Silicon Valley Firms' Operational Tactics and Venture Performance in Greater China

Business Forum, Summer-Fall, 1999 by Mark V. Cannice, John D. Daniels

4. Documentation -- Company internal administrative notes and outside newspaper articles. (These data mainly serve to corroborate and augment evidence from other sources).

Although much of the theory extension and model adaptation is based on the open-ended discussions with executives from the participating companies, the remarks are validated with structured survey rating questions on many of the same topics. Further, archival records, other documentation, and direct observation are used to triangulate on what appear to be the most important issues to the operating mode decision and venture performance.

The final target sample includes firms from the computer/integrated circuit, telecommunications, and medical equipment industries. All the firms are "high-tech" manufacturers/developers. The range of investment sites studied included those in China, Hong Kong, and Taiwan.

Data Analysis

The multiple-case process is performed to provide a more holistic understanding of the market entry decision and its link to performance as well as the supporting strategies and tactics taken by the firms in this sample. Analysis proceeded with the strategy asserted by researchers R.K. Yin and K.M. Eisenhardt respectively. (27) That is, the theoretical framework and propositions were used to guide the data analysis, and (using each case description) to allow more insights to emerge. Within-case analysis is completed by writing up a summary of each interview discussion, as well as the observations and analysis of the discussion. Pertinent background information from each company's annual reports, 10Ks, and press releases is also included in each case summary. Separate files for each company case are maintained and referred to when necessary for additional information. The purpose here is to become intimately familiar with each case as a stand alone entity. (28) This case database allows more coherent analysis and better access for replication or reanalysis, thus increasing the reliability of the findings. (29) Data (qualitative summary, questionnaire responses, and background information) from each company are then triangulated and summarized to a common format to better permit pattern matching to the theoretical template and cross case comparisons.

Findings

The main purpose of the investigation is to study the micro strategies and tactics that firms used in addition to their entry mode. Table Three describes the destination of investment for our sample firms.

The market entry modes represented in the sample are fairly diverse. The WOS (sales/service/liaison/hub) offices in the sample serve a variety of functions depending on the parent company's objective and host country constraints. For example, many of the WOS offices in China are liaison offices that cannot sell products directly, but can demonstrate and market their products and delegate sales to third party distributors, usually based in China or Hong Kong. These liaison offices are wholly-owned entities and require higher resource and control than strictly distributor relationships. Therefore, these are grouped with WOS (sales/service). One firm's subsidiary office serves as a regional hub to manage the distribution effort for the region. The balance of the WOS sales offices are typically staffed with between five and ten sales managers and field engineers. They often provide extensive service to regional clients and usually require substantial capital to set up and maintain. Overall, each of the subsidiar y offices are wholly controlled by the parent company and have little if any manufacturing capacity.