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Last Man Standing: China as Global Leader

Takeaway: As the US rapidly disqualifies itself from global leadership, China will find itself shoved into a role it doesn’t want it and isn’t ready for. We will almost certainly see a more China-centric world. Here’s what it may look like.  

What a difference a week makes. In my last article I spoke about 3 big issues China would face if it tried to step into the position of global leader.   In just a matter of days, however, the new US administration not only allowed it to happen, but seemed to be have been actively

Chuang Tzu and the Turtle
      Chuang Tzu tried to warn you

pushing the PRC into that role.

China went from the scrappy challenger who looked like a long-shot for the title to the last man standing in a remarkably short period of time. They’ve emerged as the odds on favorite by default.  The US has taken itself out of the global leadership game.  Europe looks fragmented and weak — and may very well end up following the US into isolationism. Russia is a military force. China is the last man standing and leads by default.

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Lessons from the G20 for “Regular” Negotiators

China’s treatment of the U.S. delegation as President Obama arrived at the G20 conference sparked controversy and a firestorm of international criticism. There are some great lessons here for front-line negotiators involved in cross-border deals.

Barack Obama ‘deliberately snubbed’ by Chinese in chaotic arrival at G20 – The Guardian

The US president was denied the usual red carpet welcome and forced to ‘go out of the ass’ of Air Force One, observers say

China chides media’s hype of G20 spat – Global Times

Overblown reports show arrogance: foreign ministry

Lessons from the G20 “tarmac row”

The conflict may or may not have been serious – but it was real. It says a lot about both the US and Chinese cultures. The Chinese infuriated the world with their hostile behavior. (Don’t be politically correct and insist on saying “perceived hostility”. Many people were angered by the way national security adviser Susan Rice was treated on that airport tarmac, and you may have been one of them. Own it.)  We infuriate the Chinese by talking about it publicly.

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China’s Super Consumers: What 1 Billion Customers Want and How to Sell it to Them by Michael Zakkour and Savio Chan – an excerpt

An excerpt from China’s Super Consumers: What 1 Billion Customers Want and How to Sell it to Them by Michael Zakkour and Savio Chan, published September 30, 2014 by Wiley

Michael A. Zakkour is a leading authority on Chinese consumption, consumers, branding, retail, and e-commerce as well as operations and supply chains in China. He is a principal at the global business consulting firm Tompkins International where he heads the “China/Asia Pacific Practice.  He is also a contributing writer at FORBES, CNBC and Entrepreneur magazine.

Click here to purchase China’s Super Consumers on kindle now

Contact Michael on twitter: @michaelzakkour

Orientation

 A nation’s culture resides in the hearts and in the soul of its people.

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Microsoft Fails by Trying to Coast on Past Successes in China

Relationship Building Not a One-Off Activity in China

10 China Negotiating Mistakes - Buy the eBook on Kindle
Learn from the expensive mistakes of expats who have come before you.

In ChinaSolved’s latest book, “10 Common China Negotiating Mistakes”, 3 on the least wanted is “coasting on good starts and early successes”.  While this is one of the biggest dangers that deep-pocketed MNCs (and their representatives” face in a long-term China business, it can be very hard to anticipate.  Fortunately for us (but unfortunately for them), Microsoft provides a telling case study of how the best efforts don’t always yield successful outcomes.

At the end of May, 2014, the Chinese government’s procurement office announced a ban on MS Windows 8 – the latest generation of the Redmond giant’s operating system and greatest hope of making the leap to touch-screen tablets and mobile devices.

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MicroSoft in China – Massive Schlimazel

Miscrosoft 8 Banned from Government Computers in a Surprise Announcement

According to every Yiddish speaking grandmother in the world, there are two kinds of fools  – schlemiels and schlimazels   The schlemiel walks into a busy restaurant and bangs smack into a waiter carrying a tray of hot soup, dumping it all onto a customer sitting nearby.  The schlimazel is the guy that gets dumped on.

10 China Negotiating Mistakes - Buy the eBook on Kindle
Mistake #4: Losing control of the agenda. Mistake #5: Training your own competition. Mistake #10 : Forgetting that it’s only guanxi until you get caught

Bill Gates of Microsoft is the schlimazel.

(Reuters) – China has banned government use of Windows 8, Microsoft Corp’s latest operating system, a blow to a U.S. technology company that has long struggled with sales in the country. http://www.reuters.com/article/2014/05/20/us-microsoft-china-idUSBREA4J07Q20140520

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Check out the US China Business Council Report on US exports to China

The US China Business Council has just published a great report on US exports to China.  It features and interactive map that breaks down exports by state for the last 10 years, and two downloadable analysis.  Spoiler alert:  Sales are up.  China is the US’ 3rd largest destination for US sales, right after Canada and Mexico.

uschina exports

Visit their site and download the reports here.

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Why it’s not OK to have never heard of Alibaba.

Lack of basic business intelligence is the #1 risk facing Western negotiators in China.

10 China Negotiating Mistakes - Buy the eBook on Kindle
Learn from the expensive mistakes of expat negotiators who have come before you…

Alibaba is grabbing headlines again for breaking new ground – again.  This week it’s a record setting IPO in NY (bigger than Facebook) — though it’s newly announced deal with ShopRunner may turn out to be even more significant in the medium-term.

Just to restate the obvious, Alibaba is already involved in a very large equity cross-holding deal with Yahoo and one of their major investors is Softbank.   The company has been around for 15 years, and for most of that time their iconic founder Jack Ma has been shuttling around the world, raising funds, making deals, and speaking at international A-list conferences.  Alibaba started out as an international B2B platform whose raison d’etre was to match Chinese sellers with international buyers.  Nowadays it is China’s most distinctive brand, responsible for selling or moving roughly half of every online transaction in China (which the World Bank just ranked as the world’s largest economy).

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China and EU Resolve Wine Dumping Charges — Just as Xi Jinping Winds Up EuroTrip

China mixes trade and politics in Europe – and underscores the futility of building win-win relationships.

The SCMP (among others) ran the headline: China, Europe reach deal to end Beijing’s anti-dumping probe of European wine just as Xi Jingping is winding up his European tour. This was a Learn to negotiate in China with China Sooveslightly less dramatic headline than “China takes firm stand against Russian land grab” which we are unlikely to see, or “Chinese economy shows new signs of weakness” – which are seeing far too much of.

If you have trouble remembering just what the China -EU Wine Dumping case was all about, think back to May and June of 2013 when the EU threatened to discuss hitting China with trade sanctions about Chinese dumping of solar panels, and China retaliated by claiming the EU was using unfair trade tactics to sell wine to China. Here’s the piece ChinaSolved ran on the subject last year: Living to Fight Another Day? China vs. EU is Bruising Loss

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Strategize Globally, Implement Locally

Your strategy becomes my tactics – but you have to stay in control of HOW and WHEN

We’ve been talking about the importance of developing good strategies and understanding Sign up for the China Solved China Negotiation newsletterwhere strategy ends and tactics begin.  I’m using a simple but workable set of definitions — strategies deal with goals, asset development & allocation, and longer time frames.  Tactics are methods for reaching goals, deal with spending or earning, and usually take place within a shorter time horizon.

Strategies should be developed at the Board or CEO level, and integrate on a global level.  Tactics must support and address your global strategy, but have to be adjusted for local business envirnoments and current economic realities.

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Western Negotiators in China Can Learn from the US Gov Shutdown

Post-agreement negotiation is the scandal of the week in DC, but it’s a way of life for negotiators in China.

Sign up for the ChinaSolved newsletter Western negotiators with China experience are all too familiar with a situation that MSN and Fox are just discovering.  Not all deals are set in stone after the signature is on the bottom line.  The Democrats in Washington are shocked and outraged that the healthcare deal they thought was a “done deal” is up for debate again.  Western negotiators in China have been to this rodeo before, but still find it challenging and frustrating.

ChinaSolved presents a pragmatic, ideology-free guide to managing the post-agreement negotiation in China.    

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