Making it in China

Kai-Fu Lee
September, 2003

Summary：

With its booming economy, untapped talent base, and growing domestic markets, China offers massive business opportunities and great strategic importance for any company. China is virtually any company’s largest opportunity for growth in the 21st century.

 

Yet, China’s unique cultural, business, and political environment pose significant challenges to multinational corporations that want to succeed there. Indeed, many companies have fallen prey to these challenges in the past 10-20 years of operations in China.

 

On the surface, these challenges appear difficult to overcome; yet, when we study the histories of the multinational corporations operating in China today, it's evident that some have achieved exceptional success in China. The experiences of these successful companies can be mined to create a list of strategic formulas for success that includes making long-term commitments, building relationships, nurturing local employees, supporting local business ecosystem, being agile and flexible in local business operations, and keeping a unified and humble profile.

 

Any company can aspire to success in China, if it learns from these companies and develop a unified China strategy. This strategy must aim to achieve long-term business success by bringing economic benefits for China, and to achieve sustainable trustworthy image by nurturing local people and local relationships. Any company will succeed if it leverages the proven formulas for success, learn from own past experiences, build a coherent strategy, and execute it consistently and persistently.

 

This paper presents the overall opportunity in China, discusses the six challenges, and uses case studies to illustrate six formulas to answer the six challenges.

Table of Contents

Making it in China.. 1

Executive Summary.. 2

1. Opportunity in China.. 3

China's economic growth has created huge opportunities. 3

The market will grow even more in the next 10 years. 3

The supply of low-cost labor will drive China’s economy for the next 20-30 years. 4

China offers tremendous IT talent. 4

2. Challenges of doing business in China.. 5

Challenge #1: Unique protocols and relationships. 5

Challenge #2: Contribute first and benefit later. 6

Challenge #3: Hire senior leaders and nurture local people. 7

Challenge #4: Play by China’s market rules. 7

Challenge #5: the local economy gets top priority.. 8

Challenge #6: Good image can be elusive. 8

3. Formulas for Success in China: Case Studies.. 10

Formula #1: Learn the protocols and forge trusting relationships. 10

Formula #2: Establish a strategy for long-term commitment. 11

Formula #3: Nurture local talent and leadership. 12

Formula #4: Be flexible and open to local needs and practices. 12

Formula #5: Help build the local business ecosystem. 13

Formula #6: Build trust from a unified, humble organization.. 14

6. Conclusion... 15

APPENDIX: Analysis of Successful MNCs in China.. 16

[此贴子已经被作者于2008-11-1 2:00:08编辑过]