The risks of doing business in China are well documented, and foreign firms often find themselves leaving the country with their tails between their legs. Having said that, with booming economic conditions, the temptation to work with the china market research reports is actually a strong one. Among the factors that will define the prosperity of your business relationship is risk management listed here are a few ideas to get you stated.
Conduct a total and Thorough Risk Analysis. It’s amazing how many companies forget to conduct some planning before they encounter trouble. Risk analysis is difficult in China but not impossible, you should depend on more than local media and representatives of the firm (and local government) to understand the marketplace position of the prospective partners. Your industry body as well as your chamber of commerce will be a good help in learning more, or you may engage an expert consultancy to do the digging to suit your needs.
Before you enter a romantic relationship figure out how much risk you are willing to bear and in case the deal exceeds that threshold – walk away. For those who have a risk management policy for other countries you need to apply exactly the same high standards to dealing in China and not lower them since you are salivating at the thought of higher profits.
Create a Problem Prevention Culture. Along with filling in lots of beautiful balance sheet predictions at the outset of the project, invest some time planning around issues that may arise throughout things.
Create a full group of contingency plans for every single eventuality including practical solutions to be utilized for workarounds. Ensure you have set milestones for each stage from the project, and an exit strategy for every place in that plan too even though you don’t want to use one.
Never forget that business in China is situated around personal relationships and patent application process may mislead as well as outright lie to you personally if you have another personal relationship (away from yours) that would be damaged from the truth.
Many Chinese businesses are also not unconstrained entities since they are within the West and native political issues could have a significant effect on their ability to do business with foreign organisations. This may be very difficult to gain visibility of and enquiries directly into what’s happening might be brushed off, particularly when there is any “loss of face” connected with keeping you inside the picture.
Ideally you ought to develop contacts and relationships in local government and central government who could possibly intercede on your behalf if things check out be progressing towards failure.
The complexity of the business culture in China means that you should spend more time and effort understanding working practices prior to deciding to transfer to partnership and it makes a risk management strategy a crucial part of managing relationships successfully.
Obviously you can find exceptions for the rule, and I claim that whenever you do locate a long term mentality supplier or partner, adhere to him, he could save you a lot of time, effort and funds.
You should hence, realise because you must also have a range of potential suppliers and “friends” to transform to in case the service you receive does drop. Many foreigners just believe that they hit the jac.kpot once they fjhflj one deal plus they just relax and expect a degree of service like they receive within their country without realising that the supplier will typically look first on the interpreting translation services he is going to make in this deal instead of through the length of your relationship.
The meaning of quality: I really like this word. It will be the most used word in china apart from “yes, no and sorry”. Everything is apparently of the a high quality in china, that the word itself has lost its meaning. As Timothy Ferris says within his book “the 4 hour workweek”, the better you make use of a word, the more it looses its meaning.