The China Venture

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Ressource 3 Ressource 2 Ressource 1 Golden Town Golden Town Step 3 Step 2 Step 1 Resources are planned to be used when needed and relay on the reliability of the calculation and plan Time Start Start FIGURE 3-15: The way to "Golden Town" 113 relays primarly on the reliability of the network and on the capability to take chances whenever they occur We are not saying that Chinese partners are not able to follow a straight strategy or plan a critical path. Considering the external environmental conditions in China the "Chinese way" may be quicker and more successful as too many unforeseen circumstances exist in this growth market with rapidly changing infrastructures, laws, financial institutions and system, politics, labour m arket and distribution market. A study by Arthur Andersen Consulting shows that for a selected group of 75 FIE's in China, companies with the best results focused most on partner relationships and human resources management. 114 Due to realistic expectations, a clear strategy, long lasting relationships and also “luck”, many companies are successful in China. But one should also distinguish between reality and myths! 113 China - Wirtschaftspartner zwischen Wunsch und Wirklichkeit, Reisach et al., 1997, p.313. 114 Source: "Der Monat", issue 12/1996, Swiss Bank Corporation, p. 40. 104
3.2.13 Case Study: Swisstec, Lyss 3.2.13.1 Company Profile Swisstec is a co-operation of various Swiss mechanical engineering companies to market their products in the People's Republic of China. The company was founded by Feintool AG Lyss as successor for its local agent organisation in Beijing, Chongquing and Shanghai and today has the following members (shown in Table 3-10). Company Activities BalTec Maschinenbau AG, Pfäffikon/ZH Dama Optikmaschinen AG, Wetzikon Fehlmann AG, Seon Feintool AG Lyss, Lyss Hämmerle AG, Brugg Mikron Agno, Agno Sempac AG, Cham Weinberger AG, Dietikon Kardex AG, Volketswil Sheet metal working machines, riveting machines Micro engineering for precision, mechanics, optics, glass and ceramics Metal milling and drilling machines Fineblanking technology and forming presses Sheet metal working machines (flat metal part roll-leveling machines) Automatic machining systems for small parts Production lines for chip cards Photonics instrumentation for the analysis of fast motion Modular storage and retrieval systems TABLE 3-10: Members of the Swisstec organisation Swisstec offices are located in Beijing, Shanghai and Chongquing with plans to open a Guangzhou office in the near future. 3.2.13.2 Motivation for Founding Swisstec Due to retirement of Feintool's representative in Beijing, who also acted as agent for about a dozen other Swiss companies, a solution for a succeeding organisation was sought. Given that the office infrastructure was too big and therefore too expensive for Feintoool to bear alone, the alternative seemed to be to appoint one of the large Swiss trading companies in China as agent. However, these trading companies would normally have a high number of agencies and Feintool feared that they might not pay enough attention to its relatively small market segment. As a result Feintool sought the co-operation of the other companies which were represented by the same agent in China. 105
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The China Venture: Business Environ
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Table of Contents List of Figures .
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3.2.3.2 Special Funds for Setting U
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3.4.1.1 National Culture ..........
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List of Tables TABLE 2-1: THE AREAS
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GBP Pounds Sterling GDB Guangdong D
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1. Introduction: The China Venture
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After a short discussion with the p
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co-operate with other firms, especi
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The Chinese operating legal system
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First of all, Britain’s predomina
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democratic centralism, all governme
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The courts are the state organs exe
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more than three hundred intermedia
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2.2.8 Company Law China’s first n
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Things seem have to become a lot cl
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2.3.1.1 Financial sector developmen
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securities, trading, initial public
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underdeveloped compared with market
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established in January 1996 by 59 p
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Chinese Banks Foreign Banks Financi
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system formulation has been put on
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The separation of production and co
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swap centres (see also above). From
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investors with little experience an
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them, while a branch with a shortag
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Loans, public offerings of shares,
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is often to acquire foreign capital
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2.3.3.2 Debt financing As getting t
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the approval of special authorities
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control compared to national enterp
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usiness in China and related issues
Page 65 and 66: 3. Pre-Entry Strategic Consideratio
Page 67 and 68: While the testing for the general r
Page 69 and 70: of relevant contacts to suppliers a
Page 71 and 72: partner companies with free servici
Page 73 and 74: strengths which his own company lac
Page 75 and 76: Central Committee of the Communist
Page 77 and 78: environment for foreign investment
Page 79 and 80: legal and regulatory environment of
Page 81 and 82: 3.2.4.3 Legal Framework for Foreign
Page 83 and 84: • China’s entry into membership
Page 85 and 86: • stipulates that advanced techno
Page 87 and 88: Government approval. Foreign invest
Page 89 and 90: Co-operative Joint Venture Status P
Page 91 and 92: Reflecting on these points the foll
Page 93 and 94: Success Factors concerning Products
Page 95 and 96: Success Factors concerning Company
Page 97 and 98: high-technology are eligible for th
Page 99 and 100: Available Distribution Channels A m
Page 101 and 102: Available Distribution Channels Mar
Page 105 and 106: Illustrative Case Studies The follo
Page 109 and 110: Which Aspects should SME's Focus on
Page 111 and 112: Strategy No. 1: Have Cash A comfort
Page 113 and 114: expenses have a detrimental effect
Page 115: As a conclusion, network oriented m
Page 119 and 120: factor which makes the foreign firm
Page 121 and 122: developed within the SME, its impac
Page 123 and 124: 3.3.1.3 The Role of Technology Mana
Page 125 and 126: Indirect export and direct export a
Page 127 and 128: maintenance or the use of establish
Page 129 and 130: Government Central Exploiting Sales
Page 131 and 132: in the most advanced provinces and
Page 133 and 134: network through which the products
Page 135 and 136: Siemens or Motorola, they may have
Page 137 and 138: Chinese partners. He also began to
Page 139 and 140: orders. However, a country may also
Page 141 and 142: Germany/Switzerland China democrati
Page 143 and 144: 3.4.2.4 Conversation at the first m
Page 145 and 146: only after a certain time and even
Page 147 and 148: 3.4.3 Experiences of European Compa
Page 149 and 150: ones who atte nded a course. They s
Page 151 and 152: Another Chinese tactic is, as menti
Page 153 and 154: 4. Post-Entry Strategic Considerati
Page 155 and 156: and the other one in China. The com
Page 157 and 158: experience in operating production
Page 159 and 160: In these two cases, the companies m
Page 161 and 162: 5. References Aharoni, Y. (1966): T
Page 163 and 164: Dony, A. G. (1998): Market Entry St
Page 165 and 166: Islam, I. / Chowdhury, A. (1997): A
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Madura, J. (1993): International Fi
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Semkow, B. W. (ed.) (1995): China F
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6. Appendix 6.1 Fact Sheet People
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