Doing Business In China: What factors have made some companies successful when it comes to doing business in this country.
Why some foreign-funded enterprise became successful, when entering the China market while others fail, and why some grow relatively faster than the rest?
Reasons to explain all these are complex and varied.
The following factors can determine how well or bad foreign-funded enterprise fare in China:
1. Establishment and implementation of enterprise’s development strategy. In China, successful MNCs and foreign-funded enterprise implemented long-term development strategy, adopting a long-term outlook for their business, unlike other unsuccessful companies which do not look far and only concentrate on short-term gains. Besides adopting a development strategy that is long time, the strategy was a flexible one to adapt to the changing market conditions. An enterprise needs to be flexible to react swiftly to any changes without affecting its business operations.
2. Leadership of the top management played a decisive role in deciding the success of the company. In face of greater competition brought about by globalization, management with stronger judgment, decision ability, adaptability and greater foresight, succeeded. Ability to look far is crucial in order to be ready at all times to react to any changes.
3. Nurture key competitiveness for the enterprise, and grow together with the economy. Those who treated their workforce with an open heart, cultivated the enterprise’s values and vision into them fostered togetherness and strengthened the organization.
4. The successful MNCs established main or Asian headquarters in key cities in China. Beside that, research and development centre, training centre and logistic base were also built. It’s vital for organizations to have a strong structure that effectively deals with its cash flow, flow of information and manpower movement in order to ensure its success in China.
5. It is essential for the foreign-funded enterprises to understand the China’s culture, especially regarding the culture of Guangxi (relationship), so as to be able to gain the popularity and trust of the Chinese population. With a good relationship, doing business is smoother and chances of failure are reduced. Its important to build stronger bonds with customers, suppliers and partners.
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