by Fons1 via FlickrChinese companies are preparing to buy assets abroad to make use of the global financial crisis, writes Shaun Rein in Business Week. Qingdao-based Haier was the first to move, but many others are following, his research suggests many are following:
In the last few months my firm, the China Market Research Group, has conducted more than 500 interviews with senior executives from 100 leading Chinese companies in 10 industries, from consumer products to clothing to food and beverage. We found that more than 70% of large industry leaders have already made meaningful steps toward global expansion, as have more than a third of smaller industry leaders. Most companies said they expected to increase their plans for international expansion in light of the global turndown.
But it is not an easy road, Shaun Rein writes, where Chinese companies are making similar mistakes like foreign companies made when they entered the Chinese market.
A case of a company doing a weak job when expanding internationally is sports apparel makerLi Ning. Although it competes head-to-head with Adidas and Nike (NKE) in China, and gained worldwide fame for having Li Ning himself run around the Bird’s Nest to light the Olympic flame, the company has not made great inroads into the U.S. because of subpar marketing. In China, Li Ning positions itself as the best Chinese brand rather than a good-value brand or the most innovative brand, but that is not a strategy transferable to the U.S., where Li Ning himself has low name recognition.