Is China Quality An Oxymoron?
February 19, 2008
The transformation of China from rice bowl to iron bowl has been done expediently. For example, in 2000, 30% of the world’s toys came from China. Five years later, this had increased to over 75%.
China increasingly dominates manufacturing in industry after industry. Over the last decade, China exported one out of every three pairs of shoes in the world. Between 2001 and 2004, China’s auto parts exports increased from $1.3 billion to $9 billion. In 1996, China exported $20 billion worth of computers, cell phones, CD players and other electronic devices. Eight years later China exported $180 billion worth.
As the West’s craving for products from China has grown, the cost of poor quality has increased at proportional rates. In recent years, there have been a number of massive recalls of Chinese-made products, from pet foods to toys to consumer electronic goods. Read more… »
10 Power Tips For Global Execs
February 1, 2008
In a globalized world, best practices are sometimes overshadowed by expedient policies. This trend attenuates organizations at the core and leads to sky-high attrition rates and substandard performance.
However, at the foundation of laudable organizations regardless of age, culture or revenues, best practices are endemic. With the economies in Asia burgeoning, some executives find it hard to instill the elementary, yet crucial, practices that are the building blocks for long-term success. Read more… »
Is Vietnam A Luxury Market?
December 19, 2007
In what it described as a "dazzling debut", German automaker Porsche has launched its full range of sports cars and SUVs through a new showroom in Ho Chi Minh City.
According to the company’s press release, “The time for Porsche in Vietnam is now,” said Mr. Andreas Klingler, General Director of Prestige Sports Car Company. “Drivers in the high-end market are now looking for more than just average luxury vehicles."
Drive a Porsche in Vietnam? Not so fast …
Anyway, the point isn’t that the traffic in Vietnam is horribly congested, although it is. What’s significant about the Porsche debut is that Vietnam now has enough "drivers in the high-end market" to attract one of the world’s most exclusive and expensive brands of automobiles. Read more… »
How Global is Your Organization?
December 12, 2007
Here’s a useful way to assess the global strengths and weaknesses of your organization. First, print out this page. Then, for each of the following statements, assign a score of "1", "2", or "3" according to how well they describe your company: 1 if a statement is false, 2 if it’s somewhat correct, or 3 if it’s true.
- In order to create an overall corporate “glue,” our organization devotes a large share of its resources to global executive development
- Global experience (actually living and working overseas) is considered essential to a successful career in our organization
- A considerable number of our employees live outside the home country
- A sizable percentage of our investments lie outside the home country
- The power of our subsidiaries is considerable
- Non-home-country executives are well represented on the board
- Our language of business is predominantly English
- The members of the executive board have extensive overseas experience
- The organization is very experienced at handling expatriation/repatriation issues and offers executives considerable help with transitions
- We invest in preparing our executives for foreign assignments
- In considering people for assignments in countries other than their own, we look at many factors other than technical/functional expertise
- We lose very few of our executives due to unsuccessful foreign assignments
- Our organization doesn’t favor home-country nationals for fast-track careers
The higher your score, the more your organization tends to be global. Please feel free to share your scores and questions with International Innovations.
Specific scores are privileged information. However, if you find your score below 25, it is reason for concern if your organization is global. In the case where you’re planning on going global, these areas are paramount in the process.
For more information, see our other articles about organizational development.
China v. India: The Battle of the Titans
December 9, 2007
As China has been the dominant low cost solution for the manufacture of consumer products, so too has India for IT and Business Process Outsourcing (BPO), especially since the burst of the technology bubble in 2001. The duality of these economies is based on the practice of many US based companies to invest in China as the manufacturing powerhouse and India as the software powerhouse.
Companies making their initial entry into Asia, or looking to expand beyond the borders of China, may find India a very compelling place for high technology investments and lower costs. On the surface, India does not necessarily look like a major economy or an attractive place for a US company to setup a manufacturing operation. India’s infrastructure is poor, its traffic is chaotic, its policies and bureaucratic processes stifle development, and it is home to rampant corruption. Read more… »
Developing The 21st Century Executive
November 22, 2007
Mediocrity knows nothing higher than itself, but talent instantly recognizes genius.
Sir Arthur Conan Doyle (Sherlock Holmes)
It is no great secret that the globalized corporate world is engaged in a war for talent. Nearly all companies go through the time consuming process of deciding whether to focus on homegrown talent or acquire talent from the market.
As a best practice, a 70/30 blend of homegrown v. free agents is recommended. This is true when the organization invests in their homegrown talent from the inception, and this is why it is essential to infuse systems of leadership and communication into the everyday working culture of the people in the organization.
In many large firms, there are tremendous knowledge gaps from office to office. Bringing in high-flying talent from the market is essential, but doing so can attenuate an organization with a sub-standard corporate culture if that individual doesn’t mesh well with the team. Read more… »
Video: Introduction To II-Asia
November 17, 2007
In our first video post, Ravi Sastry talks about his early experiences in Asia, the emergence of China and India as low-cost producers, and the opportunity for smaller companies to benefit from having an Asia presence.
Click on Ravi’s picture to play the video ….
Market Research: Expense or Investment?
November 17, 2007
Custom market research costs money. How much depends on the scope and complexity of the work to be done and the format in which the findings and recommendations will be delivered.
Some companies, especially smaller ones, tend to view market research as an expense. By that I mean that when they’re considering whether or not to conduct a research study, much of their attention is focused on the cost. "Can we afford to do this?", or, "Can we get the price down?" That sort of thing.
In my experience, companies that focus on the expense of market research don’t pay enough attention to the impact that the research can have on their business. They "control" the cost, but fail to get as much benefit as they could. Read more… »
Opening A Vietnam Rep Office
November 3, 2007
The Representative Office (RO) is the most simplified structure for gaining a toehold in Vietnam. The strategy behind the RO is to make a minimum investment as you learn about the inner workings of the country, understand the costs, established a market channel, and investigate the capabilities of the people. Following are the key step required for opening an RO in Vietnam.
Establishment of the RO
To establish a representative office in Vietnam, a foreign company must apply for a license issued by the Provincial Trade Department, and complete post licensing procedures including notice of operations and obtaining a seal. Application files for establishment of the representative office must be submitted to the Provincial Trade Department. To obtain a seal, the chief representative of the representative office or its staff may be required to personally lodge the applications due to security reasons. The following documents must be submitted to the licensing authority for obtaining the License: Read more… »
4 Infrastructure Options For Vietnam
October 14, 2007
In our first segment about Vietnam, we gave you key facts about the country, including some useful comparisons between the costs of doing business in Vietnam and China. As you consider your initial infrastructure investments in Vietnam, it will be important to evaluate various options for establishing an entity there.
Depending on your objectives, each option will have advantages, disadvantages, and varying degrees of complexity. The four most common approaches for establishing an entity in Vietnam are:
- Representative Office
- Branch Office
- Joint Venture Company
- 100% Foreign Owned Company
Let’s take a look at each of these approaches in more detail. Read more… »