Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
DEVELOPING A SUCCESSFUL BUSINESS IN ASIA The Chinese Dragon, The Indian Elephant and the Asian Tigers all beckon DEVELOPING A SUCCESSFUL BUSINESS IN ASIA • Asia provides tremendous opportunity for growth and profits • If you have a unique product or service and wish to expand outside the US. You should seriously think about entering Asia REGIONAL GEOGRAPHY • Many Multinationals divide the globe into 3 or 4 major Regions for Management and Reporting purposes. Asia Pacific is one of these major regions • Asia Pacific covers the countries in North Asia, South East Asia ; South Asia as well as Australia and New Zealand. • Key countries are China, Japan, Taiwan and Korea in the North; India ,Pakistan and Bangladesh in the South; and Thailand, Philippines, Vietnam, Malaysia and Indonesia in the South East. • Asia Pacific covers a vast area MEGA MARKET • Total Population is 3.8 Billion People…more than half of the world’s population • Just India and China have one third of the world’s population • Mega Cities…..Beijing and Shanghai each have populations of 20 million people. • High Proportion of Young People in China and India • Graying Population in Japan and Korea ECONOMY AND PURCHASING POWER • • • • GDP of Asia Pacific is larger than that of the US China has passed Japan with an annual GDP of $5 Trillion Purchasing Power Parity (PPP) China has a PPP of $8,000 per yr and India has a PPP of $4,000 per year • Asian Tigers are growing at 6%/yr • Normal growth for China is 11%/yr and for India 8%/yr • Economies changing from export based to local consumption based ECONOMY AND PURCHASING POWER • Target Market is usually the middle class • Middle Class in China and India number about 300 million people in each country • China has passed the USA as the largest automobile market in the world (14 million vehicles produced last year) • Major Opportunity for US products & services RELIGION • Major Religions are Hinduism, Buddhism and Islam • Hindus…..1 Billion • Muslims…600 Million • Buddhists…The Rest (Buddhist based) CULTURE • Asian Culture is based on the two oldest cultures in the world…the Chinese and Indian cultures • Businessmen of Chinese origin dominate in Indonesia, Malaysia, Thailand and the Philippines • Family Unit is all important • 3 Generation living under one roof • Education is all important. Enormous dedication to school and grades BUSINESS CULTURE • Generational and Family Owned/Run • Chaebols in Korea like Samsung, Hyundai, Lotte and Daewoo • Conglomerates in India like Tata, Birla, Modi • Business Management may be Autocratic and Dictatorial CULTURAL SENSITIVITY • Respect for other cultures • Business Deals are concluded only after the Asian partner gets to know you. This may take time and often includes Lavish Dinners • Golf is now very popular and is an relaxed way to get to know your Asian business contacts CULTURAL SENSITIVITY • “Face” is very important to all Asians • “Losing Face” is considered very humiliating and could lead to termination of a business agreement or employment • Touching someone is not liked……. example of Indian and Thai salutation • Yes may sometimes mean No..watch for body language and facial expression • Eye Contact..looking down is considered respectful CORPORATE VALUES • Be clear about your Corporate Values • Be clear about your Business Ethics • Draw a solid line on where you stand with respect to business practices • Asians will respect your principles 4 BUSINESS MODELS • Forming a wholly owned subsidiary is the best structure to establish • Joint Ventures are common and is mandatory in some countries/business segments. Avoid a 50:50 Joint Venture • Using Distributors is another model..however try and appoint several distributors per country • Simple Export sales to buyers in Asia PLAN THE WORK AND WORK THE PLAN • Research is critical to success. Do basic research and get the facts w.r.t the Consumer, the Customer, the Competition and the Distribution Channels • Have a realistic Vision and set realistic Targets • Build a Robust Strategic Plan. Develop Product Strategies, Marketing Strategies, Sourcing Strategies and Distribution Strategies • Support the Plan with Top Shelf people who will execute with excellence. THINK GLOBAL AND ACT LOCAL • Past practice for many multinationals was to have autonomous subsidiaries operating in Asia. While not globally efficient this approach was effective in developing the local markets with tailor made products • Recent practice is to sell identical products in all Asian countries with the same formulation, the same label and the same advertising. • Has the pendulum swung too far?? Local companies are gaining share as they are more sharply positioned. HUMAN RESOURCES • Executive Quality has improved considerably • World Class young Asian Executives with MBA’;s • Expats are very expensive and generally not recommended • Upper Level Execs in China and India may earn more than their counterparts in the USA ENTRY STRATEGY FOR CHINA • • • • • • 160 cities with a population > 1 million Tier Strategy is recommended Tier #1: Shanghai, Beijing, Guangzhou and Shenzhen Tier #2: 13 Cities Tier #3: 20 Cities Strong Brand Identity is critical for success in China (McKinsey Study) • Environment friendly products will have a Plus • Consumer communication should focus on functional attributes .