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In addition to competition from rivals such as Didi, Uber China also faced a liability of foreignness. Which of the following best explains the inherent disadvantage that foreign firms such as Uber China experience in host countries because of their nonnative status?

a) Cultural integration challenges
b) Local government support
c) Established market dominance
d) Strategic alliances

User Smartsanja
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Final answer:

The inherent disadvantage experienced by Uber China is primarily due to cultural integration challenges, as understanding and adapting to local business norms, practices, and networks like guanxi are crucial for foreign companies operating in China.

Step-by-step explanation:

In the case of Uber China's challenges in competing with rivals like Didi, the best explanation for the inherent disadvantage that foreign firms such as Uber China experience due to their nonnative status is a) Cultural integration challenges. This refers to the difficulties a foreign company may encounter when trying to adapt to the local culture, business practices, laws, and consumer preferences. Companies like Uber may also struggle with the complexity of establishing a local presence, understanding and building guanxi—the system of social networks and influential relationships that facilitate business and other dealings in China—which is crucial for succeeding in the Chinese market.

Rivalry with established local competitors and navigating the liability of foreignness are key factors affecting foreign firms. Creation of strategic alliances might sometimes help mitigate these challenges, but often the cultural integration and understanding of local norms and values are at the essence of successful market penetration.

User Michael Ambrus
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