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Doing Biz In China Sme

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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.

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.

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  • 1. “Doing Real Business in China” information for SME’s Stuart Patton & Lee Styger Copyright © Connect2 Limited - www.connect2.biz
  • 2. About the Team SOURCING 10 Yrs CHINA EXPERIENCE SUPPLIER MANAGEMENT START UP'S BIZ DEVELOPMENT BLUE CHIP CONNECT2.BIZ US to CHINA STUART TECH TRANSFER ASIA PATTON EURO to CHINA ESTABLISHING STRATEGIC PARTNERSHIPS / JV Copyright © Connect2 Limited - www.connect2.biz
  • 3. About the Team IMPROVING HK COMPANIES 96' GOV. CONSULTANCY CHINA THREAT TO HK INTERNATIONAL BIZ DEVELOPMENT START UP CONNECT2.BIZ LEE STYGER GLOBAL PROJECT MANg GLOBAL SUPPLY CHAIN DEV. TECH TRANSFER Copyright © Connect2 Limited - www.connect2.biz
  • 4. Macro View MISSION REPRESENTATION /ACTIVITY CONNECT2.BIZ Connect2 MACRO view OBJECTIVE GOAL Copyright © Connect2 Limited - www.connect2.biz
  • 5. Sectors EDUCATION CONNECT2.BIZ TECHNOLOGY Connect2 sectors of Business CleanTech MANUFACTURING Copyright © Connect2 Limited - www.connect2.biz
  • 6. the burning issue Copyright © Connect2 Limited - www.connect2.biz
  • 7. China Touches Us All You cannot ignore the critical mass of China CHINA and the CONNECT2.BIZ fact it Touches all of us - directly or indirectly So if you’re an SME in business what do you do about CHINA Copyright © Connect2 Limited - www.connect2.biz
  • 8. Don’t ignore your changing environment Sometimes you need to stop and look around to see what help is available to you “No, no, no - I can’t be bothered to see any crazy salesman - We’ve got a battle to fight!” Copyright © Connect2 Limited - www.connect2.biz
  • 9. Take time to see who can help you CONNECT2.BIZ Take some time out to think about what strategy you may 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 Copyright © Connect2 Limited - www.connect2.biz
  • 10. the overview Copyright © Connect2 Limited - www.connect2.biz
  • 11. China Macro Population 1.3 B 250 M Labour force 800 M Internet CONNECT2.BIZ GDP (PPP) $7.043 trillion users.... 368 M main line GDP 11.4% (07) 9.8% (08) Internet phones Inflation 4.7% (07) 7% (08) infrastructure 480 M Unemployment 4% continues to Cell Phones Exports $1.221 trillion grow at a Imports $917.4 B fast pace 75,000 KM of Railway 1,600,000 KM of Roads 467 Airports 1,775 Registered ships Copyright © Connect2 Limited - www.connect2.biz
  • 12. China Macro GDP by Sector Agriculture 11.7% Export Partners Industry 49.2% Import Partners Services 39.1% Japan 14.6% USA 21% CONNECT2.BIZ S.Korea 11.3% HK 16% Labour by Occupation Taiwan 10.9% Agriculture 43% Japan 9.5% USA 7.5% Industry 25% S.Korea 4.6% Services 32% Germany 4.8% Germany 4.2% Copyright © Connect2 Limited - www.connect2.biz
  • 13. China Macro The Natural Evolution from Low Tech to Higher % #$ !quot; Technology CONNECT2.BIZ !quot;#$ People Employed in the Process CHINA unlike any other Asian country can still backfill the low tech end because of critical mass of population Copyright © Connect2 Limited - www.connect2.biz
  • 14. China Macro The Natural Evolution from Low Tech to Higher % #$ !quot; Technology . &, - CONNECT2.BIZ +,! **' () '! %& $ !quot;# !quot;#$ People Employed in the Process CHINA unlike any other Asian country can still backfill the low tech end because of critical mass of population Copyright © Connect2 Limited - www.connect2.biz
  • 15. China Macro The Coastal regions have been the first to develop Future Development inland Copyright © Connect2 Limited - www.connect2.biz
  • 16. China Macro By way of example Guangdong, the 1st region to open up, now has 21 Cities, Guangzhou (16M ) and Shenzhen (13M) being the largest. With a Pop. 110 M Guangdong is made up of 80M residents + 30M migrant workers Copyright © Connect2 Limited - www.connect2.biz
  • 17. China Macro EXPERIENCE UNDERSTANDING HANDS-ON CONNECT2.BIZ WHY CONNECT2 KNOWLEDGE MANUFACTURER Copyright © Connect2 Limited - www.connect2.biz
  • 18. 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……… CONNECT2.BIZ CONNECT2 APPROACH 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 Copyright © Connect2 Limited - www.connect2.biz
  • 19. Cost vs Price (Basic rule of thumb as guide only) !,*-(% ./#$% $quot;0% (!!/0$(1)/% CONNECT2.BIZ 2/3+%0quot;quot;3% &'()*$+% 456% #(2*-7#% !quot;#$% !,*-(%*#%8quot;3/%!quot;80/$($*2/%quot;-%quot;2/3,/(9%:%)(1quot;'3%:%/-/37+;%<%1'$%-quot;$%8($/3*()#% Copyright © Connect2 Limited - www.connect2.biz
  • 20. the idea Copyright © Connect2 Limited - www.connect2.biz
  • 21. What to Look For WHERE TO LOOK USE YOUR INTUITION CONNECT2.BIZ WHAT TO LOOK FOR THE DON'Ts THE DO's Copyright © Connect2 Limited - www.connect2.biz
  • 22. Where to Look CHECK OUT ALL YOU CAN BACKGROUND SEARCHES WHERE TO CONNECT2.BIZ LOOK ESTABLISH A SHORT LIST Copyright © Connect2 Limited - www.connect2.biz
  • 23. The Do’s INVOLVE A LOCAL YOU CAN TRUST PHOTOGRAPH WHAT YOU SEE READ ABOUT THE CULTURE CONNECT2.BIZ ASK QUESTIONS THE DO'S LEARN TO SAY HELLO STEP BY STEP SHOW RESPECT BE PATIENT Copyright © Connect2 Limited - www.connect2.biz
  • 24. The Dont’s EXPECT MAGIC ASSUME ANYTHING YES DOES NOT ALWAYS MEAN YES MAKE INSTANT DECISIONS CONNECT2.BIZ THE DONT'S LEAVE YOUR COMMONSENSE AT HOME SEDUCED BY PRICE WORK OVER THE JUST VISIT AN EXHIBITION INTERNET ONLY Copyright © Connect2 Limited - www.connect2.biz
  • 25. Intuition MAKE SURE WHAT YOU SEE = WHAT YOU ARE TOLD CONNECT2.BIZ USE YOUR INTUITION LOOK WITH YOUR BRAIN / EXPERIENCE Copyright © Connect2 Limited - www.connect2.biz
  • 26. Culture “Despite popular beliefs to the contrary, the single greatest barrier to business success is the one erected by culture” Edward T Hall & Mildred Reed Hall Copyright © Connect2 Limited - www.connect2.biz
  • 27. Culture red • If you write their name in ____ colour, it is extremely bad luck and people feel upset (Japan, China) • People appreciate if you call their [first name/ surname ] CONNECT2.BIZ (Japan, China) a clock • Sending _______as a gift, means that you want to end the friendship or relationship with them (China) Copyright © Connect2 Limited - www.connect2.biz
  • 28. Culture Poor cultural 12 understanding can kill a potentially good relationship CONNECT2.BIZ without you ever 9 3 knowing...... Take time to understand key 6 cultural differences +-!quot;'/)!0-!'quot;$'1#2'!,1'*-- Copyright © Connect2 Limited - www.connect2.biz
  • 29. Culture “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 Dallas N: How to Do Business in China, McGraw Hill, 2007, ISBN 9780070138094 Copyright © Eur. Ing., Dr Lee E J Styger
  • 30. Communication MAKE IT SIMPLE MAKE IT OFTEN MAKE IT RELEVANT CONNECT2.BIZ COMMUNICATION SAY IT IN MANY DIFFERENT WAYS Copyright © Connect2 Limited - www.connect2.biz
  • 31. Communication COMMUNICATION IS A 2 WAY PROCESS………. Which requires transmitting………. and............receiving listening to what is not said is sometimes CONNECT2.BIZ more important that what is said Anyone in the transmit only style will never be successful in China - or anywhere else Copyright © Connect2 Limited - www.connect2.biz
  • 32. Communication Bad communication screws up the best teams….every time Copyright © Connect2 Limited - www.connect2.biz
  • 33. Communication Saying the same thing a different way can make a big difference to the understanding CONNECT2.BIZ Copyright © Connect2 Limited - www.connect2.biz
  • 34. The Honeymoon....well at the start The first quotes Exchange business cards look great, at an exhibition, Time to order that Yacht ! samples are top “Love at first PRICE “! quality Turn off 9'4567 existing CONNECT2.BIZ suppliers 3'45678 Quality problems..... How come all our savings Customers are loosing confidence Delivery problems..... have disappeared in travel in our ability to resolve the problems, Services levels fallen..... costs for staff going out to ours and theirs.!!! Customer complaints... resolve supplier issues.... Who’s going to pay ! Copyright © Connect2 Limited - www.connect2.biz
  • 35. Communication.....see, do, hear. 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 CONNECT2.BIZ 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. Copyright © Connect2 Limited - www.connect2.biz
  • 36. Communication....see, do, hear. On the surface the same, but underneath there is a difference - depth of knowledge is important if the environment is changing Make sure what you see is in line with what you are told... If not dig below the surface. CONNECT2.BIZ Never assume everyone has your experience and knowledge, especially on your products and processes...even if they say so. :;<5<' :;<5<' =>?@;<5<'A>;BC5<D5' Copyright © Connect2 Limited - www.connect2.biz
  • 37. the payoff Copyright © Connect2 Limited - www.connect2.biz
  • 38. When in a Hole Sometimes is not possible to dig yourself out without help Copyright © Connect2 Limited - www.connect2.biz
  • 39. What to Do BIZ STRATEGY CONFIRM CONNECT2.BIZ THE TRIP GETTING STARTED PREPARE CLEAR THE FOG Copyright © Connect2 Limited - www.connect2.biz
  • 40. 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 Copyright © Connect2 Limited - www.connect2.biz
  • 41. A Strategy for Competing in a global world.. How to compete with the big fish, and remain a successful SME..... CONNECT2.BIZ Become part of a knowledge-based Connect2 business cluster, work with others your size, but together create a much bigger opportunity............................. Copyright © Connect2 Limited - www.connect2.biz
  • 42. On Strategy & Success “Sometimes it is better not to take a straight road to your destination” Old Chinese Proverb Copyright © Connect2 Limited - www.connect2.biz
  • 43. the close Copyright © Connect2 Limited - www.connect2.biz
  • 44. The Art of the Possible - Positive Change Sometimes we need to look at things from a different perspective to see the opportunity Copyright © Connect2 Limited - www.connect2.biz
  • 45. What is a Chinese SME looking for from a Western SME TECHNOLOGY TRANSFER 2 WAY LEARNING PROCESS WHAT IS A CONNECT2.BIZ TRAINING AND DEVELOPMENT CHINESE SME LOOKING FOR LONG TERM PARTNERSHIP SHARE COSTS SHARE REWARDS Copyright © Connect2 Limited - www.connect2.biz
  • 46. A Safe Bridge For SME’s, Connect2 provides you with a safe bridge to China West to East, and East to West. CONNECT2.BIZ EURO !quot;#$%&'(%)**+%$'% UNITED #,quot;-*.*% STATES /5'@6>'6@E';>'F;G7'H5I6CJ'?'BKEI;GE'F;G' I6LK>D'E;'H5'EI575'6CC'EI5'MN5 4;G'@756E5'F;G7'G>KOG5'J;;EP7K>E'?'B5' AUSTRALIA N6>6D5'EI5'758E'K>?CK>5'BKEI'F;G7' 75OGK75N5>E8' Copyright © Connect2 Limited - www.connect2.biz
  • 47. The Long-haul $>@5'B5'I6L5'58E6HCK8I5<'F;G7'H7K<D5QQ Our objective is to…… CONNECT2.BIZ Provide you with a unique Make sure you are not Make sure you meet China footprint representing trying to juggle with all your deadlines….. your business needs….. issues ….. Ensure you have no Get the balance right unwanted surprises.. for your business….. Copyright © Eur. Ing., Dr Lee E J Styger
  • 48. Old Chinese Proverb “If you don’t find the right partner you could be lying in the same bed but dreaming different dreams” Copyright © Connect2 Limited - www.connect2.biz
  • 49. thank you for your time Copyright © Connect2 Limited - www.connect2.biz