CHINA OVERVIEW President: Hu Jintao (Since 2003) Location: Eastern Asian with area 3.7 million square miles. Major cities: Beijing (Capital), Shanghai, Tianjin, Guangzhou, ect……………… Sources: (China Daily) Sources: (China Daily)
CHINA OVERVIEW Population: 1.3 Billion (July 2004) Languages: Mandarin (Official), and many local dialects. Ethnic Groups: Han Chinese (92%). Religion: Officially atheist;Taoist, Buddhist, Muslim(1-2 %), Christian(3-4 %). Sources: (Asia Pulse; Dow Jones Newswire). Sources: (Asia Pulse; Dow Jones Newswire).
CHINA EXPORTS AND IMPORTS CHINA EXPORT: $ 529.3 billion( 2004). CHINA IMPORT: $ 505.8 billion( 2004). Sources: (Financial Times) Sources: (Financial Times)
CULTURAL DEFFERECES Decision Making: A. Western-Fast decision making; quickly gathered and processed information. B. Chinese-Deliberate longer; Want to be included. Sources: (China Daily) Sources: (China Daily)
CULTURAL DIFFERENCES YES MEANS NO A. Chinese-Dont like say No in a business setting nor admit dont understanding something. B. Western-Encouraged to express. Sources: (China Daily) Sources: (China Daily)
CONNECTION Relationships-with vendors, suppliers, central government. Both outside and inside relationships building.
PERSONAL STYLE Chinese-Dont challenge the instructor. Western-Encourages to questions, hand on training. Lose face
Hofstede Theory CountryPowerUncertaintyIndividualismMasculinity China78361550 U.S.40469162
Hofstede Theory (contd) Long term orientation vs short term orientation
Nikes international staffing Nike uses Regiocentric approach. The strategic decision made at the region level. Each region has its own VP. WWW.NIKE.COM
Nikes global Area Division U.S Headquarter ProductionMarketing Asia Pacific Region Americas Region EMEA Region Human Resource Finance
NIKE US-7 Subsidiaries. OTHER COUNTRIES-34 Subsidiaries. Employees-25,000(none of them are represented by unions). Distribution-21 centers around globe, 23,000 retail accounts. Sources: (Securities and exchange commission). Sources: (Securities and exchange commission).
NIKE Athletic Footwear-Largest seller in the world. China-36% manufactured in China. Revenue-120 foreign countries account for 53%.
Grew from single product, single market multiple brands, multiple markets Subsidiaries:Sources:http://www.nike.com/nikebiz/nikebiz.jhtml?page=3&item=facts#nike Nikes Subsidiaries
Net Revenue by Global Region (US $,millions) Total net rev. increased 15% Sources:http://www.nike.com/nikebiz/gc/r/fy04/docs/company_profile.pdf
Net Revenue in U.S. FY04 : $4.8billion (39% of Nike revenue) Increase 2.9%
Chinas attraction: Emerging economies Cheap labor costs Stable currency Bountiful raw materials Sources:http://www.fortune.com/fortune/subs/print/0,15935,375164,00. html
Nike approaches China Moved most production into China in mid 1980s More than workshop Set challenge: to change Chinas culture Sources:http://www.chinalaborwatch.org/en/web/article.php?article_id= 50214
Open the China market Phase I:Getting Swoosh recognized -Donated equipment and sponsor high school basketball game -Donated equipment and sponsor high school basketball game -Bring NBA player-Michael Jordan to visit -Bring NBA player-Michael Jordan to visit -Target middle class: seeks Western culture -Target middle class: seeks Western culture Phase II:Bring in Black culture-Hip Hop -Encourage rap-style trash talk -Encourage rap-style trash talk Phase III:Challenge Confucian-style -Fragrant possibilities of higher-quality shoes -Fragrant possibilities of higher-quality shoes Sources:http://www.chinalaborwatch.org/en/web/article.php?article_id=50214
Nikes success in China Sales through 1990s increase 60% a year Biggest seller of athletic shoes Example: Zhang Han -20 years old art student in Beijing -20 years old art student in Beijing -Owns over 60 pairs of Nikes shoes costing $6,000(RMB) -Owns over 60 pairs of Nikes shoes costing $6,000(RMB) Western goods mean status to Chinese consumer Nike did not enter China selling usefulness, but selling status Grew 66% in revenue in the past year Sources:http://www.chinalaborwatch.org/en/web/article.php?article_id=50214