1. Lecture 10 International Operations of Chinese Enterprises

2. Chinese Enterprise’s Forms of Ownership
State-Owned Enterprises (SOEs): central or local government owned business
Major transportation: motors, planes, ships, railways & trains, national freeway network, airlines, etc;
Financial services: banks, insurances
News & publications: TV & broadcasting, newspapers, press, publishing house, etc.
Public services: hospitals, educations, power and water supply, etc.

3. Hi-Speed Train (350km/h)

4. China’s Big Plane Project to Compete with Airbus & Boeing

5. Chinese Enterprise’s Forms of Ownership
Private enterprise
Town & village owned
Family-running business
Public listed companies (Shenzhen, Shanghai)
Joint ventures
State-foreign (very important ones)
State-private
Private-foreign
Wholly foreign-owned enterprises: hi-tech,

6. Organizational Structure and Leadership
Private enterprises
Town/village owned enterprises:
Family running enterprises: blood linkages, relatives and friends
Public listed: as in the west
JVs or FOEs
By the board or negotiation.

7. Management styles
SOEs: double-headed management, normally the party leaders are the top leaders.
Management styles: mostly autocratic for SOEs or private companies

8. Public relations & Internal Communications
PR is very weak:
No official PR officers, normally by the party or company leaders.
Is not considered as important
Internal communications:
Hierarchical
Paper works, documents
Gossips

9. Chinese enterprises’ global strategy
Drivers for Chinese enterprises’ globalization:
Energy & resource oriented
Technology, R&D oriented
Brand oriented
Market oriented
Cost oriented
Overcoming the trade barriers

10. The strategic choice of Chinese International Business
Import & export
Joint venture in world
M&A overseas: Lenovo – IBM PCs dept., TCL – Thompson, Haire –GE household appliance (potential), etc
Greenfield plants: Haire worldwide, Huawei
Strategic alliance: China Southern – KLM – Air France
Government’s role of promotion:
Investment in Africa
Cultural promotion: the Confucius Schools worldwide
Innovation

11. Haier
Founded in 1984 in Qingdao Shandong
The most famous corporation in China
The second powerful trademark in household-electric in 《Forbes》

12. Difficult first easy second
Globalization
Difficult first easy second
Market develop
Trademark develop
Investment
Investment
1/3 domestic product sold in China
1/3 domestic product sold oversea
1/3 product made oversea sole oversea
Haier `s globalization turn to globalized Haier

13. The measures in the process
Globalize their mind
Globalize human resource
Globalize the product
Globalize the technology
Go to the oversea
Core power
Haier college
Globalize the market
Globalize the net
American
Customers` market
Indigenize the manager
Turn to the service
Research center
Creativity
Europe
Globalize the system
Quality is the trademark
Globalize direction
BPR
difference
ISO9001

14. See more clearly

15. About Lenovo A Worldwide Leader In Technology
Lenovo is an innovative, international technology company formed as a result of the acquisition by the Lenovo Group of the IBM Personal Computing Division.
As a global leader in the PC market, Lenovo develops, manufactures and markets cutting-edge, reliable, high-quality PC products and value-added professional services that provide customers around the world with smarter ways to be productive and competitive.

16. Motivation of Internationalization
Less developing space in domestic market
ailure in diversification →go back its main business
E.g. Lenovo Chairman Liu Chuanzhi shakes hands with IBM Vice President John Joyce after signing an agreement in Beijing, Dec. 8, According to the agreement, Lenovo will acquire IBM's entire global desktop and laptop computer R&D and marketing business at the price of US$1.25 billion.

17. Steps of Internationalization
Change to new logo in Internationalization strategy needs an international brand
Legend + NOVO =
LENOVO
Become an Olympic TOP
Acquire IBM PC

18. Lenovo Chairman Liu Chuanzhi shakes hands with IBM Vice President John Joyce after signing an agreement in Beijing, Dec. 8, According to the agreement, Lenovo will acquire IBM's entire global desktop and laptop computer R&D and marketing business at the price of US$1.25 billion.

19. Benefits and Risks of the Deal between Lenovo and IBM
A Win-Win Deal
IBM: chance for more software, services and consulting deals in China
Lenovo: becomes a global player quickly
Risk in three areas
Customer integration
Cultural integration
Brand integration

20. China’s Lenovo is going to be the world’s Lenovo
A worldwide partner for the 2008
Beijing Olympic Games and
global Torch Relay
Lenovo and the NBA unveiled
the Lenovo Stat to tip off
the 2006/2007 NBA season
Lenovo has partnered
with AT&T Williams of
the Formula One circuit

21. Some challenges for China’s MNCs in the world
Food and product safety
Quality and brand image
Environmental protection
Human rights, labor laws or social/business ethics, etc
R&D, Innovation ability
Economic nationalism and protectionis

22. Sectors of opportunities in China
Service: financials, tourisms, transports, etc
New and Hi-tech products: software, IT, electronics, etc
energy and environment: nuclear power, waste treatment, etc
health-care: medical instruments, hospitals, nursing houses, etc