When a Want Turns to a Need, Foreign Companies Compete

Tuesday, December 17, 2013 21:20
Posted in category Going to Market
Comments Off on When a Want Turns to a Need, Foreign Companies Compete

While grading papers last year, I came across the following quote that a student of mine had mined from an interview that I thought summed up the current situation for a number of industries:

“We’re willing to offer some opportunities to local companies. Why not? They are cheap. But it will only be limited to those uncritical systems. For important systems, definitely MNCs will be still our first choice. I don’t think it is going to change in short term.”

It was from an industry executive being interviewed as part of a market entry strategy for a very large “clean” tech firm, and I thought did a great job of highlighting the fact that there is space for foreign firms to compete in China.  Even under a time where the government if looking to reward domestic innovation.

Building on the quote from my own experience, where I think firms entering China would be best to focus is on areas where there is a KNOWN need.  Where there is a KNOWN problem that can no longer be ignored, or a KNOWN constraint that needs to be overcome.  I stress KNOWN because there are plenty of industries/ areas of China where domestic innovation trumps quality because the problem really isn’t tangible, and the solution really isn’t needed.

But once that issue or constraint is KNOWN, things change.  Particularly at the provincial or national level, where the NEED to solve a problem trumps the local need to drive a firm/ GDP forward.

Then it is a process of identifying the key stakeholders and putting forward a value proposition that provides a way forward for a leader to roll out a solution for a KNOWN problem.

Best case, this happens without much effort.  A knock on the door.  A ring of the phone.  They come to you.

But for others, the path is a little more complex.. the hill a little steeper.  It requires investing into a pilot that is VISIBLE, and spending a bit more time than normal explaining the value proposition to the right people.

Which hopefully will lead to a phone call.  A knock on the door.

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