China Herald: IBM

Wednesday, May 23, 2012

Why China bought American movie theaters - Shaun Rein

Shaun Rein

Wanda's purchase of AMC Theaters raised more than a few eyebrows in the US? Is China buying a backdoor to execute its soft power? Business analyst and author Shaun Rein explains in Foreign Policy what is behind this and other high-profile corporate purchases by Chinese companies.

Shaun Rein:

Unlike Japanese companies in the 1980s, which believed in the superiority of their own management techniques and sought to replace senior teams at American firms they bought out, most Chinese companies are keenly aware that they lack international-standard best practices. They acquire companies primarily for brand equity and as a learning opportunity. When Lenovo bought IBM's ThinkPad line, then the largest producer of laptops, there were few layoffs; Lenovo actually hired executives from Dell to run operations...

Wanda's acquisition, like China Bright Food's purchase of the British food brand Weetabix and the Chinese auto company Geely's purchase of Volvo, shows Chinese brands want to acquire global brands rather than the painful, often multi-decade process of building them organically. Chinese companies have the cash and ambition to expand overseas, and are not afraid to do so through mergers and acquisitions. They are looking to become "truly global" -- as Wanda chairman Wang Jianlin recently said the AMC deal would make his company. Americans need to be ready for more of these purchases and understand that Chinese companies are looking out for their own profit and loss column.

More in Foreign Policy.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

More on Shaun Rein and The End of Cheap China, at Storify.

The opportunities of "The End of Cheap China" - Shaun Rein (chinaspeakersbureau.info)
Chinese consumers go for real, not fake - Shaun Rein (chinaherald.net)
Top-10 most-read stories in May 2012 (chinaspeakersbureau.info)
A government-organized slowdown - Shaun Rein (chinaspeakersbureau.info)
Apple still lagging in China - Shaun Rein (chinaspeakersbureau.info)
Pollution, food safety haunt China consumers - Shaun Rein (chinaspeakersbureau.info)
Rising wages will disrupt supply chains - Shaun Rein (chinaspeakersbureau.info)

Thursday, January 13, 2011

The holy grail and China's business management - review

Jack Ma speaks during The Future of the Global...

Jack Ma of Alibaba via Wikipedia

As China's economy keeps on moving upwards, and the West is still hoping the worst of the financial meltdown might be over, the quest for what makes China's business tick is heating up. In China's Management Revolution: Spirit, Land, Energy, Charles-Edouard Bouee uses the power behind consultancy agency Roland Berger to embark on his search for the holy grail of China's management revolution. And possibly into the question why the MBA-induced management strategies are failing.
He warns us in advance for those who hope there will be a holy grail: the evidence of its existence is still very frail. It takes us well into the second half of the book, before the first building stones are discovered.
Zong Qinghou of Wahaha tells us how he prefers salary reductions over dismissals to face a crisis; unfortunately for the interview his fight with Danone is off limits. Jack Ma of Alibaba explains how he uses tai chi in a management setting. Although his fight with Yahoo and Ebay could have been more interesting to support his case. And Liu Chuanzhi saves his company Lenovo (former Legend), after a merger with the PC department of IBM seems to head for a multicultural disaster.
Now Michael Porter's Five Forces might have outlived themselves, seeking for the secret behind the Chinese management culture is potentially interesting. Was it not the Japanese culture of Just-in-Time (JIT) that not only explained why a section of Japan's manufacturers worked more efficiently, but also provided Western producers good tools to revolutionize their production processess?
Unfortunately, China is not yet giving away its secrets yet and - as the author sights - often well-placed managers of successful Chinese companies have often no clue what they are doing better. In the process he offers us names and faces of a new generation of Chinese business gurus that only seldom make it into Western media, like Zhang Lan of the restaurant chain South Beaty and Feng Jun of the electronics producer Aigo.
If there is a holy grail of China's business management, asking those people questions is the only way to find it out. One day, when we learn to ask the right questions, we might even get the good answers. If they are willing to answer those questions.