Tuesday, March 20, 2007

China strategy: Crossing the rocky river

The only way to cross a river with no bridges, that's full of stones and has a rapid current is with a good strategy. A former premier of China once said that you cross a rocky river by feeling for stones. Feeling for those stones and crossing the river is the business strategy. You must look ahead and identify those strategic stones in your China "river crossing." Strategy leads structure.

What are the risks and rewards of crossing over? Remember that 1.3 billion people is a large population but not necessarily a large market. There are two ways into the market: Either you buy it or you build it. Having a clear vision of where you are going in the market will save you from dismantling what you have built. A clear vision will sustain you.

Relationships are the essence of Chinese culture. Historically -- and in the present day -- the majority of conversations take place face to face, not over telephone. You will need to meet people at least once -- and often more than once -- to gain their trust. Favors come from relationships and history.

Three steps for International investors:
  • Carefully determine a solid set of motivations for your China journey
  • Suspend decisions on the structure of your business until you determine what your strategy should be
  • Validate your plan with deep due diligence before you begin
And always remember "the 6 Ds": due diligence, due diligence, due diligence.

Identifying your strategic stones in the China-business River is just the beginning of this journey. You'll need expertise and flexibility to adapt: Some of these stones will prove secure, but others will be quite slippery. When you find your footing, that's when we start to read about your successful strategies in the China Business News.


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