SHERMAN COCHRAN

Between 1895 and 1937, Shanghai attracted sojourning capitalists
from abroad and from all regions of China, and it served as headquarters
for almost all China's foreign-owned long-distance trading firms as well
as many Chinese-owned ones. The aim of this chapter is to characterize
these sojourning big businesses and analyze their approaches to
Shanghai's market. To achieve this aim, it focuses on firms marketing
one commodity, matches, and in particular on three such businesses, all
of them commercial giants: Japan's largest marketing firm, Mitsui Trad-
ing Company (Mitsui Bussan Kaisha), the West's and the world's largest
match manufacturer, Swedish Match Company (Svenska Tändsticks
Aktiebolaget); and China's leading match producer and distributor, China
Match Company (Da Zhonghua huochai gongsi).

These three large corporations were alike in that they all set up head-
quarters for China in Shanghai and used Shanghai as a base for long-
distance trade in the early twentieth century, but each adopted a different
strategy to control the market in Shanghai and other Chinese cities. Was
the approach used by each one illustrative of a national or cultural style
of business behavior? That is, did Mitsui Bussan conform to a "Japanese
model," Swedish Match to a "Western model," and China Match to a
"Chinese model" of business organization and strategy? Or did these
three companies depart from the usual patterns and behave in a manner
reflecting the special character of Shanghai? Of the three, why did the
Chinese firm have greater success in Shanghai than its larger and more
internationally influential foreign rivals? This chapter explores these
questions by characterizing each of the three businesses in relation to a
different model.

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