Steve Ganster presents opening speech for Shanghai American Chamber Annual China Trends Conference





The Shanghai American Chamber conducted its annual China Trends conference in Shanghai earlier this month, aiming to update the business community on key trends in China's economic, regulatory, political and business areas that will affect the operations of American and other foreign businesses in China.

Steven Ganster, managing director of China strategy consulting firm Technomic Asia and co-author (with Kent Kedl, the regular host of this podcast) of the business strategy book "The China Ready Company," kicked off the event by outlining some key trends that will affect company strategy and business case development in China.

In today's podcast, Ganster references his slides from that presentation. Those slides are available to view or download at
www.technomicasia.com/AmChamShanghai2007.pdf.

"The pace of change in China is so rapid that we view business years in China like 'dog years,' " Ganster said. "One year in China's economy is like seven years in the West in terms of change."

In his opening presentation, Ganster covered:
-- Determining a company's addressable market – "where you can make money"
-- Changes in competitive structure in China
-- Developments in strategy alternatives, including acquisition
-- Movement to strategic sourcing

In addition to Ganster, presentations were made by other premier China advisors and practitioners such as AC Nielsen, ChinaVest, Baker & McKenzie, Mercer Consulting, the deputy director of Shanghai World Expo, and a panelist of award winning journalists from the Wall Street Journal and the BBC.

"The need to develop a sound and dynamic business case has never been greater," Ganster said. "China's markets are slowly maturing and becoming increasingly competitive. If your value proposition is not accurately aligned with your market target, you just can't make money."

Ganster also spoke about the emergence of acquisition as a strategy to accelerate growth.

"The early to mid '90s was the era of the 50-50 joint venture," Ganster said. "After many failed ventures and a loosening in foreign ownership restrictions, companies quickly shifted to wholly-owned investment strategies. But limitations in this approach are leading to acquisition as a way to achieve the best of both strategies."

China strategy in Six Steps: Part 2 of 2





This is second of two parts of my presentation from a recent event hosted by the Minnesota Trade Office. The first part, which you can find here, covers an introduction to China strategy and a discussion of the first step –- analyzing your "China readiness."

As we continue today with "The Six Steps to Building a China Strategy," we start with Step 2: finding your addressable market. In China, as with any other market, focus is a key to success. Step 3 involves doing competitive intelligence, identifying your competition. Always keep in mind that your markets and competitors at home are not the same markets competitors you'll find in China.

Step 4 is to identify where you will fit in the value chain. Your China strategy will be determined by where in the value chain you will play. In Step 5 we look at which assets to localize. There are a broad range of options for how deeply a company can participate in China. The key lesson is, don't do more than you have to! A company's participation mode is determined by best "match" of external requirements, internal resources and a risk profile. How "local" do you need to be? Identify the key assets you will need on the ground in China.

Step 6 covers entry structure: Build it or buy it? Based on what assets you will need to localize, you can begin thinking about how to localize them, either by building them yourself or "buy" them by partnering. These decisions determine your "build it" strategy or form the selection criteria to find appropriate China partners.

In China, understanding and managing relationships is fundamental to supporting a successful business. Everything flows from an opportunity within a relationship.

More on these topics at www.chinareadycompany.com. Also, be sure to enter the drawing for an iPod nano by filling out our survey.

China strategy in Six Steps: Part 1 of 2






Today's podcast is from a presentation I gave recently at an event for the Minnesota Trade Office, its 2007 China Practicum. I spoke at the first China Practicum, too, ten years ago. As you might have guessed, things have changed a bit since then.

In this seminar, I laid out the basic principles to guide China strategy development, especially helping business leaders analyze their organizational preparedness to do business in or with China.

Western businesses face many challenges in China, and understanding and balancing risks and opportunities is critical. A solid China strategy is built on a deep understanding of the market conditions in which you will work and the range of responses you can have to those conditions.

In this presentation, we cover the six steps to establishing a solid, effective China strategy. Step one is to identify your "China readiness." China is a high-risk place to do business, and companies must be sure they are ready to face the inevitable challenges. China readiness is measured in two key dimensions: motivations to go to China and the level of organizational preparedness to go to China.

Today's podcast is part one of my presentation, which covers an introduction to China strategy and this important first step, evaluation China readiness. In a few days, I'll post part two, which covers the remaining five steps to developing an effective China strategy.

For more on China readiness, check out www.chinareadycompany.com.