Scenarios and Strategy
Groups, companies and institutions have each reached the conclusion, in their respective areas, that China today has a key role in the world balance of power from a geopolitical, economic and social standpoint.
For this reason, each group, company and institution must necessarily take China into consideration when undertaking strategic planning. If the strategic plan intends giving China a key role, objectives, results and actions for the strategy must be assigned; if the strategic plan does not assign China a leading role, the impact of these decisions on the profitability—if not the very survival—of the business itself must be calculated.
An organization which assigns China a major role must face:
- A country system with a strong, visionary leadership capable of undertaking major lobbying activity on an international level.
- An economic system increasingly competitive in the supply of raw materials.
- A highly-competitive, dynamic domestic market undergoing a process of continuous change. Just over twenty years ago, the Chinese market was virtually closed to the west and there were no commercial structures. In just a few years, commercial and distributive roles (wholesalers, agents, importers, distributors, etc.) have been created from nothing. This turbulent phase of birth and change in the entire commercial-distributive system is still in progress and for this reason requires close monitoring.
Today, this new market presents a number of features:
- Extremely rapid economic life cycles and often quantum leaps in the nature of demand.
- An industrial system in rapid expansion in all sectors (light and heavy industry, electronics) and in the process of repositioning towards sectors and processes with enhanced value added.
- Constant push towards the relocation of manufacturing industry to more internal areas of the country (or even other Asian countries) for manufacturing with lower value added.
- Admixture of public and private. Even though private business is undergoing rapid development, national and local governmental bodies still have significant opportunities to influence the actions of private companies.
- A different system of authority and how it is wielded. For centuries in China, the real seats of power have been elusive, mysterious and hidden. This is still the case in both public institutions and large companies where understanding who truly has the final responsibility is not easy.
- Mental and perceptive maps that are profoundly different and which have their origins in a language and culture that must be understood even before they are learned.
For these reasons, any China strategy must start from a profound understanding of the system of the country and the macro and micro trends underway in order to de-codify all the complexities and be able to seize the opportunities. This holds true for:
- Companies whose objective is to win a major share of a local market undergoing strong expansion and in search of increasingly sophisticated industrial and consumer goods.
- Groups wishing to optimize their global presence and glean maximum benefit from all China has to offer both in terms of competitively-priced manpower undergoing a major specialization process, as well as local brain-power with a different outlook and able to best interpret the desires of a potential market of over one billion consumers.
- Institutions whose intention is to support internationalization of the industrial system of their own home territory or attract direct foreign investment from Chinese groups/companies.
The European House-Ambrosetti services in China
The European House-Ambrosetti group has been active in China since 1985 and has assisted over one hundred Italian and European companies to enter and grow in this market and in which it has created its own network of top-level governmental and business contacts.
The European House-Ambrosetti group has a branch office in Beijing as well as a studio specializing in Chinese law, Ambrosetti (Beijing) Consulting Ltd., which works out of its own offices in Beijing and Shanghai. Through these offices, out of which operate Chinese and European consultants of a range of seniority levels and with training and professional experience on an international scale, The European House-Ambrosetti is the first Italian consulting firm to provide management consulting to Chinese companies.
Through its own Chinese consultants, The European House-Ambrosetti also assists those Italian and European companies who already have a significant presence in China and are looking for strategic and organizational assistance for their firms.
In China, The European House-Ambrosetti offers the following professional services, by specific sector when required:
- Strategic market positioning.
- Scenario analysis.
- Formulation and evaluation of new strategic directions.
- Verification of economic-financial investment feasibility and preparation of the profit-and-loss statement forecast.
- System for strategic choices and operational planning.
- Analysis and support in the selection of the best location.
- Intelligence on the competition.
- Assessment and evaluation of targets for joint venture and acquisition.
- Assistance in external growth operations (M&A) and post-acquisition management.
- Total, long-term advisory services to assist top management in running local operations and react in real time to context changes.
Attractiveness and territorial strategy
- Assistance to local Chinese bodies and institutions in drawing up a strategy for their region.
- Support in developing strategies for promoting the local area.
- Support for national, regional and local investment agencies in scouting and help for investment requests from Chinese groups/companies with the goal of generating Foreign Direct Investment (FDI) into a targeted area.
Marketing and communications and market development:
- Marketing and sales plans.
- Planning and/or optimization of the sales network.
- Targeted lobbying with Chinese institutions and entities.
- Brand check and brand repositioning.
- Consumer analysis and consumption trends.
- Planning of focus groups operationally organized through support from external partners and analysis of results.
- Mitografia® (symbolic analysis to comprehend product requirements and positioning).
- Services for purchasing, production and physical distribution management.
- Operational risk and security management.
- Reconfiguration of the operational structure and process optimization.
- Planning and creation of integrated logistics systems.
- Development of project management systems.
- Creation of decision-making support systems.
Organization and Human Resources
- Organization and processes.
- Goal parameters for each position of responsibility.
- Human resource development and management systems.
- Control systems (strategic, management, operational).
- Assistance in trans-cultural relationships.
- High-level training for management (including expatriate).
Finance, control and value
- Design and implementation of planning and control systems and related information flows.
- Value-Based Management.
- Evaluation of the company/company branches.
- Coordination of professional services (accountants, lawyers, tax consultants, etc.).