doing biz in china sme
DESCRIPTION
Information to help SME's who may be thinking about looking at China as an opportunity to outsource, or to find partners to help them access the internal China market.TRANSCRIPT
“Doing Real Business in China”information for SME’s
Stuart Patton & Lee Styger
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About the Team
BLUE CHIP
START UP'S
BIZ DEVELOPMENT
ESTABLISHING STRATEGIC
PARTNERSHIPS / JV
EURO to CHINA
US to CHINA
TECH TRANSFER ASIA
SUPPLIER
MANAGEMENT
SOURCING
10 Yrs CHINA EXPERIENCE
STUART
PATTON
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CONNECT2.BIZ
About the Team
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START UP
INTERNATIONAL
BIZ DEVELOPMENT
GLOBAL PROJECT MANgTECH TRANSFERGLOBAL SUPPLY CHAIN DEV.
CHINA THREAT TO HK
IMPROVING HK COMPANIES96' GOV. CONSULTANCY
LEE
STYGERCONNECT2.BIZ
Macro View
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REPRESENTATION
/ACTIVITY
GOAL
OBJECTIVE
MISSION
Connect2
MACRO
view
CONNECT2.BIZ
Sectors
TECHNOLOGY
MANUFACTURING
CleanTech
EDUCATION
Connect2
sectors of
Business
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the burning issue
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China Touches Us All
You cannot ignore the critical mass of ChinaCHINA
and the fact
itTouches
allof
us - directly or indirectlySo if you’re an SME in business what do you do about
CHINA
CONNECT2.BIZ
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Don’t ignore your changing environment
“No, no, no - I can’t be bothered to see any crazy salesman - We’ve got a battle to fight!”
Sometimes you need to stop and look around to see what help is available to you
Take time to see who can help you
Take some time out to think about what strategy youmay develop, to ensure any effect from China on your business is
managed as a POSITIVE outcome and not a NEGATIVE outcome
Look around for help and advice, share knowledge and experience
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the overview
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China Macro
Population 1.3 BLabour force 800 M
GDP (PPP) $7.043 trillionGDP 11.4% (07) 9.8% (08)
Inflation 4.7% (07) 7% (08)Unemployment 4%
Exports $1.221 trillionImports $917.4 B
75,000 KM of Railway1,600,000 KM of Roads
467 Airports1,775 Registered ships
250 MInternet users....Internet
infrastructurecontinues to
grow at a fast pace
368 M main line phones480 M
Cell Phones
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CONNECT2.BIZ
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China Macro
GDP by SectorAgriculture 11.7%
Industry 49.2%Services 39.1%
Labour by OccupationAgriculture 43%
Industry 25%Services 32%
USA 21%
Japan 9.5%S.Korea 4.6%
HK 16%
Germany 4.2%
Export Partners
USA 7.5%
Japan 14.6%S.Korea 11.3%
Taiwan 10.9%
Germany 4.8%
Import Partners
CONNECT2.BIZ
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CHINA unlike any other Asian country can still backfill the low tech end because ofcritical mass of population
Technology
People Employed in the Process
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The Natural Evolution from Low Tech to Higher
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China Macro
CONNECT2.BIZ
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CHINA unlike any other Asian country can still backfill the low tech end because ofcritical mass of population
Technology
People Employed in the Process
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The Natural Evolution from Low Tech to Higher
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China Macro
CONNECT2.BIZ
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China Macro
The Coastalregions
have been the
firstto develop
FutureDevelopment
inland
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With a Pop. 110 M Guangdong is
madeup of
80M residents+
30M migrantworkers
By way of exampleGuangdong, the 1st region to open up, now has 21 Cities,
Guangzhou (16M ) andShenzhen (13M) being
the largest.
China Macro
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China Macro
UNDERSTANDING
KNOWLEDGE MANUFACTURER
EXPERIENCE
HANDS-ON
WHY
CONNECT2
CONNECT2.BIZ
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Matchmaking
SUPPLIER MATCHING
TYPICAL APPROACH….
MOST SERVICES WILL COMPARE YOUR NEEDS AGAINST A DATABASE
FIND YOU 3 POSSIBLE SUPPLIERS BY PHONE SEARCH
MAKE THE INTRODUCTION FOR YOU
THEN YOUR ON YOUR OWN………
WITH Connect2 WE WOULD INITIALLY HOLD A FACE TO FACE BIZ CLINIC
CONFIRM YOUR DETAILED NEEDS
DEVELOP A SHORT LIST OF SUITABLE SUPPLIERS
VISIT THE SUPPLIERS AND PROVIDE YOU WITH A VISIT REPORT
ESTABLISH AN AGREED TIMETABLE FOR VISITING THE COMPANIES
ISSUES TO CONSIDER:
SIZE OF COMPANY - You need to be relevant
MANAGEMENT CULTURE - Style and communication
SKILLS BASE – what level, are they gaps, tacit knowledge
CONNECT2 APPROACH
CONNECT2.BIZ
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Cost vs Price (Basic rule of thumb as guide only)
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the idea
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What to Look For
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USE YOUR INTUITION
THE DON'Ts THE DO's
WHERE TO LOOK
WHAT TO
LOOK FOR
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Where to Look
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CHECK OUT ALL YOU CAN
ESTABLISH A SHORT LIST
BACKGROUND SEARCHESWHERE TO
LOOKCONNECT2.BIZ
The Do’s
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PHOTOGRAPH WHAT YOU SEE
ASK QUESTIONS
STEP BY STEP
BE PATIENT
SHOW RESPECT
LEARN TO SAY HELLO
READ ABOUT THE CULTURE
INVOLVE A LOCAL YOU CAN TRUST
THE DO'SCONNECT2.BIZ
The Dont’s
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EXPECT MAGIC
YES DOES NOT ALWAYS
MEAN YES
LEAVE YOUR COMMONSENSE
AT HOME
WORK OVER THE
INTERNET ONLYJUST VISIT AN EXHIBITION
SEDUCED BY PRICE
MAKE INSTANT DECISIONS
ASSUME ANYTHING
THE DONT'SCONNECT2.BIZ
Intuition
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MAKE SURE WHAT YOU SEE
=
WHAT YOU ARE TOLD
LOOK WITH YOUR BRAIN / EXPERIENCE
USE YOUR
INTUITION
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Culture
“Despite popular beliefs to the contrary, the single greatest barrier to business success is the one erected by culture”
Edward T Hall & Mildred Reed Hall
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• If you write their name in ____ colour, it is extremely bad luck and people feel upset (Japan, China)
• People appreciate if you call their [first name/ ] (Japan, China)
• Sending _______as a gift, means that you want to end the friendship or relationship with them (China)
red
surname
a clock
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Culture
CONNECT2.BIZ
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39
Culture
Poor culturalunderstanding
can kill a potentiallygood relationshipwithout you ever
knowing......Take time to
understand keycultural
differences
CONNECT2.BIZ
“In an organizational and cultural context more can be gained by seeking to leverage rather then subdue opposite forces.
Integrating potentially conflicting opposites into a harmonized whole rather than sidelining them as inconsistencies, can unleash
great opportunity”
Nick Dallas
Copyright © Eur. Ing., Dr Lee E J Styger
Dallas N: How to Do Business in China, McGraw Hill, 2007, ISBN 9780070138094
Culture
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Communication
MAKE IT OFTEN
SAY IT IN MANY DIFFERENT WAYS
MAKE IT RELEVANT
MAKE IT SIMPLE
COMMUNICATIONCONNECT2.BIZ
COMMUNICATION IS A 2 WAY PROCESS……….
Which requires transmitting……….and............receiving
listening to what is not said is sometimes more important that what is said
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Communication
Anyone in the transmit only style will never be successful in China - or anywhere else
CONNECT2.BIZ
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Bad communication screws up the best teams….every time
Communication
Saying the same thing a different way can make a big difference to the understanding
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Communication
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The Honeymoon....well at the start
Exchange business cardsat an exhibition,
“Love at first PRICE “!
The first quoteslook great,
samples are top quality
Time to order that Yacht !
9'4567Turn offexistingsuppliers
Quality problems.....Delivery problems.....
Services levels fallen.....Customer complaints...Who’s going to pay !
How come all our savingshave disappeared in travelcosts for staff going out toresolve supplier issues....
Customers are loosing confidencein our ability to resolve the problems,
ours and theirs.!!!
CONNECT2.BIZ
You can do all the desk research you want
- attend as many functions as there are
- but to gain knowledge you must walk the walk ..and talk the talk
You MUST visit suppliers and see for yourself, you should look to get local
support and you MUST ensure you can manage the supplier, be prepared to
transfer appropriate knowledge.
Make sure you have a strategy that works for YOU, work on a step by step
basis, its the only way to gain confidence and trust....both ways.
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Communication.....see, do, hear.
CONNECT2.BIZ
On the surface the same, but underneath there is a difference - depth of knowledge is important if the environment is changing
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Communication....see, do, hear.
Make sure what you seeis in line with what you are told...
If not dig below the surface.
Never assume everyone has yourexperience and knowledge,
especially on your products and processes...even if they say so.
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the payoff
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When in a Hole
Sometimes is not possible to dig yourself out without help
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What to Do
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CONFIRM
THE TRIP
CLEAR THE FOG
PREPARE
BIZ STRATEGY
GETTING
STARTED
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On Strategy & Success
“He who knows the art of the direct and indirect approach will be victorious. Such is the art of maneuvering”
Sun-tzu
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A Strategy for Competing in a global world..
How to compete with the big fish, and remain a successful SME.....
Become part of a knowledge-based Connect2 business cluster, work with others your size, buttogether create a much bigger opportunity.............................CONNECT2.BIZ
On Strategy & Success
“Sometimes it is better not to take a straight road to your destination”
Old Chinese Proverb
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the close
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The Art of the Possible - Positive Change
Sometimes we need to look at things from a different perspective to see the opportunity
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What is a Chinese SME looking for from a Western SME
2 WAY LEARNING PROCESS
LONG TERM PARTNERSHIP
SHARE COSTS SHARE REWARDS
TRAINING AND DEVELOPMENT
TECHNOLOGY TRANSFER
WHAT IS A
CHINESE
SME
LOOKING
FOR
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A Safe Bridge
For SME’s, Connect2 provides you with a safe bridge to China West to East, andEast to West.
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AUSTRALIA
UNITED STATES
EURO
CONNECT2.BIZ
The Long-haul
Copyright © Eur. Ing., Dr Lee E J Styger
Our objective is to……
Ensure you have no unwanted surprises..
Make sure you are not trying to juggle with all issues …..
Make sure you meet your deadlines…..
Provide you with a unique China footprint representing your business needs…..
Get the balance right for your business…..
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CONNECT2.BIZ
“If you don’t find the right partner you could be lying in the same bed but dreaming different dreams”
Old Chinese Proverb
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thank you for your time
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