ABSTRACT
The impact of Chinese markets for industrial goods on enterprise behavior and performance is best seen through case studies. The enterprise is slow to recognize that market conditions have changed; it may maintain an inward, technical orientation similar to the third response to a sellers’ market, or it may continue rapid expansion. A buyers' market, on the other hand, generates strong pressures for enterprises to respond in ways that are beneficial to the demand side. The crucial impact of market conditions on enterprise behavior is evident from the above typology. In fact, the average ratio of input inventories to sales for enterprises facing a buyers’ market was considerably higher than for firms facing a sellers’ market. Aside from the direct or indirect effects they may have on market conditions, technology and product characteristics constrain an enterprise’s response to market forces. The qualitative role of direct marketing also varied systematically with market conditions.
