FROM SEA FARMING EXPORT - TO INTERNATIONAL HI-TECH INDUSTRY.
SINOR is in the process of planning the establishment of the world's largest R.A.S. production facility with integrated processing and logistic centre to serve the Chinese and South East Asian markets with live Atlantic Salmon......
While the global economy continued to struggle over the past 12 months, China's economic performance remained strong and it contributed the most in real terms to global economic growth for the sixth consecutive year. European companies have benefited from this growth, with increased revenues and higher average profit margins in China compared to company performances being reported globally. With optimism about continued growth, China's strategic importance has correspondingly increased for most European companies, as has the strategic intention to serve the domestic market through their China operations. This is reflected in the plans of many companies to make further investments, increase the number of permanent staff positions and develop marketing and sales activities as companies increasingly see boosting domestic consumption as important to China's growth. Source EUCCC.
The Norwegian Atlantic Salmon from China will in the years to come supply the Chinese market as well as the and Asian markets with premium quality - guaranteed without antibiotics or vaccination. The Atlantic Salmon grows....
Often, the BEST WAY to learn how to access the Chinese market is by observing the failures that are repeated by Western companies over and over again - and avoid these seemingly simple failures:
The Chinese market and market place is a truly different place to be and to manage. The failure rate of foreign business venture in China is high. So therefore;
Whether the company is an IBM size or a small kitchen tool supplier, the management of all companies know the key phrase; Adapt to the market.
But the Chinese Culture and market is all together a total new ball game. Decision making, legal applications and procedures, rationality, logics and both common and business behavior does simply not make sense in China. That is; It does not make sense to us - the foreigner. For the Chinese it is not only normal , it makes perfectly sense and we, the foreigners are the deviants and easy targets.
After 20 years of active participation in Chinese Business transactions of magnitude, it has become obvious that it is not the lack of knowledge of how China works its institutions that causes the high failure rate. The failure rate is a direct consequence of lacking ability or willingness to enforce the required adaptations to the consequences of the Chinese mode of life. The Chinese market mechanism was never understood, nor was there made provisions for it in the budget.
Very often it is the case that one group from HQ initially comes to China to investigate the market. It is huge! Based on their findings, a business plan is written without any extensive understanding of the language and the culture. A Chief Executive for China is appointed, handed the business plan and the mission has a go.
This can often be an unworkable situation for many Western managers and it contributes to the very high failure rate in China. In their reports, the executives complains about the external pressures such as hypercompetitive markets, confusing government legislation and a multicultural an in-house employee matrix that can be suffocating in itself. But when executives really open up to you in discussions, they will most often stress that their primary source of frustration comes from the internal pressures. Office politics is evident in any organization, but the worse the business performs, the more often people run for cover and begin finger-pointing. Being 3.000 miles away from the corporate decisions with all the new types of trouble is hard.
Pressure from the head office on the China management can be enormous. They have been there, they paid for the reports, they talked to some people at a banquet - there were no problems. When the failure set in, the Executive is left alone. Strong leadership is really needed in this case.
As the easy solution to failing results, the continuous change in foreign management is applied. Particularly when financial losses occurs, the HQ decides to cut-back on all expatriate suddenly. Action is carried out. After some time of consideration a new Executive enters the office in China. The lack of management consistency, causes local staff to act irrationally. Superiority is a durable concept for the Chinese. In their world and in our intent, it was the foreign manager that should train the staff and front the company in the market place.
Arrogance on the part of Westerners is another factor in the failure of foreign companies operating in China. Sometimes the foreign executives and staff meet China with an egotistical attitude. Patronizing attitudes like they have come to a developing country and are there to save the day by teaching their backward local staff how to be professional, without considering that they themselves probably have a lot more to learn than they can teach, is a problem.
On the other hand, communication problems are a two way street. Problems are also caused by local staff that due to face issues, will "sabotage" - sometimes painfully - the business operation.
There is no better way for a CEO to gain a proper grasp of the areas of the China market in which his company is active, than to evaluate them firsthand.