https://www.mdu.se/

The Bachelor Thesis which was conducted during the spring of 2011 describes and compares Bombardier PPC, Ericsson, Scania and SKF’s expansion strategies in China. To find out how and why the Swedish related engineering companies expands in China, new models à la Rune & Sadegh (2005) and a complementary expansion model has been developed, The Expansion Ladder. The main conclusions are as follows: The Chinese market is still important for engineering companies because of its size, its players, the growth of the country and the low production costs.

- Bombardier PPC, Ericsson, Scania and SKF are currently expanding or appearing on the Chinese market because of cost- and competition-driven reasons.

- Michael Porter's differentiation and segmentation strategies are being used; however, the Uppsala model by Johansson & Weidersheim and Johansson & Vahlne is not relevant for these companies expansion.

- The willingness to adapt and corporate control are significant factors for expansion on the Chinese market.

- Joint Venture is the most common way to start production in China.

- Three of the companies have made use of representative offices and agents to break into the Chinese market. The companies were asked by authorities to move to a JV-cooperation, however, Scania chose to remain with their representations offices. Bombardier PPC became established with the help of a JV and followed the same strategy as Ericsson and SKF, and began to expand with JV:s and WFOE:s.

- Scania has plans to expand in China in the future. SKF expands in China today. Bombardier PPC and Ericsson is focusing on retaining their current position on the Chinese market.

- In the future it is expected for Swedish engineering companies to export greater amounts of their Chinese produced products to the rest of the world.

Research questions:   What are the brand images and brand identities of Renault Trucks, Novembal/Tetra Pak and IKEA? Is there a brand gap? How does country-of-origin have an effect on the perception of the brands? How does the respondent’s sex have an importance in the perception of the brand and the effect of country-of-origin?

Purpose:   The purpose of this thesis is to describe, compare and analyze the existence of brand gaps and the effect of country-of-origin with the final intention to provide management recommendations for the studied companies.

Method:   A quantitative consumer survey of 42 subjects was collected and analyzed. In addition, interviews were conducted with three Swedish companies, as well as an interview with the Swedish Chamber of Commerce in Lyon. Aaker’s (1997) Big Five model was used in the analysis.

Conclusions:    The study demonstrated the brand identities and brand images of the companies. A brand gap is widely present. Aaker’s (1997) model had to be modified and includes new dimensions and traits. Country-of-origin (COO) plays a role in 100% of the consumers’ perception and purchasing process. COO bias, ethnocentrism and animosity are present and play a role in the 42 consumers’ attitudes and purchase decisions in Rhone-Alps. Men      and women have different attitudes and degree of ethnocentrism towards the effect of country-of-origin (COE).