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    E-Commerce and the Chinese Market

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    Part 1
    Despite the difficulties, many technology companies experienced when the dot-com bubble burst - Internet commerce (e-business) is here to stay. What resources does an International Internet retailer need other than merely a storefront on the Internet? Does it require fewer physical, financial, and human resources than a traditional retailer, or just as many? Explain.

    Use the Library search engines and resources to research one of the following companies (Yahoo, Google, EBay, AOL, or other internet companies you may be aware of) and explain why it is so successful despite the failures of other dot.com organizations. Explain what you think made this company so successful.

    Part 2
    For many global companies, China represents a very attractive market in terms of size and growth rate. Yet, it ranks lower in terms of economic freedom and higher in political risk than other country markets because it has a communist government. Despite these risks, Volkswagen, Isuzu, and Boeing are just a few of the hundreds of companies that have established manufacturing operations in China. This is due in large part to the Chinese government making sales in China contingent on a company's willingness to locate production there. The government wants Chinese companies to learn modern management skills from non-Chinese companies and acquire technology. Some observers believe that when Western companies agree to such conditions, they are bargaining away important industry knowledge in exchange for sales today. Should Boeing and other companies go along with China's terms, or should they risk losing sales by refusing to transfer technology?

    Part 3
    Small companies typically have difficulty competing against large multinationals when their governments take part in regional trade blocs. What could governments do to help their small companies compete after the formation of such blocs?

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    Solution Preview


    The International Internet retailer needs as much physical financial, and human resources as the size of his business. The requirements depend on the turnover of the business and the scale of operations. Companies like Yahoo, Google, eBay, AOL and other internet companies have physical, financial and human resources far greater than that of most traditional retailers. Consider the example of Amazon.com its physical, financial and human resources are far greater than those of most traditional retailers.

    One company that did not go bust during the dot.com burst was Amazon.com. The company survived because it kept its costs at a low level and it steadily increased its customer base through competitive prices. This was a rare combination. The other dot.com companies went bust because they had ...