When entering an international market, it has become increasingly popular for companies to provide services as a transition into a new market (Ball, Geringer, Minor, & McNett, 2010). In early 2006, Google made a deal with the People’s Republic of China (PRC) to launch Google. cn, an indigenous version of the search engine run from within China. However, China’s Internet policies along with Google’s ineffective observations of market and cultural diversity hampered Google’s success.
This brief will address key questions of Google that led to their inability to successfully obtain China’s leading ISP market share. Before deciding to accept PRC’s censorship laws, Google should have questioned what they could do to avoid PRC regulations. The Great Firewall of China sanctions using the Internet to subvert state power, incite ethnic hatred, or encourage propaganda (MacLeod, 2006). Google’s mistake was they failed to realize the Great Firewall’s protection can be bypassed by establishing proxy servers outside of China or regional websites from within China.
Servers in Hong Kong or Macau would have been beneficial, as censorship is not imposed in these areas. They are recognized by international treaty and are not confined by laws restricting PRC propaganda (Internet Censorship in the People’s Republic of China, 2010). Secondly, Google should have asked what Chinese internet users value in technology. Google failed to realize that China’s approximately 140 million internet users actively engaged in e-commerce are a total market in itself. Instead of Google developing appropriate technology for China users, it integrated what worked in the U.
S. to China, which is a prime example of the self-reference criterion (Rein, 2007). The market in China is too big to consider it an auxiliary market, thus requiring new systems to be put in place to compete with Chinese internet firms, such as Baidu. One way to divert this problem was to determine what search engine features citizens were most interested in via surveying. Was Chinese character translation an important factor in why Chinese users neglected Google? No. It was information inaccessibility and lack of access to MP3 downloads more so than language or censorship.
Secondly, Google should have learned from its predecessor’s mistakes. Initially, MSN tried to enter the China market, censored their content to follow government restrictions, and were unsuccessful (Internet Censorship in the People’s Republic of China, 2010). Google’s management team should have questioned why those companies failed and what could Google do differently. One thing is Google could have used Foreign Direct Investment into Baidu, an established company in China. This would have provided Google with management control and the ability to override government sanctions and scrutiny.
Secondly, Google could have attacked Baidu’s domestic economy as Baidu shifts focus to international markets, as can still be accomplished. Concisely, Google should have initially invested in detailed cultural and government regulations research, considered FDI, and assessed content bypass control to become successful within China. Google should re-invent itself, learn from its mistakes, stop looking at the closed door, and start focusing on the opportunities ahead.
Works Cited Internet Censorship in the People’s Republic of China. (2010, October 5). Retrieved October 8, 2010, from Wikipedia: http://en. wikipedia. org/wiki/Internet_censorship_in_the_People’s_Republic_of_China Ball, D. , Geringer, J. M. , Minor, M. S. , & McNett, J. M. (2010). International Business: The Challenge of Global Competition. New York: McGraw-Hill Irwin. MacLeod, C. (2006, April 6). Web Users Walk Great Firewall of China; Internet Controls: Restricting Use or Protecting People? USA Today. Rein, S. (2007, February 5). Has Google Failed in China? Retrieved October 8, 2010, from Seeking Alpha: http://seekingalpha. com/article/26033-has-google-failed-in-china