By: Paul Hesselschwerdt
Global Partners Inc. has just completed a 5-part series on Doing Business in Asia. Our intent was to help grow your business in Asia through timely and thoughtful pieces to help guide companies on the importance of understanding different cultural dynamics of key Asian countries.
Along the way, we came across others who are writing thoughtfully on this topic. They were a help to us so we wanted to share these resources. They might be of help to you. Just click on the titles to view the articles and blogs that helped us.
- Harvard Business Review: What the West Doesn’t Get about China
- Venture Japan: Direct Sales in Japan
- Global China Blog: 30 Guidelines for Doing Business in China
- Foreign Entrepreneurs in China: 10 Reasons Why Your Chinese Employee is Leaving You
- Technomics Asia: Wealth through Health – A Path for Business Success in China
- Gordian Business: Seize the Opportunity of Turbulence
- Strategic Accounts Management Association: How can SAMs Overcome the Challenges of Helping their Customers Grow in China?
We’ve also published a Free ebook around this series called Growing Your Business in Asia: A Guide to Effective Selling, Marketing, Branding and Leadership.
Adapting to the culture of different countries is key to success in growing your business in Asia. Are these resources helpful to you? Any stand out? Let us know and, if you know of any other resources, please send along a comment. We’d like to learn from you.
By: Paul Hesselschwerdt
None of us need to be reminded of the pace of growth in China, actually China and greater Taiwan as it is sometimes called, particularly in technology segments. For example, production of semiconductors has shifted so significantly to Asia, particularly China and Taiwan, that these two counties now account for nearly half of all world-wide production.
In discussions with sales and marketing people working for one of the top 5 semiconductor companies, it is interesting to note the differences in how they think about meeting their customer needs vs. how their counterparts in the US and Europe do.
In western countries, for example account managers often focus on creating value for their customers by helping to impact the top line of their customers through products that enhance the performance of the end customer product. Using technology to improve the performance of the latest iPhone or LED television ultimately creates innovations which drive higher prices and margins for manufacturers.
In discussions with account managers in China and Taiwan we hear a different story. There, customer value creation focuses significantly on the manufacturing process. This is not surprising, given that many new product designs are done in the west, where customers are looking for innovative designs; whereas the manufacture of those innovative designs is often done in China, Taiwan, Korea or Singapore.
Here are 4 areas where western countries need to adapt their selling and marketing approaches in order to succeed in China and Taiwan:
1. PRODUCT POSITIONING: Sales and marketing people and their managers working in China and Taiwan need to remember that creating value for customers there means focusing more on reducing manufacturing costs and improving overall supply chain costs and efficiencies. This has implications for product positioning, value selling and competitive positioning, all of which should be adapted for the local markets;
2. COMPETITIVE DIFFERENTIATION: Pressure on supplier’s prices, which is a challenge in most markets, is especially difficult in China and Taiwan. Nevertheless, suppliers can create competitive differentiation in areas that enable them to compete on factors other than price. These include positioning total supply chain costs (vs. simply part price), providing local support in engineering, design and supply chain and promoting their company’s global capabilities;
3. SALES GOALS AND STRATEGIES: Most importantly, western managers need to accept the significant differences of doing business in China and adapt accordingly. This will have implications for managing distribution channels, establishing sales goals and strategies, pricing and even sales compensation plans.
4. NO LONGER JUST EXPORT ECONOMIES: Western companies need to recognize that China and Taiwan are no longer simply manufacture for export economies. A recent report in the Harvard Business Review pointed out that “the combined flow of shipping containers between Asia and North America and Asia and Europe is already less than the flow among Asian countries, with much of the latter consisting of goods imported to China.” In other words, the Asian economies, led by China have established their own regional trading bloc.
The good news is that profitable growth is available for companies that recognize the new opportunities in China and Taiwan and adapt their sales and marketing strategies to reflect the unique elements of doing business there.
How are you planning to capture it?
image credit: gp314
By: Michael Wolf
It may be a simple question, but in my more than 20 years of executive level sales management experience I have heard too many times how sales people answer this initially with a “yes”, only to change it to a “I guess not” after they have lost the sale. This especially amazes me in today’s business environment where winning every deal can be critical to the survival of a business.
Several years ago I was VP Sales for a company in the semiconductor equipment business. We had a very large opportunity at a new account in Asia, and the Regional Sales Manager (RSM) had been assuring me for the past several weeks that his Account Manager had things under control, that we were going to win this very competitive order worth well over $5M, and that the order would be received by the end of the month, just a week from then. Having learned from experience, I never accepted these status updates as fact until the order was approved, signed off, and booked, and I never counted on the revenue until the equipment was delivered, installed, accepted, and paid for. But for some reason, this time I had a “bad feeling” that something was wrong, so I decided to call the Account Manager (AM) in Singapore directly, so I could ask him some questions about this opportunity.
By the time I reached him, his RSM had alerted him that I would be calling regarding this opportunity, so he was prepared for me. I asked him to tell me about the sale’s progress and current status, and to tell me whom he had been dealing with at the account. After listening to him for about 5 minutes, I became extremely concerned for the following reasons:
- He had been dealing mostly with the Production Manager. Not very high up for a $5M deal.
- The Production Manager had introduced him to the Plant Manager who claimed to be the decision maker. When my AM had suggested that the Plant Manager introduce him to the Operations VP, the Plant Manager had said there was no need to meet the Operations VP, because he was “just a rubber stamp” once he, the Plant Manager had made the decision. My Account Manager had accepted that, and moved on.
- We had already invested a lot into this sale, with a demo system installed and operating there, so I asked my AM what decision process the Plant Manager would use to make his decision. He didn’t know. He had not asked since he didn’t want to upset the Plant Manager.
- When I then asked the AM who had to sign off and approve this order he told me that it was the VP of Finance, the CFO, who reported to the President. None of us had ever met either person!
By this point I realized that we were at serious risk of losing this order because:
- the Account Manager was calling too low in the account;
- he had allowed the Production Manager to block him from going higher;
- he did not understand the decision process that would be used;
- he was assuming that the Plant Manager was the decision maker; and
- he did not know, for sure, who the real decision maker was, and had not even met with either of the two possible decision makers.
And, there was less than one week to correct all of this.
Unfortunately, this true story had a bad ending - we lost the order. It turned out, following our lost order analysis, that the Operations VP was the real Decision Maker; the CFO was a Gate Keeper in that the total purchase allocation was capped at $5M, and because of the size of the order, the President had to approve it and sign off. We had never met the really important people: the Operations VP, the CFO or the President!