Find new opportunities in old Chines partnerships.
Americans doing business in China have a tendency to search out common ground and familiar norms. Last week we looked at some of the dangers of this approach in the ChineseNegotiation.com post “Why Common Ground Isn’t” . Another problem with this “common ground” approach is that it can cause managers to overlook some potentially lucrative opportunities. One of my favorite teams of authors in the area of negotiation is David Lax and James Sebinius (SebLax) who wrote 3D Negotiation and Manager as Negotiator. They championed the notion of creating value by dovetailing differences. Instead of trying to base deals on things that you have in common with potential partners and counter-parties, look for ways that you can capitalize on your differences and create new opportunities for both sides.
One of the most exciting commercial prospects for Western brands is developing the Chinese consumer markets. As many have already learned, though, this is not a quick or easy path. Plenty of Chinese distributors and retailers have well-established marketing channels in place, but dealing with them can be difficult and dangerous. The risk of IP theft & counterfeiting are real concerns – especially since Chinese partners can quickly turn into international competitors. These risky Chinese partners, however, often have the same ambitions and fears about you and Western markets. Chinese businesses – and business owners – are anxious to set up operations in the US. Hey – aren’t you from the US? Handled correctly, there may be opportunities for cooperation – and once the Chinese side has assets and agreements based in Western jurisdictions, their risk profile looks a less threatening.
Dovetailing Differences can Work in China
Dovetailing differences is a powerful concept that travels well – but you have to get past your instinct to hunt out seemingly safe, comfortable partners who have much in common you.
Finding value in differences works with both potential and existing partners. When Western brands are considering entering the China markets, it’s important to look beyond the familiar coastal cities like Shanghai and Shenzhen. There is real action in the third and fourth tier cities, but local customs and practices will be even less familiar than in international commercial centers. Many potential partners in less developed areas will be a bit rougher around the edges and more challenging to do business with than the sophisticated MBA types in Shanghai – but that’s where the value is. Prepare in advance, do your research and learn how to work with translators. Then head out to countryside. The food and air are probably a lot better and in Beijing or HK.
But there is also plenty of value to be discovered and unlocked with existing partners. It is always the right time to discuss one another’s goals and ambitions – but this time instead of focusing on your shared vision, make an effort to see how your differences can create new opportunities. Your next business venture may take you some new provinces in central China – or they may take you right back home to your own backyard.
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