Research On Localization Strategy Of Enterprise R In China Market

In recent10years, extraordinary high speed development occurs in china constructionmarket. In this fast growing market, the requirement of the construction machinery is alsolarge. Hence, as a crucial component of those machineries, hydraulic components are also ingreat demand.As the quality and technical requirement of the hydraulic components in constructionmachinery is high, and the technical level of china industry is low. Since the reform and openof china in1978, the Chinese construction machines OEM is largely depend on several importhydraulic vendor, which formed a typical seller’s market. In21stcentury, other competitors ofhydraulic components in global market start to start their business on china market, besideslocal producer has a more stable quality, and customer start to understand the know-how ofhydraulic system. The market start to transform from seller market to buyer market. To meetthe environment change and purchase a higher profit, hydraulic components suppliers arestarted their localization in china.Company R as one of the most successful hydraulic suppliers in the world. Started toenter china market ever since1978and start their business, and within20years, they started tobuild up2major factory but the localization level is still low. To meet the requirement of themarket, Company R started to go real localization steps in2000and further steps in2008.Which helped company R to gained a large market potential. But since the2ndhalf of2011,the construction market started going down, problems of Company R’s business andlocalization are coming out of water.This paper is to introduce Company R the business situation before and after thelocalization. And use different factions to research on company R’s localization base on theenvironment change, to show the reason of success and analyze the facts. In the end give aconclusion of its localization and further development propose.