Doing Business With China: Avoiding the Pitfalls
Stewart Hamilton, Jinxuan (Ann) Zhang
Format: PDF / Kindle (mobi) / ePub
The better and faster learner wins. That is the clear conclusion that the authors reach in this detailed analysis of why many Western companies fail in their attempts to succeed in China, one of the fastest growing markets in the world and why many Chinese companies encounter difficulties in their overseas ventures.
Fundamental errors are made; lessons from the experience of others ignored and the lack of adequate advance planning are just some of the pitfalls to be avoided. This book is intended to help Western companies and executives avoid the common mistakes and to assist their understanding of what is required to make a success of venturing into China, and vice versa, Chinese companies and executives coming onto the world stage.
Facts speak for themselves. The book draws on extensive interviews with both Chinese and Western executives and regulators and presents a series of detailed cases to illustrate what went wrong and why. The authors suggest what needs to be done to ensure success, particularly in terms of having learning and building corporate capabilities as the ultimate objectives for any proposed investment/venture.
Understanding the Chinese approach to business and being conscious of rules of the road are just two of the key elements.
(but not approval from the authorities) and even created a short-form licensing contract solely for this purpose. This alternative solution created the conditions for confusion. Further exceptions, allowing Wahaha use the trademark for other products under certain conditions, compounded the problems. Admittedly, Danone and Wahaha were creative in finding an immediate solution. It was perhaps the best choice for Danone in the circumstances. However, it did not solve the fundamental problem that
Two parties, Glencore and SK Energy, objected to the request for the extension, asking for a shorter period.4 Despite the objections, after taking into consideration the scale and complexity of the matter, the court decided to grant a six-week extension (that is to January 21, 2005) for CAO to present a scheme, and a six-month extension (that is to June 10, 2005) for the creditors to consider and approve the proposed scheme. For a number of reasons, CAO did not go back to court to seek a legal
experienced financial officers, and so to a company’s risk-management structure, reporting and corporate governance. 11: The leadership style of the key players, in particular Chen and Jia as CEO and chairman, respectively Chen* was perceived at CAOHC as “the smart and bold.” The fact that he had turned the Singapore business around was a great proof. However, this, perhaps to certain extent, had also caused some discontent or jealousy within CAOHC. Even though Chen did not have much formal
Gary, Yves L. Doz, and C.K. Prahalad,. “Collaborate with Your Competitors and Win.” Harvard Business Review, January–February 1989. 12. “ Wahaha-Danone Brand Name Feud Highlights Pitfalls of China Business Ventures.” International Herald Tribune, June 27, 2007, http://thestar.com.my/news/story.asp?file=/2007/6/28/apworld/ 20070628113413&sec=apworld (accessed August 30, 2011). 13. Jianqiang, Liu. “Love or Hate Danone.” (In Chinese) China Entrepreneur, April 5, 2007,
through acquisitions and partnerships, focusing increasingly on Eastern Europe, Southeast Asia and Latin America. As a source of future profits, it targeted categories where it could rival or outperform the world’s top contenders. Compared with its traditional rivals—Nestlé SA and the Unilever Group— Danone was a relatively late entrant in the international food market, had less experience and fewer historic links with many developing markets and a less international senior executive profile;