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Master Thesis the Journey to Re-Enter the Chinese Market A MSc International Marketing and Management & Business Language and Culture Master Thesis The Journey to Re-Enter the Chinese Market A Google Case Date of hand-in: May, 15 2019 Supervisor: Manisha Bachheti Authors: Peng Lu (122770) & Saber Mejaat (115678) Characters including spaces: 123,502 Thesis Pages – Total Pages: 85 – 117 Acknowledgment We want to thank several people without this thesis would not have been possible. We are incredibly grateful for their support and help. First, we would like to thank our supervisor, Manisha Bachheti. We appreciate all the help and support as well as the critical perspective, which helped us to generate this thesis. Thanks to our meeting with you we have been able to broaden our perspectives. We are genuinely grateful to have you as our supervisor, and we appreciate all your pieces of advice. Secondly, we would like to thank Dr Chris Su. We acknowledge your additional support a lot. Based on your broad knowledge about academic working, you helped to guide us through the data analysis and gave valuable information and insight. Thirdly to the Professor Yizhou Yuan and its students that helped us from China, and all the people in China that responded to both our surveys. Lastly, we would like to express our very heartfelt thanks to our family for always supporting us in the pursuit of our studies, as well as our friends from Glostervej who helped us by sharing their insights on the project. Thank you! Peng & Saber 2 Abstract With the failure of complying with institutions, Google exited the Chinese market in 2010. To re-enter this potential biggest market, Google launched the Dragonfly project in 2018, a search engine that is compatible with the Chinese government’s censorship. The purpose of the study is to initiate strategies in terms of marketing, institutions and culture for its re-entry to the fierce competition of the technological environment and to investigate into the issue from consumers’ perspective. Presumably, millions of Chinese internet users vary in terms of awareness and attitude towards Google’s re-entry. This study explores the proper position for Google to cope with institutions and competitions in China’s business and culture context. It is specifically a case study of Google based on two surveys’ results from potential consumers of specific age ranges. The primary data from the survey demonstrates respondents’ searching engine using behavior and the existence of an information gap between the accessible information and desired information. Additionally, a certain percentage of respondents maintain a neutral or negative stance towards censorship and Google’s cultural impact. An analysis is further conducted to analyze how Google could collaborate with mobile phone producers, cope with institution systems and adapt to local culture. Therefore, by working with potential partners and adapting its offer to the market, the company might be able to succeed in starting again to re-enter the Chinese market. However, applying all these principles require both excellent timing and a great understanding of the market, as well as an exceptional relationship with the local institutions. 3 Table of Contents Acknowledgment ....................................................................................................................... 2 Abstract ...................................................................................................................................... 3 1. Introduction ........................................................................................................................ 7 1.1 China as an ex-emerging market ................................................................................. 7 1.2 History of Google in China .............................................................................................. 8 1.3 Current Situation .............................................................................................................. 9 1.4 Problem Formulation................................................................................................. 11 2. Background ...................................................................................................................... 12 3. Literature review .................................................................................................................. 13 3.1 Institutions...................................................................................................................... 13 3.2 Business and culture ...................................................................................................... 14 3.3 Organizational culture .................................................................................................... 15 3.4 Culture in the Glocalization process .............................................................................. 16 3.5 International marketing in the emerging economy ........................................................ 17 4. Methodology ........................................................................................................................ 19 4.1 Research Process ............................................................................................................ 19 4.1.1 Research Philosophy ............................................................................................... 20 4.1.2 Research Approach ................................................................................................. 21 4.1.3 Research Purpose .................................................................................................... 22 4.1.4 Research Strategy.................................................................................................... 23 4.1.5 Methods choice ....................................................................................................... 24 4.1.6 Time Horizon .......................................................................................................... 25 4.2 Survey ............................................................................................................................ 26 4.2.1 Search engine Gap questionnaire ............................................................................ 27 4.2.2 Chinese cultural reflection questionnaire................................................................ 27 4 4.3 Frameworks and Theory ................................................................................................ 27 5. Data Analysis ....................................................................................................................... 33 5.1 Search Engine Gap Questionnaire ................................................................................. 33 5.1.1 The variety of searching engine choices ................................................................. 41 5.1.2 Preference reasons for chosen searching engines ................................................... 42 5.1.3 Evaluation of chosen searching engines ................................................................. 44 5.1.4 Attitude towards Google’s re-entry ........................................................................ 46 5.1.5 The niche information gap ...................................................................................... 47 5.1.6 Overall Correlation analysis ................................................................................... 49 5.2 Chinese culture reflection questionnaire ........................................................................ 52 5.2.1 Age and variety of choices ...................................................................................... 53 5.2.2 Cultural opportunities ............................................................................................. 55 5.2.3 Cultural threat ......................................................................................................... 56 6. Market, Institution and Cultural Analysis ........................................................................ 57 6.1Market Analysis .............................................................................................................. 57 6.1.1 Market Positioning .................................................................................................. 57 6.1.2 The Competitive Forces in Chinese Search Engine Market ................................... 57 6.1.3 CAGE Distance framework .................................................................................... 59 6.1.4 Marketing Strategy.................................................................................................. 61 6.2 Institutional Void in China............................................................................................. 63 6.3 The extent standardization vs. adaptation with respect to 4 P’s .................................... 65 6.3.1 Uber: Standardize instead of adapting to local needs ............................................. 65 6.3.2 Google’s Standardization and adaption based on 4Ps ............................................ 66 6.4 AAA Triangle ................................................................................................................ 68 7. Discussion ............................................................................................................................ 70 5 7.1 Survey analysis discussion ............................................................................................
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