DocumentCode
115105
Title
How can foreign multinationals respond to the complexity of design piracy in China?
Author
Prabhu, Ganesh N.
Author_Institution
Indian Inst. of Manage. Bangalore, Bangalore, India
fYear
2014
fDate
27-31 July 2014
Firstpage
1729
Lastpage
1737
Abstract
Design piracy is potentially lethal for foreign multinationals making products in China, as high cost designs gets pirated with low manufacturing costs at acceptable quality for low priced sales in China and abroad. Two common options of dealing with piracy are protect and encourage but neither effectively resolve this issue. We therefore suggest two distinct market options. The first option (labelled product enhancement) is to convert products through locally relevant redesign into significantly higher value products that address the small but high potential upper class Chinese who are less likely to seek pirated goods. The second option (labelled service enhancement) is to leverage local low cost services available in China to enhance their products by creating bespoke ethnic Chinese embellishments that appeal to upper-middle class Chinese customers and by creating stronger product-service combinations that lock in the customer. While these options do not prevent piracy, they lead to more China specific products that are less likely to be pirated into international markets. We illustrate how European furniture firm IKEA, can potentially adopt both these modes in combination to create a distinct market space in China, without compromising on their product designs or low cost business processes that are effective worldwide.
Keywords
costing; customer satisfaction; furniture industry; international trade; product design; China specific products; European furniture firm; IKEA; bespoke ethnic Chinese embellishments; design piracy complexity; foreign multinationals; high cost design; higher value products; international markets; labelled product enhancement; labelled service enhancement; locally relevant product redesign; low cost services; manufacturing costs; market options; market space; pirated goods; product-service combinations; upper-middle class Chinese customers; Abstracts; Complexity theory; Electronic mail; Europe; IEEE Potentials; Manufacturing; Roads;
fLanguage
English
Publisher
ieee
Conference_Titel
Management of Engineering & Technology (PICMET), 2014 Portland International Conference on
Conference_Location
Kanazawa
Type
conf
Filename
6921022
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