China’s Market Segmentation and the Role of Enterprise Capabilities, Managerial Cognition, and Geographic Diversification

Abstract

The pace of multinational companies entering the Chinese market has significantly accelerated since the turn of the century, especially after China joined the WTO, and the quantity and caliber of multinational companies entering China have both significantly increased. specifically, the following two aspects show this: First, multinational corporations now include China as a key component of their overall strategic plans rather than just analyzing the Chinese market from a production or sales perspective. An empirical investigation of the relationship between managers’ views and the degree of geographic diversity shows that managers’ optimistic descriptions of market segmentation have a significant positive impact on both the depth and breadth of regional diversifi cation. However, managers’ determinable interpretations of market segmentation have no impact on the scope and variety of regional diversity. Market segmentation has placed significant restrictions on China’s enormous domestic market, forcing Chinese companies to export low-end goods to other countries. MNCs control significant segments of the domestic market.