General Observations, Conclusion, Finally..., Thank you!

General China Observations

• I saw several women bus drivers in Beijing which made me think about the men-women equality. After some questioning around to people around, I got to know that women have been in the work-force for quite some time and they have almost the same rights as men. Very impressive.
• Women entrepreneurs at the Shopping markets
• Friendliness of waiters at restaurants and shops
• A number of foreigners in Beijing – How do people feel about them? Are foreigners welcome? My impression was that they are welcome. Are foreigners from a certain country more favorable than the others? Do shopkeepers prefer certain nationalities over others?

Conclusion

• After this trip to China, I think that India has much more opportunities to grow, and I will go back immediately after the completion of my degree. But the question is: should I get a working experience in the USA or get on the field experience in India and understand the market personally.

• The Government control can drive the growth and at the same time, tie the country down and have a negative impact on the people, economy, and the environment.

• Amongst the local Chinese companies (Beijing Capital Tire and Wahaha) - common thing is the inefficiency in production due to the lack of managerial skills. This is a common problem for many local companies, but these companies understand the local market very well so that works as an advantage.

• Chinese people are more brand conscious than one would think. Example of Wahaha having restaurants, water, soft drinks, clothes, etc. Diversifying under the same brand name is a very common practice in Asia. Japan is already a mature and developed market and can be excluded from this generalization.

• Western things work here in China. Strategies are the same but the implementation and the tactics are different and suited to the local market. Examples are Siemens and DuPont.

• MNCs and locals need to learn from each other. The market is big enough for both the players to co-exist at the same time.

• China has undergone severe westernization and its youth live by Starbucks, KFC, and McDonalds and visit clubs that play western music.

• IP issue: local firms copy now and then they innovate later on. This will force the Chinese governmentt to protect the local companies. This will benefit the local companies and the MNCs who need to protect their IP. This can be explained by the pharmaceutical industry in India and other industries in Japan.

• As pointed out by several speakers, building relationships is one of the most important and critical factors for success while doing business in China. Relationships with the government at the local, state as well as the federal level, relationships with local experts who understand the market, as well as relationships with customers can go a long way in sustaining and growing the business.

Finally …

The entire world has set its eyes on China for the Beijing 2008 Olympics. Words cannot describe enough of what we saw in the entire 16 days. The Olympics might be a good time to portray a positive image which the government is trying real hard to build. I guess I will have to buy an HDTV next year to immerse myself in the true Chinese experience.

Thank you Prof. Lin, Prof. Eng and Prof. Ali for making this a memorable trip by sharing your knowledge.

Thank you Cathi and Anie for logistics and handling.

Thank you to Team Babson for sharing knowledge, asking questions and moreover being great friends during the entire trip.

Day 16 - June 6th Wednesday

It is time to go home (albeit 2 days earlier than planned due to completion of paper-work for internship). A fun-packed, adventurous, stimulating an moreover eye-opening trip of China has come to an end.

Day 15 - June 5th Tuesday - CITA

Clothing Industry Training Authority (CITA) – Prof. K.W. Yeung, Director of CITA

CITA was setup by the Hong Kong government to provide training courses for the clothing industry. They also have a “labs” with state-of-the-art equipment and technology to provide local companies learn and experiment and come up with new and advanced products.

From today’s talk and the garment factory visit yesterday, the growth of giant retailers such as Walmart, Target, Carrefour is putting additional pressure on the garment industry in China. However, the domestic market has opened up and consumerism has spread across the country allowing for the creation of local brands.

Day 14 - June 4th Monday – Garment Factory

We visited a garment factory located on the outskirts of Shenzhen. The factory was located in trade development zone. I was really impressed by the facilities provided to the employees in the factory, namely, dining hall with subsidized food, air conditioned work area, and dormitories for un-married employees. The factory had recently installed a sophisticated computer system to track orders proving that it has been doing great business and well on its way for future growth. Additionally, a company has to constantly adapt to the changing world and improve efficiencies. It was also seen by the use of computer aided design tool to cut fabric into garment shapes so as to use every inch of fabric. After the visit, I had several unanswered questions. How can a garment company in China continuously grow its business in the face of increasing competition from other low-cost countries such as Vietnam, India, Bangladesh and Pakistan? I guess relationship with customers, quality, timely delivery and word of mouth recommendations play a big role in keeping and growing the business.

We spent the evening on a bus ride into Hong Kong.

Day 13 - June 3rd Sunday

Today we spent the day traveling to Shenzhen.

Day 12 - June 2nd Saturday

Today was a leisure day. After 11 days of hectic traveling and information overload, I decided to sleep in till the afternoon. Evening was spent visiting Yu Garden, an old part of the city. It was amazing to see such an enormous, small city-like, neighborhood in the middle on Shanghai. Traditional Chinese architecture, surrounded by small stores, dumpling food-stalls, Starbucks (it shows the penetration of a global powerhouse), Temple were sights that will always remind me of China.

Day 11 - June 1st Friday (Delphi, DuPont)

Delphi – Clifford Kang, Country Manager, China

Delphi is another MNC that we had a chance to visit. Delphi prides itself on innovation and technology. It has been facing severe competition from global and local competitors primarily on cost and technology. It is also facing IP issues from local companies and thus technological innovation plays an important role in the growth of such a company. Delphi, like other Chinese companies, is also faced with a problem of attracting talent and retaining them. I guess this is a growing problem in many developing countries. India is facing similar talent crunch and high turnover rates. I wonder if these impede the overall growth of the economy.

DuPont – Jason Yu and Eric Carlson

On our way to DuPont I noticed that, DuPont was located in the Free Trade Zone in a newly developed area which had several Biotech, Pharmaceutical, and IT companies. It almost seems that they chose the location strategically based on the tax sops given by the government and more importantly locating closer to their customers.

DuPont is facing several challenges for its operations in China. It is facing severe competition from local, regional, national and global players in all the industries that it has its business units. On the other hand, its broad range of customers is allowing DuPont to create a niche in certain markets. It has local, regional, and global customers for the products that are manufactured in China. However there is confusion about the quality, standards and the specifications for the Chinese market. I have observed a similar concern in the Indian markets as well. Indian manufacturers seem to produce a lower grade and lower quality for the local market, while exporting the higher grade product which will get them higher margins. Although this trend continued for a long period of time, the Indian consumer is now getting more quality conscious and would not want to compromise on quality, standard and specification of the desired product.

Even after the presentations I have a few more questions. How is Du Pont able to manage the vast number of products? Is their marketing strategy in China different from the one in the USA?