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Extending the Service Business in China? Experience of Swiss Companies

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abstract Few Chinese subsidiaries of Swiss manufacturing companies are reported as making profits. Our analysis indicates five main difficulties: strong competition, cultural differences, establishing a profitable service business, availability and education of Chinese workers and managers, and differing goals among collaborating partners. The existing literature is very profuse when it comes to explaining the rising competition in the Chinese market, the cultural problems between western and Chinese managers, and the availability and education of Chinese workers and managers. However, there seems to be a lack of discussion on the challenges and guidelines for extending the service business in China are concerned. Swiss companies generate a major share of total revenue through the service business. In Europe they earn 23.2 per cent of total revenue through services, while their Chinese subsidiaries achieve only 10.3 per cent. The main reason stems from problems associated with managing the service business in the context of Chinese culture. We analyse these effects and offer some guidance on increasing service profitability.
   
type journal paper
   
keywords
   
language English
kind of paper journal article
date of appearance 5-2-2007
journal Singapore Management Review
publisher Singapore Institut of Managemen (Singapore)
ISSN 0129-5977
volume of journal 29
number of issue 1
page(s) 59-72
review blind review
   
citation Gebauer, H. (2007). Extending the Service Business in China? Experience of Swiss Companies. Singapore Management Review, 29(1), 59-72.