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Essay Details:
Essay text:
In a retrospective
commentary on what it describes as an “infatuation”
The
Economist
commented, “Few companies are stupid, but
many have behaved stupidly in China.”
1
Similarly, Harvard
economist Pankaj Ghemawat reflects that “companies routinely
exaggerate the attractiveness of foreign markets.”
2
Not
only have many foreign market investments proven unprofitable,
but many multinationals are now trimming back their
foreign investments. For many, this is an unprecedented
retrenchment in the previously uninterrupted internationalization
of their business.
How can such sophisticated companies make such a fundamental
error as misreading the size of a large market? It
must be acknowledged, of course, that the first phase of the
1...
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