Chinese population is growingly shifting to urbanization and the inflow of global brands has exposed them to new trends and fashion statements from across the globe. The per capita incomes rise over the years also ensures a greater purchasing power in the hands of consumers. All this makes the Chinese market lucrative enough to enter.
A critical decision to be taken in respect to globalization is to whether to globalize the production or the market. For Nike, to set up a full production unit in china can be a risky proposition given, the high probability that the product design and concepts can be easily copied by the local manufacturers. This can not only hamper the growth prospects of the company but can also hamper its brand image. Also, consumers tend to have a stigma attached to the quality of Chinese products due to which they could perceive even Nike products to be of low quality. So, a production facility in China can downgrade the brand image of Nike globally. But, looking at the huge potential market it becomes essential for a brand like Nike to have its presence in the country. So, in this particular scenario, globalization of market should be considered as the best option. Given below is the analysis of various market entry options:-
Exporting is a very good option since Nike will be in a position to maintain its high quality standards and avoid the threat of copycats as well to a large extent. In addition to this, exit barriers will be low and it will be easier to exit the market at any point of time.