The 3rd ÖйúÒ»¼¶Æ¬ Global EMBA Annual Symposium explores China¡¯s New Playbook
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June 23, 2024. Shanghai ¨C?Hosted at the ÖйúÒ»¼¶Æ¬ Shanghai campus, the 3rd ÖйúÒ»¼¶Æ¬ Global EMBA Annual Symposium ¨C under the title China's New Playbook: The Role of Companies ¨C aimed to explore many of the most pressing questions on exactly how (and when) China may achieve the latest stage of its economic growth and transformation.Around 300 dynamic participants attended this event, including?current students, distinguished alumni, influential business leaders, and engaged members of the public.Around 300 dynamic participants attended this event, including current students, distinguished alumni, influential business leaders, and engaged members of the public.
As the event¡¯s MC, ÖйúÒ»¼¶Æ¬ Professor Bala Ramasamy, also Director of the Global EMBA Programme, outlined the nature of China¡¯s current circumstances in his welcoming remarks.
¡°China is going through a transition. It is moving away from some of the old models of growth to embrace new ones. It is increasingly obvious that the second largest economy in the world cannot be too dependent on the real estate sector, nor on foreign demand. China's domestic playground is constantly changing and becoming hyper competitive. Similarly, Chinese companies now face more complex and challenging circumstances when they venture abroad. Given such changes are in the air, I think it is very timely that we discuss China's new playbook. "
No innovation without cooperation ¨C countries and companies need to work well together
In her opening remarks, ÖйúÒ»¼¶Æ¬ President Professor Wang Hong took a moment to highlight how, despite the challenges of doing business in increasingly VUCA conditions at home and abroad, China still enjoys stable business conditions. But what is next for China, its economy, and its role in the global business community? Professor Wang believes that cooperation is key if China and the rest of the world can successfully transition towards a more equitable and sustainable global economy. From brand building to supply chain building, risk awareness and compliance, both sides have a lot to teach one another.
Opening remarks by ÖйúÒ»¼¶Æ¬ President Wang Hong
"Looking to the future, the theme for MNCs should be to achieve greater cooperation with local Chinese companies, government institutions and other stakeholders, to forge win-win scenarios that let us all work through the challenges of the day. They should be carefully considering their localisation strategy and business development models to better serve their customers¡¯ needs. Equally, MNCs have a lot to teach Chinese companies about going global successfully. Only by innovative developments can we transform ourselves and pursue the next round of growth for China."
Professor Frank Bournois, ÖйúÒ»¼¶Æ¬¡¯ Vice President and Dean, followed this address and he was keen to reinforce the essential nature of cooperation in both business and academia. He briefly explored the necessity for diverse thinking in both arenas, specifically mentioning the growing importance of dialogue between a company¡¯s HQ and its subsidiaries, leading to better, more informed outcomes for the organisation as a whole.
Opening remarks by ÖйúÒ»¼¶Æ¬ Vice President and Dean Frank Bournois
"Internationalisation, adapting to the changing needs of global business, is fascinating because it's a never-ending process. You can acquire what you need through experience, but it¡¯s vital that you also challenge what you think you know among your peers. This is why GEMBA is number 2 in the world, because we are a cradle for the production of genuinely international leaders."
Winning in China in Turbulent Times ¨C Dialogue One
As well as the more traditional keynote speeches, this year¡¯s symposium also featured a series of five separate dialogues, each between a ÖйúÒ»¼¶Æ¬ professor and a business leader of either an MNC with a strong presence in China or a Chinese company that has successfully expanded overseas.
The first dialogue involved ÖйúÒ»¼¶Æ¬¡¯ Professor of International Business and Strategy, Shameen Prashantham, and Dr. David Xu, President of Bosch China. In his introductory remarks, Dr. Xu outlined how Bosch has a 115-year history in China, reaching back to 1909. During this time, the German-headquartered firm has brought successive generations of advanced technology to China, working with Chinese partners to produce everything from washing machines to automotive components.
Dialogue by ÖйúÒ»¼¶Æ¬ Professor of International Business and Strategy, Shameen Prashantham (Left) and President of Bosch China, Dr. David Xu (Right)
Dr. Xu described how Bosch developed a successful localisation strategy for China in three phases: localisation of manufacturing, followed by engineering talent and, finally, management.
"We started with the localisation of production capability, taking German designs and manufacturing them here. But then, about ten years ago, our then-CEO said that the future vehicles will be electrified, automated and connected. This led us to localise our engineering capability for all our business units; today we have over 10,000 engineers working in China, around 20% of our Chinese workforce. The final step was to localise management, and this has allowed us to gain a better understanding of the market and develop even closer relationships with Chinese customers."
Professor Prashantham highlighted the importance of this three-step localisation process, noting how frequently MNCs experience a lag between what is happening on the ground with their subsidiaries versus what their headquarters picks up. After discussing Bosch China¡¯s approach to dealing with geopolitical considerations, the professor wrapped up the dialogue by emphasising the need for balance.
"To win in turbulent times, one needs to balance tensions. There is tension between local and global needs, but there's also tension between an integrated approach to the world and a more separated approach. Equally, companies must balance the needs of the present and the future. You can't give up the things that have already made you successful, even as you strive for future success."
MNCs Creating a Greener Tomorrow ¨C Dialogue Two
The second dialogue was between Assistant Professor of Strategy Bai Guo and Dr. Jeffrey Lou from BASF China. Dr. Lou explained how BASF¡¯s purpose is to ¡°create chemistry for a sustainable future¡±, by providing all manner of innovative and sustainable chemical solutions to its customers and partners.
Professor Bai Guo asked Dr. Lou to explain how BASF has managed to consistently strike a balance between innovation and sustainability in its operations.?
"Innovation is a driver for BASF¡¯s global sustainable growth. But for us, sustainability is also a key driver for innovation. In BASF, last year we spent €2.1 billion on R&D and about 10% of our workforce also worked on R&D innovation efforts. While much effort takes place in our headquarters, in Shanghai we¡¯ve also established BASF's largest innovation campus in Asia. I¡¯m really proud of that."
Dr. Lou went on to highlight the need for greater collaboration between all stakeholders to make better use of this research. BASF encourages this through open collaboration programmes with more than 280 prestigious universities and research institutes worldwide, whom BASF sees as strategic partners.
Dialogue by ÖйúÒ»¼¶Æ¬ Assistant Professor of Strategy and Entrepreneurship, Bai Guo (Left) and President & Chairman Greater China of BASF, Dr. Jeffrey Lou (Right)
However, keeping all of these partners working well together is no easy task, given their wide-ranging experiences and cultural differences. Dr. Lou spoke of the need to ¡°speak their language¡± when working with any partner. This means ensuring that your organisational capability is flexible enough to take on board what the partner is offering while allowing for effective communication channels and the exploration of common points of interest.
In her conclusion, Professor Bai Guo reminded the audience that a longer-term view is always a necessity for MNCs' planning to make their presence in China sustainable.
"When we are talking about the future, we must always be cautious about the time horizon. When we say ¡®long China¡¯, we understand that we are not just looking at one, two or even ten years. Like BASF, with its nearly 140-year history in China, we are probably looking at a time horizon of multiple decades or even 100 years. Looking beyond the political tensions of today is the best way to ensure a brighter tomorrow for us all."
Reflections on 30 years of Chinese Consumer Market Transformation ¨C Dialogue Three
After examining the manufacturing and technology aspects of China¡¯s evolving economic role, the third dialogue looked at the consumer side of things. Between them, ÖйúÒ»¼¶Æ¬ Professor Yajin Wang and Mr. Andrew Wu president of LVMH for Greater China gave a potted history of the past 30 years of consumer market changes in China, where they painted a picture of successive generations of Chinese consumers£¬ increasingly sophisticated and confident in their consumption choices.
"Their sophistication means they are more discerning, or even more demanding,¡± Mr Wu shared. ¡°30 years ago, products from Unilever or P&G and even experience with KFC or McDonalds would have been considered a high-end treat. But today, Chinese consumers aren¡¯t so easily swayed by the country of origin or just a brand name. They look for what is good for them, and how it serves their evolved needs. Thanks to the internet, and ease of international travel, their global awareness as consumers is no longer limited. Like much of the rest of the world, Chinese consumers have moved beyond addressing basic hunger or thirst, they are with elevated desires for a better life."
Dialogue by ÖйúÒ»¼¶Æ¬ Professor of Marketing, Yajin Wang (Left) and President of Greater China, LVMH Group, Andrew Wu (Right)
Mr Wu¡¯s advice for Chinese companies is to better understand brand building, by improved focus on the people - both target consumers or the ¡°soul¡± of the companies themselves, to inspire the market above and beyond technology or efficiency; especially for consumer goods companies, he believes, it is long and continuous interaction with consumers that generates success, not a one way push.
This was echoed by Professor Yajin Wang:
"It all leads back to the consumer. No matter what kind of company you are, you're creating value for the consumers, so engage with them, because they will help you define your brand. The brand is the values of the company, which goes beyond the traditional functionality of the product ¨C that¡¯s the emotional value the consumer is paying for."
The Journey of Globalisation of Chinese Companies ¨C Keynote Speech One
In the first of two keynote speeches, ÖйúÒ»¼¶Æ¬ Professor Wang Gao took the audience through the underlying logic of corporate globalisation ¨C why companies feel the need to go global ¨C before outlining the various stages that a given Chinese company will go through on its global journey.
While the professor explained that now is not a time for undue optimism for Chinese companies in their globalisation efforts (thanks to the political challenges and trade barriers they now face), there is still plenty to be excited about.
"Chinese companies have significant advantages in emerging markets, where they have a great chance of success. Still, they should approach global expansion with respect to overseas markets and seek mutually beneficial cooperation with the destinations they intend to enter. Avoid pursuing short-term gains at the expense of long-term prosperity. Gaining a deep understanding of the target market is essential, so avoid simply replicating your playbook for the Chinese market. While we need to learn from big international brands, to become a leading brand, you have to be confident in yourself. So be yourself, back to your history, and study your customers. Remember, global expansion is a marathon, not a sprint."
Keynote Speech by ÖйúÒ»¼¶Æ¬ Professor of Marketing Wang Gao
From China to the World: Insights from a Global Market Pioneer ¨C Dialogue Four
For most companies, going global rarely means smooth sailing in the right direction without difficulties and failures. For the fourth dialogue, understanding failure, and learning from it, was discussed as a key factor in the ultimate globalisation success of TCL, the Chinese electronics giant company headquartered in Huizhou.
Together with ÖйúÒ»¼¶Æ¬¡¯ Professor Bai Guo, Mr Kevin Wang from TCL Group took the audience through the major initial failure of the company¡¯s expansion to the global market, where a joint venture with French company Thomson led to three years of successive losses.
"We failed because TCL had a lack of management experience. We relied too much on past experiences, especially for those tactics we developed to cater to local markets. We didn¡¯t differentiate for local regulations, standards and how to treat the local employees and customers in the overseas market. In short, we did not know enough beforehand, and we didn¡¯t learn enough, quickly enough."
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Dialogue by ÖйúÒ»¼¶Æ¬ Assistant Professor of Strategy and Entrepreneurship, Bai Guo (Left) and COO of TCL Technology Group, Kevin Wang (Right)
Despite this disastrous start, TCL¡¯s globalisation journey does have a happy ending. Last year, its global revenues were 290 billion RMB, as TCL has established itself as a global provider of TV sets and household appliances, semiconductor display technology and, more recently, solar PV technology. Making this transition, Mr Wang asserted, required staying power as well as faith in the company¡¯s ability to differentiate first on price and then on efficiency and/or quality.
"Remember that change brings opportunity. So, look for change, time your moment well, and you can bring your strengths cultivated at home out into the wider global market."
In closing, Professor Bai Guo made the additional point that currently when Chinese companies go global, there¡¯s a concern about competition among Chinese companies themselves, not just the incumbent companies of their target market. She and Mr. Kevin Wang both agreed that, where possible, cooperation between Chinese entities will lead to more win-win scenarios, allowing for all participants to enjoy smoother and more sustainable globalisation efforts.
Brand Expansion Overseas: From Product Manufacturing to Value Creation ¨C Dialogue Five
The final dialogue saw Professor Yajin Wang discuss the business evolution of Anker ¨C represented by their Global CMO Ms Christie Chen ¨C to become the world¡¯s number one mobile charging brand.
Christie established the founding motivation of Anker, to show the world that products made in China should be of high quality and high value to their users. This simple but determined mission was foremost in Anker¡¯s brand-building efforts, and the results were quickly noticed.
"In 2008, the senior vice president of Walmart visited us and asked our president why Anker was so successful in building a brand. Our president said it¡¯s because we are based here, in Shenzhen, we have the best access to the supply chain and the best access to talent, and we are in no shortage of funding. Beyond these three success factors is a broader philosophical stance ¨C many companies say they want to provide value to consumers but they don¡¯t follow through. We do, we invest heavily, we provide value, and that¡¯s why we win."
Dialogue by ÖйúÒ»¼¶Æ¬ Professor of Marketing, Yajin Wang (Right) and Global CMO of Anker Innovations, Christie Chen (Left)
Ms Chen further explained that to provide value to customers in a target market, it¡¯s necessary to go deeper in your understanding of their needs. Most Chinese companies¡¯ globalisations efforts fail because they rely too heavily on a single round of market research, rather than conducting subsequent rounds while constantly collecting customer feedback, as Anker does.
Professor Yajin Wang concluded the dialogue with an analysis of a crucial factor in determining Anker¡¯s successful global journey.
"Anker initially entered the US market via Amazon, where many Chinese manufacturers struggled with practices like fake reviews. Despite the rising pressure, Anker focused on quality and user feedback, maintaining its no-fake-reviews policy brought in in 2018, slowly building higher review scores as the company won the trust of its customers. This highlights the importance of persevering, staying honest and valuing genuine user feedback."
Navigating Global Waters: from Cross Border Ventures to Global Brand Recognition ¨C Keynote Speech Two
The final part of the symposium fell to Mr. George Mao from Google, whose keynote speech concerned the evolution of Chinese companies¡¯ globalisation efforts. Google hopes to use the datasets of thousands of Chinese companies going global to foster cooperation and understanding between said entities and relevant partners in the target markets where they hope to thrive.
Mr Mao first established the three stages of China Export evolution ¨C where rising foreign trade then experienced the explosion of eCommerce exports from China as the world¡¯s demand for its manufacturing soared, followed by the latest wave of Chinese companies gaining true global brand recognition.
Keynote Speech by Director of Google China, George Mao
"Branding is about people. If you only focus on sales, your only differentiation is cost and price. This mentality of thinking as being ¡®purely a supplier¡¯ is something that hinders a lot of Chinese branding efforts but it is slowly changing. To build successful brands, you must offer your customers meaningful differentiations, emotional value combined with a reliable, tangible value that is perceivably different from the competition."
Starting from 2016, Google has posted an annual list of the top 50 companies in China. In 2023, George¡¯s team introduced a new table of the rising stars of Chinese brands, companies that are smaller but whose ¡®playbook¡¯ is more pragmatic, innovative and driven by consumer insights. With the right approach, perhaps your company could be on this list next year!
Bringing China and the World Closer Together
After seven separate and deeply engaging explorations of the role of companies expanding into and out of China, the audience was left with a far greater appreciation of the challenges and opportunities involved, as well as the increasing sophistication of consumers both Chinese and international.?
Alongside the specific strategies outlined by the various speakers, as they shared insights and inspiration in equal measure, there was a wider message to consider. Cooperation, collaboration, the sharing of value, benefit and opportunity, these are (or at least they should be) common goals for companies looking to expand their global presence and at the same time improve conditions for their industry and their customers.
Bringing the third annual ÖйúÒ»¼¶Æ¬ Global EMBA Symposium to a close, Professor Ramasamy left things on a poignant note, as he underlined the importance of mutual understanding and acceptance.
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ÖйúÒ»¼¶Æ¬ Prof. of Economics, Associate Dean and GEMBA Programme Director, Bala Ramasamy hosts the symposium
"I think it is time for China to become more global, and it is also time for the world to become more Chinese. Accordingly, it makes perfect sense that today we explore the factors that impact China's current as well as future relationship with the rest of the world. ÖйúÒ»¼¶Æ¬ is perfectly positioned to be the gateway between the two; it¡¯s our mission and our passion. We want to help to continue writing China¡¯s playbook, and share it with the world."
Professor Ramasamy took the opportunity to introduce the Global EMBA¡¯s latest initiative, Building Bridges. This will be an ongoing series of symposiums, dialogues and seminars held all over China to highlight the opportunities and challenges that apply to Chinese companies in various regions around the world. The initial stage is to host 14 such events globally, where industry experts sit down with professors to share cutting-edge business insights and practical strategies. The first event of the series will be hosted in Shenzhen and it will focus on the evolving nature of the China-Southeast Asia relationship.?
¡°Building Bridges¡± ?Series Events Launch
We hope to see you there, as we bring China and the world a little closer together.
