International Business Environment

Indeed, because in the country there is still no clear distinction between the public and the private sector (at least referring to the commercial activities) and the former constantly involves in the initiatives of the latter, the provision of funds for the development of a strong commercial sector is considered to be of crucial importance for the improvement of the position (mostly from a financial and administrative aspect) of private enterprises across the country. Today the foreign direct investment in China is appropriately supported by the Government that has alternated the country’s existed commercial and financial framework in order to attract foreign investors, an initiative that has been strongly appreciated by foreign entrepreneurs (see also Figure 2, Appendix section). Under these terms, the chances for growth offered to foreign enterprises that enter the Chinese market are many. In the case of the GermanElectrics (the firm, the potential growth of which in the Chinese market is examined in the current paper) the entrance in China could be possibly related to the improvement of the firm’s profitability. However, it would be necessary that the firm’s existed strategies are thoroughly reviewed in accordance with the demands of the international marketplace.The operation of firms within the international market has been extensively examined in the literature and the empirical research. The increase of competition and the radical development of technology are two issues of significant importance for firms worldwide. Towards this direction, it is supported by Douglas et al. (1989, 437) that ‘recent years have witnessed a growing intensity of competition in virtually all areas of business, whether at home or abroad, in markets upstream for raw materials, components, supplies, capital and technology as well as in markets downstream for consumer goods and services’.