The China Venture
The China Venture The China Venture
The joint venture was established by Forster Rohner AG, Switzerland, Mizorogi Co. and Nisshinbo Industries Inc., both located in Tokyo, Japan, and named "Suzhou MFN Embroidery Co. Ltd.". MFN had to follow their European customers setting up their new manufacturing units in China. Except from occasional contacts to the Chinese market MFN had only little knowledge of the Chinese business environment. Therefore it is interesting to see, how they managed to get access to the other vital profile dimensions which they could not provide themselves: Their key advantage was their dedicated management decision to move to China and to provide the necessary management resources for this task. They further were in the lucky position to have a Chinese born manager available, who had been employed by one of the Japanese partners a couple of years earlier. That is why they could build their guanxi to local authorities in a comparatively short time. Their good contact to the provincial government helped them to get access to the infrastructure thereby filling the last gap in their profile (marked as "Suzhou" in above diagram). At the moment they emphasise on the build-up of the domestic market in order to stabilise the company (this will result in "pushing out" the envelope line in the diagram closer towards the optimum profile!). Suzhou Nove Fashion & Crafts Co. Ltd. The second case study also deals with the textile (knitwear) industry - this company was set up in order to gain access to the local raw material market and to export high quality products to Europe. 94
Available Distribution Channels Market Knowledge Relationship (Guan Xi) Nove Marzo AG Financial Power, Capital & Land 10 9 8 7 6 5 4 3 2 1 0 Quality of Infrastructure Available Management Resources Suitability of Product & Services Portfolio Production Know-how Lubei Village FIGURE 3-13: Profile of Suzhou Nove Fashion & Crafts Co. Ltd. The company was set up as a joint venture between Nove Marzo AG, Switzerland, and the Chinese village Lubei, where the knitwear factory was built. The reasons for this choice are fairly obvious: the village of Lubei not only provides land and infrastructure, but being a government institution also brings in guanxi into the joint venture. Again, the dimension "available management capacity" has to be emphasised: in the beginning of the project the company was entirely ma naged by Europeans, but a local management was built up at the same time. Today the company is run by a local management with European involvement reduced to the absolutely necessary minimum. Swisstec The third case differs from the above two as the company discussed is a sales organisation in China without direct investment into production facilities (see Case Study: Swisstec, Lyss). 95
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Available Distribution<br />
Channels<br />
Market Knowledge<br />
Relationship (Guan Xi)<br />
Nove Marzo AG<br />
Financial Power, Capital & Land<br />
10<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Quality of<br />
Infrastructure<br />
Available Management<br />
Resources<br />
Suitability of Product &<br />
Services Portfolio<br />
Production Know-how<br />
Lubei Village<br />
FIGURE 3-13: Profile of Suzhou Nove Fashion & Crafts Co. Ltd.<br />
<strong>The</strong> company was set up as a joint venture between Nove Marzo AG, Switzerland, and the<br />
Chinese village Lubei, where the knitwear factory was built. <strong>The</strong> reasons for this choice are<br />
fairly obvious: the village of Lubei not only provides land and infrastructure, but being a<br />
government institution also brings in guanxi into the joint venture. Again, the dimension<br />
"available management capacity" has to be emphasised: in the beginning of the project the<br />
company was entirely ma naged by Europeans, but a local management was built up at the<br />
same time. Today the company is run by a local management with European involvement<br />
reduced to the absolutely necessary minimum.<br />
Swisstec<br />
<strong>The</strong> third case differs from the above two as the company discussed is a sales organisation in<br />
<strong>China</strong> without direct investment into production facilities (see Case Study: Swisstec, Lyss).<br />
95
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