2008 china market entry analysis for us firms

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In 2008, a group of executive MBA's from Georgetown's McDonough School of business

In 2008, a group of executive MBA's from Georgetown's McDonough School of business

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  • 1. Going .CN 6 CHALLENGES US WEB FIRMS MUST MEET TO SUCCEED IN CHINA
  • 2. What This Is A Report for US Senior Executives at Web Firms trying to leverage   The largest Internet audience in the World   The largest commercial market   BUT an immature online advertising environment Whose Revenue Model is based on Online Advertising
  • 3. What We Did
  • 4. What We Found   Six Unique Challenges   US Firms Are Unaware or Ignoring these issues   Bottom Line: No US Web Publisher Is Leading In China Today   They have no natural advantage in China
  • 5. Overcome Fear of Labor   China has a lot of people who need jobs   Brute force labor in lieu of infrastructure   Government likes massive headcounts   Cultural expectations mean face to face is important   Automation is not a virtue   Contrary to typical US firm focus on labor cost saving
  • 6. The Government – Obey, Lobby but Move Ahead   Multiple government (national and provincial) authorities and influence   Multiple, often conflicting, rules and regulations   Close ties can be beneficial   Get over the uncertainty and move ahead   Ask forgiveness if questioned   But See the Great Firewall
  • 7. China Has the Largest Online Audience. So What?   China Internet Audience is 100+% of US Audience   But China Ad Spend is 5% of US   And 80% of that goes to 6 players   Ad Models are unsophisticated   Ad Buyers are different   Focusing on brand awareness   Users Aren’t Transacting   Set Your Expectations Accordingly
  • 8. Start at Zero – Build Up to What Makes Sense   No US Based, Cookie Cutter Solutions   Rethink Everything for China   Offering   Brand   Model   Systems   Local Leadership And Autonomy Is KEY
  • 9. Deals Are Person to Person, Bargained For, and You Buy What You Can See   Even Online, Guanxi Matters   Everything Must Be Negotiable   Advertisers Don’t See Value Unless They See the Ad
  • 10. The Chinese Internet Will Not Become the US Internet   Clutter Is Expected   Entertainment   Youth   Community   Provincial   Mobile   Café
  • 11. Final Thoughts   IF Your Goal Is to Compete in China’s Online Ad Space, Don’t Wait…   Don’t Wait Because of These Challenges   Chinese Internet Is Moving Even Faster than U.S.   Don’t Wait Because of Ethical Issues   Ethical Issues Surrounding Media Especially Difficult   But Not Going to Fundamentally Change; Make Go/No-Go Decision   Compete Now
  • 12. http://jamiemba.wordpress.com/