Going Global with a View toward China: A case study

In Asia China, India, and Japan are the leading countries in the field of entrepreneurship and making great and faster changes in their economy and it due to dynamic and more active entrepreneurial young managers who are feeling their responsibilities. They are globally aware, have more and faster information about Internet, and better able to generate new and smart ideas.

In 1960, America’s trade with Asia was barely half of its trade with Western Europe. By 1986, trade with Asia eclipsed that with Europe, and the outlook for the 1960 is for double digit growth. Japan, Hong-Kong, Taiwan, and South Korea account for most of this growth, but the future may rest with trade inside the People’s Republic of China. Large Multinational Corporation represents a majority of entrepreneurs on both sides of export and import transactions.

One American entrepreneur who is benefiting from trade relations is Joseph Meringola, founder of medical Action Industries, Inc. Meringola started is venture in 1977 to supply a disposable gauze surgical pad to hospitals. With hospital costs increasing dramatically, small-ticket items like laps came under close scrutiny. The laps sold at about $60 for a case of hundred times when Meringola opened for business. He intended to best competitive prices by a few pennies establish a market and then expand into similar low cost items. He succeeded in reducing the price and it was only due to the China’s interest in trading with America.

The chief reason for price reduction is that nearly all these common suppliers are imported. Meringolahad succeeded because he seek out oversees sources particularly China for lower-cost items. He began in 1980 by working through a Chinese agent in New Jersey who had personal connections in China. The charter was settled in any way and both countries were agreed for trading at a large scale. The Chinese companies were enjoying an explosive growth in sales. Meringola started going himself to China in 1984. Where some more contracts was made with the Chinese government. In this way America started receiving higher-quality items from china and paid 50% profit.

The major advantage of this contract is that this industry has helped the China to purchase American Technology to improve the quality of production. Currently, MAI buys from eight largest Chinese companies, supplying more than 5 million lap sponges and nearly 3 million operating room towels to American hospitals each month. This business is expected to double before 2009, and China is considering what to do next? Arrangements are satisfactory now, but they would not be adequate for continued growth. For this purpose China need to chalk-out new plans carefully.