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Best Practices China
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Best Practices China
DiligenceChina
We Want You!
Are you Profile-worthy? Know someone who
is? Let us know. ChinaSolved is always
looking for new views on successful manage-
ment idesa in China.
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| China Business Services is an independent, research-driven consultancy that uses specialist resources to deliver integrated business solutions. With representatives in London , Beijing , Shanghai , and resources across China , we provide the strategic and operational support that enables organisations to navigate China 's complex challenges and rapidly changing business and regulatory environment. Visit our website, and China Business Blog, at www.ChinaBusinessServices.com for more information. | ||||
Speed of change: China is a big, complex market that is still developing in terms of policy, regulation, and competition. The speed of change presents a real challenge, and means that strategic plans need rapid implementation and constant updating. If a plan is left on the shelf, it is out of date.
Transparency (lack of) in data and organisations: Information is a valuable resource, but there is so much of it that it is possible to become overwhelmed. At the same time, much of this data is questionable - due to poor collection methods, lack of independence, or because it is out of date. The problem is compounded on an operational basis, because within organisations there is often a culture of secrecy (information = power). It takes selective digging to get the information you need.
Legal protection and enforcement: The law can only ever be part of the strategy. Lack of effective legal protection is one of the main perceived risks for foreign companies in China , and many traders and investors rightly spend a lot of time getting legal advice. However, it is important to note that enforcement is a challenge, and that once a legal crisis is upon you, half the battle has already been lost. In parallel with setting up legal structures, it is therefore important to develop strategies for protecting IP and other assets, as well as to develop a “guanxi” support network in your industry and local government.
Transparency (lack of) in data and organisations: Information is a valuable resource, but there is so much of it that it is possible to become overwhelmed. At the same time, much of this data is questionable - due to poor collection methods, lack of independence, or because it is out of date. The problem is compounded on an operational basis, because within organisations there is often a culture of secrecy (information = power). It takes selective digging to get the information you need.
Legal protection and enforcement: The law can only ever be part of the strategy. Lack of effective legal protection is one of the main perceived risks for foreign companies in China , and many traders and investors rightly spend a lot of time getting legal advice. However, it is important to note that enforcement is a challenge, and that once a legal crisis is upon you, half the battle has already been lost. In parallel with setting up legal structures, it is therefore important to develop strategies for protecting IP and other assets, as well as to develop a “guanxi” support network in your industry and local government.
Build a network: China is a big, complex place in which things move very quickly. It is also a place where networks and “guanxi” are important. A strong network takes time to develop, but will help to maximize your opportunities, and help control your risks.
Understanding the client is as important as understanding the market: Just as China has a unique business culture and environment, so do other countries. For example business culture in Germany is very different from in the US. Companies also operate in different ways, on different scales, and with differing approaches to strategy and risk. As an advisor, it is essential that these differences are understood, and applied to the market situation in a way that is relevant to the client. A one-size-fits-all approach will not work.
Understanding the client is as important as understanding the market: Just as China has a unique business culture and environment, so do other countries. For example business culture in Germany is very different from in the US. Companies also operate in different ways, on different scales, and with differing approaches to strategy and risk. As an advisor, it is essential that these differences are understood, and applied to the market situation in a way that is relevant to the client. A one-size-fits-all approach will not work.
Don't believe the hype. Yes, China is a huge and exciting market and, yes, it does have unique characteristics - but it is also a place where common sense and a measured approach are important building blocks for success, just anywhere else. It may seem a simple thing, but may people forget their basic business skills, and try to do too much, too quickly, due to a mixture of shock, awe…and pressure from a distant head office.
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