owned assets. Therefore, tobacco industry plays an important role in economic stabilization and social development. In recent years, China’s tobacco industry is exposed to internal and external problems. Externally, the local industry is threatened by the entering of giant competitors abroad and by the smoking ban now and after. Internally, China’s “New Normal” economy brings the local tobacco industry a slowdown in general growth, an increase in inventories, a narrowing-down trend in structure space, and shrinks in overall demand. Being confronted with the serious problems and severe circumstances, China’s tobacco industry has to enter into the global markets in order to realize the sustainable development of itself.The theory of this paper is based on Penrose’s Firm Growing Theory, pointing out that a firm’s development relies on two sectors, the core layer which includes resources, knowledge and ability, and secondary layer which includes property right, strategy, management, culture and products. From that, we establish the TNF(transnational firms)’ growing theory, researching on what has caused the growing of transnational firms and how they grow themselves. We believe that it was because of the needs of accessing resources, lifting capability, and acquiring knowledge that transnational firms expand and develop internationally. In terms of the growing path of the transnational firms, in another word, how they grow, we have studied TNF(transnational firms)’s growing strategies and international market enter mode. At last we give examples of some typical TNFs with distinctions in resources, knowledge and ability, and their growing strategies and market enter mode.Secondly, this paper carries the empirical research on the global growth of China tobacco industry enterprise. Including the longitudinal comparison of China tobacco industry’s own history of growth and lateral comparison with four tobacco multinationals. From itself reform development course, China tobacco enterprise has experienced three stages: reform reorganization, decentralization interest stage(1982-1991), and merger restructuring, group operating stage(1992-2001) and business separation, specialization development stage(2002-now), and this stages have lay a good foundation for China tobacco Enterprise transnational growth, but currently the transnational growth mode of China tobacco enterprise is still relative single and typical features is to export mainly, strategy Union, the quickly development of new investment, and the capital operations such as Transnational mergers and acquisitions began to emerge. Then, from the empirical analysis confirms the scientificity of the expansion of resource-based multinational growth theory. Horizontal comparison, Philip Morris International, British American tobacco, Japan tobacco and Imperial Tobacco multinational growth paths have their own characteristics, and this enterprises have great inspiration for China tobacco industrial enterprise’s transnational growth path.Finally, starting from the reality, the article analyzes the world tobacco market pattern in several ways: the development situation of tobacco leaf and main tobacco products, the market share of the international tobacco giant as well as the development tendency of the world tobacco industry, and clarifies the external environment of Chinese tobacco enterprises’ international growth. Then, combined with the advantage resources and constraints of Chinese tobacco industry enterprises in the process of achieving transnational growth, this paper systematically puts forward the transnational growth path for Chinese tobacco industry enterprises by using the extended resource-based theory. From the point of growth strategy, Chinese tobacco industrial enterprises should persist the transnational growth strategy that turns specialization to multiplex, and integrates the level specialization expansion and the vertical integrated. From the point of market entry mode, Chinese tobacco industrial enterprises should enter the market with high concentration through cross-border mergers and acquisitions, access to the emerging market adopting the strategic alliance, and enter the market with strong market competitive abilities by Greenfield Investment, realizing the purpose of accessing resources, improving the knowledge and hoisting capacity in tandem. The scientific growth strategy and the differentiated market entry mode eventually promote the mutual improvement and integration of Chinese tobacco industrial enterprises’ resources, knowledge and ability, realizing the Chinese tobacco enterprises’ transnational growth well. Afterwards, based on property rights allocation, corporate governance, and the corporate culture training, the paper puts forward some safeguard measures for Chinese tobacco industrial enterprises to realize international growth smoothly.